AgriTalk ATB: Market Structure Keeping Cattle Marketings Current

Tuesday on AgriTalk After the Bell, Scott Varilek from Kooima & Kaemingk Commodities in Sioux Center, Iowa, told ATB host Chip Flory that the structure of the cattle market is providing plenty of incentive to keep marketings current. In fact, Varilek says, “The premium of the cash market to spot-month futures is giving feedyards some incentive to reach a little deeper into some pens and pull some marketings forward.” He says showlist numbers are not burdensome, also suggesting marketings are current.

As for the recent year-over-year increase in cattle weights, Varilek says those weight comparisons to year-ago are a comparison to an “ultra-current” market. Two years ago, cattle weights were exceptionally heavy with the market encouraging marketings in the 1,500-pound weight class. Last year, the same feedyards that sold those heavy cattle in 2016 were marketing cattle at 1,350 out of the fear of a “wall of cattle” that was about to hit the market. As a result cattle weights are up from year-ago, but that does not mean they’re overweight, says Varilek.