September Feeder Cattle futures are trading at $1.04. At local auctions many 400-600 weight calves are bringing record prices. Demand is strong and every indication is that prices will stay up. BUT, things change. Take a look at the current soybean market. At the end of March, September soybean futures were trading at $9.04 a bushel. Everything looked positive for beans and all indicators supported strength in soybeans. Today they are trading at $7.38 a bushel, a drop in price of 20 percent.
So, now back to the Feeder Cattle market. If you have any fall calves for sale, why not use some form of risk management now? Feeder prices look strong and may continue to be high, but some form of hedge, option, or advanced sale appears to be good management. Remember beans? We do not want the feeder market to fall 20 percent without protection.
By Bryce Myrick
Director, TFB Agricultural Marketing Education
To set up workshops or for help with your hedging needs, call 254-751-2242 or 915-698-0355 or e-mail: firstname.lastname@example.org.
SEPTEMBER - FEEDER CATTLE
SEPTEMBER - SOYBEANS
China has cut back on bean imports
Technical Analysis: Trend - Down; Resistance - 8.44; Support - 7.07
Fundamentals: Tight fight cattle supply - demand strong
Technical Analysis: Trend - Up; Resistance-none / Support - 98.50
JULY - KC WHEAT
DECEMBER - COTTON
Fundamentals: Crop deteriorating on plains
Technical Analysis: Trend - Down; Resistance - 4.28; Support - 3.70
Fundamentals: Trade issues weighing on markers
Technical Analysis: Trend - Down; Resistance - 64.15; Support - 58.70