Cattle Call is an original production of the Nebraska Rural Radio Association and presented by Blue Chip Herefords – Oxford, Nebraska.
After a volatile week that saw cash markets “standing in quicksand,” cattle producers are showing renewed confidence, shaking off early-week jitters caused by Middle East instability and looming labor concerns at the JBS plant in Greeley, Colorado.
Last week’s sudden $4 slide in the cash market was described not as a “black swan,” but perhaps a “black duck” – a minor obstacle rather than a market-ending event. Despite a sharp drop in futures and stock market uncertainty following tensions with Iran, Brad Kooima of KKV Trading noted that the cattle market has proven resilient, with buyers consistently stepping in to “buy the break.”
However, Kooima warned that the industry must keep a “sharp eye” on leverage. With average cattle weights trending higher, there are growing concerns that producers may be overfeeding, potentially eroding the leverage they currently hold over packers.
“Bull markets die hard… Success kind of breeds that type of trading activity,” Kooima said, noting that pragmatic traders continue to buy dips.
He also cautioned producers to monitor leverage carefully amid tight supplies. With average cattle weights trending higher, there are growing concerns that producers may be overfeeding, potentially eroding the leverage they currently hold over packers.
“I still think we got to keep a sharp eye on this whole leverage piece of whether we’re overfeeding some of these cattle or not.”
Looking ahead, Kooima expects the cash market to remain steady, likely landing between $238 and $240, though much depends on whether a strike is averted at the Greeley facility, he said.