October feeder futures are off another limit move today after having tried 3 times in the last month to push towards the $2.25/lb range and failing to do so. October feeder futures would be the closest market to the cow calf producer’s calf market from a hedge perspective. A market that can’t go up will often fall off in exasperation when speculators leave the market, some of them exited today. It may be that we have seen all we are going to see for highs this year, time will tell.
This is the reason why Cows in Control is encouraging ranchers to look at marketing as a year round effort. Whether buying insurance, hedging with futures/options, or forward selling, these are exceptional prices right now for our feeder cattle, and the market is starting to slip, a great time to be looking at these options.
Marketing can be a speculative gamble waiting to see what calf prices will be by the time you go to sell them. Or, you can premarket or hedge now at historic high prices and rest easy until the date of delivery. One of these options makes it alot easier to sleep at night, the other is roulette.