The market will do what it wants to do, when it wants to do it, just because it can. That is the response I give when people ask me what I think the market will do.

The market is affected by people. For some, the fear of a loss is greater than the anticipation of a gain. Greed drives others. There was a mixture of emotions and it created a strange week.

The buyers at the sale where I was on Monday were all talking about the Dow falling out of bed, or how another auction already underway in another state was $12 lower. But when the bidding started at that auction, you’d never guess any of that was going on.

Then on Tuesday I saw something I’ve never seen before: An auction was cancelled due to uncertainty in the market. The sales I was at later in the week were what I’d call sluggish, meaning one group of cattle sold steady, and then the next group of similar weight, sex and type would sell $10 lower, with that pattern repeating itself all afternoon. And fat cattle traded lower, then ratcheted down and traded even lower.

There is all kinds of “information” out there. The thing is, none of that information could’ve predicted what was going to happen this week. I do not pay much attention to the Dow, and it has been years since I’ve looked at the cattle futures board. And there was no way anyone could’ve predicted this corona-virus issue. All the useful information can be summed up in a bid, creating price relationships between groups of cattle. If we properly use this information and do the math we can create a profit.

With the markets being sluggish its difficult once again to really pinpoint a steady value of gain between weight classes. The only ones that stand out are three-weights being undervalued and five- and eight-weights having a higher value of gain than cost of gain.

With this volatility in the markets there were some opportunities to make leap-frog buys, where you can buy a heavier animal for less dollars per head than a lighter one. To put it another way the market paid you to take weight home.

This week unweaned cattle were $0-11 back, and feeder bulls were $10-20 back. Southern cattle weighing under 600 pounds were right there with the Plains markets, when adjusted for freight, and cattle 700 pounds and bigger were undervalued.

I didn’t see many bred cows this week, but the female markets seemed much like feeders. Some sales had some breds sell strong while others sold them just over the scale, regardless of age.

As I bring this in for a landing, I suppose I better address my comment about not looking at the board. When we get good at sell-buy marketing we can be self hedged in a cash market. Hedge means to lay off risk. I will not argue that there may be times to do this. But to me it’s another expense to the business, since we have to pay fees. I also know many people who have had to pay margin calls that were bigger than the profit made on the cattle. To me that seems a lot like adding risk, so I choose not to do it. When people ask what the board is doing what they really are asking is if their wealth is increasing or decreasing.

When we stay disciplined and execute good sell-buys we know that it is always increasing, and we don’t have to ask anybody or hope to see green numbers on our phone. I have done sell-buy for going on 16 years now and the cash market has not let me down. It requires discipline to know when to stop bidding and to look at market reports daily, and to always be a willing seller, even in turbulent markets like this. I know myself and I know I can handle it. That’s why it works. I am not recommending that everyone stop hedging, I am only clearing the air about why I pay no attention to the board.