Can Cattle Feeders Right The Ship?

The downward movement in the market feels like it should be short lived, but is dependent on how willing producers are to fight for a price. ( Consolidated Beef Producers )

Two things were solidified in last week’s fed cattle trade.  The first is that fear now controls the market more than any fundamentals.  The second is that with the lack of negotiated trade one person can set the market for multiple regions. 

The south started the trade last Tuesday evening when they traded cattle $2 lower at $126.  Later that evening and on into Wednesday, more people began to give in and the snowball began in the south.  Trade ranged from $126 down to $124.  The north did the best they could, but were still left with taking $126 to $126.5 on a few.  The dressed cattle were mostly at $205-$206.

The downward movement in the market feels like it should be short lived, but is dependent on how willing producers are to fight for a price.  Packers have indicated that they are several weeks out for delivery of cattle when bidding, even though there have been repeated instances of packers taking cattle earlier than what they had requested.  This would lead one to believe that packer inventories are not as great as what has been advertised. 

For the short-term it feels that the packer has the leverage at the moment.  Spring demand should be nearing by each passing week.  When this demand upturn reappears, this may give producers that leverage that they badly need. 

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