Cattle in the south traded anywhere from $113 to $118 cwt. The north traded mostly $112 to $116 cwt, with a few cattle trading slightly above the range. The higher cash price was paid early in the week before packers started backing up. The packer competition was limited among all parties with ample inventory to satisfy their kill needs.
As the market continues to decline into the teens and breakevens dipping into the red, the feeder will have some tough marketing decisions to make over the next few weeks. The feeder could stay the course by holding cattle and adding pounds, or betting on the future by moving out cattle and going with cheaper replacements.
If this week mirrors last week, basis could play a role in the marketing of cattle this week. We saw the wide basis erode last week. It will be interesting to see how the convergence continues this week. The market may force some hedger’s pass on bids because of a narrow of basis.
In the previous weeks, we have witnessed cattle pulled forward to take advantage of the higher cash market, creating a very current showlist. The advantage for feeders to sell cattle out front has eroded with the cash market decline. Therefore, in the coming weeks, we could see showlist offering’s reduced to only market ready cattle.