Lack of Participation Pulls Cash Down

Feeders were hard pressed to get a bid last week, with some packers making it very clear they would not be in the market at all. ( Consolidated Beef Producers )

What a difference one week makes in the cash trade. Two weeks ago, we had four packers participating in the market willing to run the cash up $5 to fill their needs. Last week feeders were hard pressed to even get a bid, with some packers making it very clear to their competition that they would not be in the market at all. The trade in the south was mainly at $112-$113. This trade only consisted of one packer at the $113 and only one at $112. The north saw several cattle trade at $110 up to $112 and $175-$178 dressed.

What do the market swings mean for our trade in the coming weeks? A large carry over this week due to lack of trade last week could be a one factor in considering the market. Many of the cattle on the show list continue to be green to current, which should allow feeders more flexibility in decisions because they are not being forced to move cattle due to a backlog. However, another factor to consider is that the packers seem to be comfortable with keeping a very low inventory at this time. The catalyst either direction could be a positive or negative beef demand after the Fourth of July holiday. If the beef market remains positive as the summer goes along, the packer may be more interested in taking on larger inventory as cattle supplies dwindle throughout the summer.

Even with a lack of trade last week, many feeders feel optimistic on trade this week due to the action that took part on the board on Friday. If this upward movement of the board continues this week, we could possibly see steady to higher cash prices.