Positive Start To New Year For Cattle Feeders

Cash cattle traded higher ( CBP )

Packers were aggressive in obtaining inventory to start the new year.  As a result of their need for inventory, the cash market in both the north and south benefited by gaining $2+ over the previous week.  Cash trade in the south was $124. 

The north kept pace by moving live cattle up to $124.50 and dressed cattle at $200.  National Beef continued to be absent from the live trade with other big three willing to participate in the market. 

Potentially slowing demand and lower packer margins will determine how the market will progress over the next few months.  By the close of the CME on Friday, the board was only $.70 cents from an even basis.  If the basis continues to narrow, the trading behavior of the hedgers will change.  Feeders could see a rise in the cash market until cattle availability, harvest reductions, or negative basis cause the a break in the current cash surge.

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