Packers had to pay up to acquire the numbers of cattle they wanted last week helping to clean up show lists and signaling the summer lows may be in the rearview mirror.
There was never enough need by any packer to push the market but could be a sign they may be getting shorter on committed cattle. Regional packers seem to have cooled down in the North.
This week could be very unpredictable in the cattle trade. The North-to-South spread may continue to narrow as calves are still not ready and packers seem to be chasing more mature cattle in the South.
Cattle will continue to come in lighter than expected and lose grade due to high ration costs. This could help keep forcing the packer to harvest more cattle than expected to keep their orders filled.
Cattle feeders in the South sold cattle throughout the week at steady money while feeders in the North pushed their market a little higher by week's end.
Prices on the South Plains remain locked in a price rut as packers appear to have plenty of inventory. Corn Belt prices remain premium to other regions.
Cattle feeders began last week optimistic that the market trend would be higher, but those ideas were quickly squashed as futures prices began trending lower.
The month of March will continue to bring more cooler cleanings on the packer’s part. This will continue to keep the number of cattle needed by the packer to minimum.
Cash fed cattle prices came under pressure last week as packer needs were lighter than in recent weeks. Wholesale beef prices have declined resulting in lower margins for processors.
The Russia-Ukraine conflict produced another set-back for fed cattle last week. The industry is hoping this week will bring less volatility in the markets.
Cattle feeders saw active participation from all packers last week which helped push prices higher for a fourth consecutive week. Prices in the North remain at a premium.
Cattle feeders in the South saw three packers aggressively buying large numbers of cattle last week. Packers in the North continued to push hard to buy cattle in the eastern side of the region.
The cash market finally saw some life last week. Packers seemed to be in more need for cattle and finally were in a position to have to raise bids to get cattle bought.
Absenteeism at major packing plants due to coronavirus has again helped create a backlog of market-ready fed cattle. Packers used that fact to push fed cattle prices lower last week.
Cattle feeders anticipated cash cattle prices would be softer since packers were working with holiday-shortened hours last week. Packers will need cattle this week to fill full-week schedules.
Cattle feeders found softer demand from packers last week, resulting in a $2 per cwt. decline in cash prices. Holiday slaughter schedules the next couple of weeks will likely prevent any price gains until the new year.
The week before a holiday is not usually ideal for pushing the market higher, but last week proved to be just the right combination to support a rally.
The cash fed cattle market found its way higher again last week, with four or more packers in the market all fighting for cattle every week for the first time in two years.
Last week cattle feeders found themselves in an environment they had not seen since August of 2019. Four packers were in the market competing for the cattle that were available on the list.
Packers were willing to take a little lower grading animal last week, but cattle feeders may have a limited window to get those undesirable cattle market before larger supplies appear on showlists.
Cash cattle trade looked to be a repeat of the last several weeks with packers grudgingly upping bids. It was not a huge increase, but it is a sign that the number of front-end cattle available is becoming shorter.
The number of high end market ready cattle should be limited for the next several weeks. If the cattle feeder has any opportunity to take any of the margin from the packer the time may be upon us.
Holidays are out of our way, but packers have begun their fall cooler cleanings. This rotation will keep at least one plant running short for several weeks and will continue to keep fed cattle harvest to a minimum.
The fed cattle market in the South continued to inch higher last week. Now that we have the holiday behind us packers should have a greater need for cattle than what we have seen for the last several weeks.
Deferred cattle futures prices suggest cash cattle should rally going forward, and many cattle feeders are in a position to dig in and fight for higher prices.
Cattle prices pushed higher with trade volumes also increasing. The market has been aided by the decline in committed cattle, helping independent feeders clean up their showlists.