Hulett: Cash Cresting?
Most cattle feeders in the southern region waited until late Friday morning before trading cattle. Feeders were optimistic that a chance, if slim, was available to push the market higher than $110. However, once the board broke, feeders saw their optimism vanish quickly with trade staying at $110.
Producers in the North saw their market trend with that of the South. The North cash trade topped out at $110 and dressed trade was in the low $170’s. Although the price had a significant jump, many of the cattle were sold with additional time, giving the packer a healthy inventory. The additional inventory could give the packer leverage to work the cash trade market lower.
Did outside factors or did cash trade cresting at $110 create the sell off Friday? This week’s cash bids from the packer might be the best answer to that question. As the year winds down, it appears that the packer will be back in the driver’s seat with producer having very little leverage opportunity.
Brad Hulett is Director, Customer Development & Regional Manager, Kansas at Consolidated Beef Producers , Inc.
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