Mackey: Futures Heat Warms Cattle Feeders Resolve
Late week futures strength was just the push cattle feeders needed to hold the market steady, the week ending Feb. 16. Sales were sparked in the South by a red futures market and limited bids. When it was all said and done, 27,000 head of cash and grids combined would change hands.
After the early business in the South concluded at $179-180 cwt. live, Northern feeders were holding show lists looking for answers. As the futures gained strength so did the cattle feeders’ resolve. Willingness to pass on bids of $180 live and $285 dressed drew out more money and eventually steady money at $181 and $287-289 dressed would trade the cattle.
By the numbers, packers purchased a total of 125,000 head last week, which was 10,000 more than the week previous. As whole, however, the trade is still small. This is in part due to the harvest reduction we have seen in recent weeks. Similar to last year at this time, packers have the harvest pace idled back to keep this market in check. As the forecast and demand improves, all eyes will be on the harvest pace.
Looking ahead, cattle feeders, working with higher priced cattle, will continue to price higher and squeeze what they can out of the showlists. Packers will look to keep their bids in check and match their needs with the harvest pace. Most will wait until late week for market direction.
A native of Torrington, WY, Brodie Mackey joined Consolidated Beef Producers in the spring of 2013 after earning his B.S. from the University of Nebraska-Lincoln. Brodie’s focus at CBP includes customer development, cattle marketing and evaluation in Nebraska, Northeast Colorado, South Dakota and Wyoming. For more about Consolidated Beef Producers visit here.
