Beef packers could be moving into a period with smaller inventories, which may prompt them to push prices higher. CME futures prices will again have an impact on the cash trade.
The fed cattle price recovery that has been painstakingly built since early September has eroded in an extraordinary decline over the past two weeks.
Both cattle feeding and hog finishing operations found modest profits for the fifth consecutive week calculated on a cash basis, according to the Sterling Profit Tracker.
A large winter storm is advancing across the central U.S. bringing cold temperatures and some much-needed moisture. Feedlots continued to build inventory during September leading to a record inventory for Oct. 1.
Cattle feeders found softer prices and weaker packer demand as last week progressed, driven in part by declines in CME futures prices.
Both CME cattle futures and cash prices were lower for the second consecutive week. USDA's cattle on feed report found a record October 1 inventory as September placements were called 6% higher.
Cattle and hog finishing margins are both positive for the fourth consecutive week despite the fact cash prices for cattle and hogs were slightly lower last week.
Despite declines in both cash and futures prices, cattle feeders continue to believe cattle markets show signs of optimism.
Cash cattle and futures traded lower for cattle most of the week, while grain markets experienced a harvest rally.