Mackey: Happy Hour Trading Ignites Cattle Rally
It was a week for new highs for both futures and cash. Cattle feeders have been waiting a long time for a week to unfold like this. Friday afternoon’s national volume printed with 18,979 head of negotiated trade. An extremely limited week, but most will wait for Monday’s report for the good news.
Packers did most of their business after hours and into the weekend. The East saw trade at primarily $250 per cwt. dressed, or $2 higher. The rest of the country refused the $158 bids and kept their $160 asks intact. By late Friday at least one major, needing inventory, would raise their bids to $159. A few cattle would trade, considering a $3 move higher compared to a week ago. By Saturday morning the South would see similar action and in some cases with 2 bidders.
Harvest came in at 647,000 head, 12,000 head smaller than last week. Carcass weights out Thursday had steers down 10 pounds year over year and heifers down 17 pounds. The Cattle Inventory report only solidified the expected. Packers will be challenged in gathering inventory with fewer numbers available.
Looking ahead, futures should welcome the stronger trade and that should continue to fuel cattle feeders’ momentum. We will watch the volume reports to see if the packers were able to improve their position. Most will expect for them to be back in the market at the same extent. Historically, this is a time for narrowing packer margins and I don’t see this any different. Cattle feeders will continue to get into the packers pocket as we move ahead.
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.
