Mackey: Packers Seeking Inventory Pushes Market Higher
By end of day Friday the industry traded 129,902 head. Basically, par numbers with the previous week The trade was done mostly at $2 higher. The South would start trade at $184 per cwt. Uncomfortable with previous inventory, at least one packer reportedly pushed to $185 cwt and eventually the rest followed.
Meanwhile, in the North, trade was just as active. Regionals encouraged to get their shot at front-end type cattle established sales at $187 per cwt. Majors would follow at $186 per cwt and eventually the $187 per cwt. Dressed sales occurred mostly at $294 per cwt., with a few bringing $295.
Harvest was reported at 638,000 head, 21,000 more than the previous week. Most participants look for the trend of bigger kills to continue as the industry transitions in the holiday demand season. The cutout was $5 higher, Friday to Friday.
Looking ahead, there will be lots of talk and reaction to the Cattle on Feed report out Friday. Placements were expected to be up, though the shock was in the actual number coming in much higher than the estimates. Initial comments, these were likely incentivized by late season drought, and no one can deny the sharply higher prices for feeder cattle encouraging more to come to town. Packers will try to use this negative momentum to work the market back. Feeders will grasp onto the fundamentals and hold their ground.
