Last week began with talks of recession, war and unemployment. What would follow was mass confusion in the market place. Cattle feeders fearful the run was over added cattle with intent to capture remaining value, and packers welcomed the weakness.
The market began in earnest when basis traders found $193 per cwt offers appealing. Packers would spread the trade North and South establishing the lower rhetoric. Eventually many show lists holders were convinced the market had changed course and would begin to part with cattle. Bids of $193 cwt live and mainly $305 per cwt dressed would trade cattle in the North, with regional offers at $194 cwt. At least one packer was reported to have pushed to $306 cwt dressed late Friday to secure needs. The South, seemed to ignore most of the news, pivoting off higher boxes and a stronger board towards the tail end of the week, managed to hold their market at $186 cwt live. Only $1-2 lower vs the previous week.
Friday’s volume shows 125,000 head cash and grids exchanging hands for the week. Monday’s report will tell more of the story. Look for the 15-30 day number to increase. Many will look for the inventory shift to be just what the industry needs for packers to open the harvest pace as they gear up for Labor Day demand. Last week’s harvest was 591,000 head, 2,000 off the previous week’s pace.
Looking ahead, many will put the previous week behind them. The improved futures and good clean up will have cattle feeders optimistic of grinding the market back to previous week levels. Packers will want to work off their previous week’s victory.
