Mackey: Resolution: “Do Not Sell On The First Bid”
Multiyear highs in Cattle futures Thursday sparked initial live cattle trade. Although extremely limited KS/TX saw steady to $1 higher offers at $157 live and the North saw Regional offers at $255 FOB and $159 Live. By Friday, cattle feeders would assess volumes and ultimately participate in the higher market. KS and TX would clean up at $157.
Meanwhile the North would move cattle to the majors at $252 dressed and $158 live. As of Friday afternoon National Negotiated Volume sits at 34,705 and 16,693 grids. That’s 14,640 head more than the week previous cash and grid combined.
The disparity seen between dressed bids found in eastern Neb. and Colo is uncalled for. Both areas having seen the similar weather conditions, days apart provides little explanation as to why feeders would be comfortable trading at a $4 cwt discount. In this time of growing leverage, cattle feeders should adopt a New Year’s Resolution, “I will not sell on the first bid,” as evidenced by the Eastern feeder’s ability to resist initial offers of $248 and settling for $252.
The Choice Box Friday to Friday printed $10 cwt higher. Partially due to the production limitations experienced in the previous weeks. Harvest totaled 547,000 head, 15,000 head smaller than the week previous, but 23,000 head larger than a year ago. As an industry, we have harvested 499,000 head more than a year ago. This is a number that will be watched closely in the New Year. It will be interesting to see how the Packers will manipulate the harvest to protect their margins and manage supply.
