Mackey: Bullish Factors Fueled the Market to Benefit Cattle Feeders
Carrying show lists the previous week paid off to the tune of $3 cwt. A combination of bullish factors fueled the market and cattle feeders were awarded. Cattle feeders used the fresh week for fresh asking prices of $165 and $265.
The East was the first to see early week trade at $164 by a regional. That set the tone for the market place, and no one was willing to come down. By Friday, two majors were in the market at $164 bidding from North to South and the East bids would raise from $260 to $262. That would move the majority of the cattle.
The national volume came in Friday at 70,238 head, Cash and Grid combined. That’s 32,000 fewer than the week previous, but more will be reported this week. The Nebraska volume comes in at 16,127 head, as of 1:30p.m. on Friday, so that number is likely to increase.
Packers have been trying to protect their margins by keeping the weekly kill pulled back. This week’s total of 618,000 head was down 9,000 compared to the previous week and down 33,000 head compared to the same week a year ago. Their efforts have pushed the cutout value $23 higher, but it’s the rising cutout that continues to fuel the cattle feeder. At some point demand will have a setback, but that is yet to be seen.
The cattle on feed report out Friday continues to confirm the declining cattle inventory.
Looking ahead, cattle feeders should position themselves for the increased leverage.
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.
