Mackey: Packers Will Use Basis to Build Inventory
It’s not as much fun to comment on the cattle trade when we aren’t discussing record high prices. However, this is a breather we have all been expecting.
Given the prices at which most cattlemen marked sales, they were still better than expectations for the time period when these cattle went on feed.
Last week’s national report had 111,665 head of Cash and Grid cattle trading, that would be 22,971 head behind last week. Influenced by slower futures, the South moved cattle primarily at $175 per cwt, with a few outside sales lower and for extended delivery.
The North saw a larger range with sales from $287-290 per cwt dressed and on the live side from $179-183 per cwt, mostly $180 live. Again, the lower end of the range was for extended delivery—Monday’s report will have the details.
I spoke to this a couple weeks ago, be cognizant as packers will look to use the basis to build his inventory and build his leverage.
Lots of commentary on the Cattle on Feed Report out Friday. We still have the fewest number of cattle on feed since 2017. Marketings for the last half of this year are still projected at or below that same time period.
Looking ahead, cattle feeders hedged in June will be incentivized by out front trades. The packers will look to build their inventory and secure their leverage in the weeks 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.
