Mackey: Turbulent Futures Incentivized Packers
In what seemed like a mirror image of the previous week’s trade, cattle markets moved $1 lower. The turbulent futures market incentivized packers to get creative with lower bids. The South was the first to trade on the futures big break. Hedged sellers captured basis and sold cattle for $182 cwt live. Multiple packers participated in the trade, probably more evidence of the currentness in the South.
The North however, would resist the early week business and held to their steady money expectations. Bids of $183 live/288 dressed began to surface and initially refused. As the board would take its second leg down packers motivated sellers with additional kickers on their offers. Offering additional “Plus” money to their bids worked two-fold. Allowed cattle feeders to capture basis and kept a steady money bid from hitting mandatory reports. The reports will show the bulk of the business in the North eventually traded for $183 cwt live and $288 dressed. $1-2 lower compared to the previous week.
The most welcome price direction came on the back of the cutout. Choice boxes printed $4 higher Friday, finally responding to the limited production from the last several weeks. As the boxes ran the futures followed, as did cash bids. Any remaining cattle would receive $184 bids, just a smattering would trade that way. Most will look for higher asking prices to begin the week next week.
