Mackey: Feeders Continue to Face Headwinds
Cattle futures have been in somewhat of a reset mode. Despite the negative headwinds, cattle feeders continue to show solid support at the cash market. Early week sales of $187 live and $297 dressed would gather the majority of cattle last week.
The North continues to see multiple bidders present in the market, though all sticking to their own buying agendas, to keep out of one another’s road and to keep pressure on the market. The more impressive action was seen in the South. Albeit lower trade, South would move cattle Friday at primarily $184 and strong basis with Friday’s future erosion. The final tally will show a bigger trade than the week previous.
The bigger buys have allowed packers to open the throttle on the harvest. Fridays’ harvest came in at 609,000 head. That’s the biggest kill the industry has seen in seven weeks and 23,000 head larger than the week previous. The bigger production likely contributed to the softening cutout, as the packers looked to move more tonnage.
Looking ahead, Packers will continue to play their game— working bids lower and more in line with the futures. Cattle feeders will look for a reset of their own. Seeking to shake the last two weeks setbacks, feeders should start by looking to hold the market steady.
