Under pressure from negative margins, packers will continue to play their games but their activity last week led to the biggest harvest rate in seven weeks.
Cash fed cattle prices reached new record highs in all feeding regions last week, but the trade was a bracket-buster for packers who were forced to pay up as wholesale beef prices declined.
Negotiated cash trade finished the week in a standoff with few sales and little price movement. Feeders and packers both look to benefit from improving winter weather and pen conditions this week.
Severe winter weather across cattle feeding country reduced weekly harvest and damaged feeding performance. Cattle feeders will seek higher prices this week.
A year ago feeders were concerned about weathered cattle and tough pen conditions and how at times it would be the motivation for sellers to take the market. It’s eerie how not much has changed in that sense.
Increased packer margins in recent weeks has encouraged a quicker chain speed. That speed likely will not be supported through the end of the year with two Holiday shortened weeks.
Declining cattle futures prices continue to pressure cash prices. The cheaper inventories are working to pad the packer's pocket as evidenced by a few plants operating on Saturdays.
Friday’s COF placement numbers provided a friendly lean to a market that has suffered consecutive weeks of falling futures and lower cash bids. Sellers hope to leverage the short week ahead with higher asking prices.
Last week saw several feedyards pass on steady bids from packers. Cattle feeders are counting on declining numbers of Choice carcasses to bring packers back with higher bids.
Packers were forced to add to their inventory and pushed prices $2 higher last week. The surprises in the Cattle on Feed report may offer a reason to push prices lower, yet feedyards maintain the upper hand.
Fed cattle trade posted gains last week, but the rally was not incentivized by wholesale beef prices, but rather pushed by limited supplies of ready cattle.
Working off a big trade the previous week and slowed production, packers were reluctant to purchase cattle but the futures market took a dip and buyers stepped in at steady money and gathered inventory.
Packers narrowed the North-South spread last week and through a series of factors including the weather, have seen the marketing leverage swing in their favor.
Cattle feeders were rewarded in last week's standoff with higher prices in all regions. Packers will continue to slow harvest rates in an effort to hold the market in check.
Cattle feeders focused on helping cattle where they could through last week's extreme heat and humidity. Packers looked to work the market lower, but relatively few cattle changed hands as cattle feeders held firm.
Attractive wholesale beef prices have encouraged packers to give up some inventory with aggressive slaughter numbers. Packers may need to get creative in the weeks ahead as numbers decline.
Packers desperate to keep their grasp on the cattle market looked to their inventory to keep the pressure on cash prices. Cattle feeders reluctantly traded lower.
The price spread between Northern cash cattle sales and Southern sales more than doubles as packers struggle to find inventory to maintain acceptable capacity utilization.
The current front-end supply and winter delayed calf-feds have the northern packers stretched for inventory. Will that aid feeders' ability to push prices higher in the coming weeks?
Packers are working to remain profitable, using basis for extended delivery, freighting cheaper inventory to areas of regional cash strength and running harvest at a snail's pace.
A softer market for the first time in a month, but its a breather we have all been expecting. Keep an eye on the basis between cash and futures as packers will use it to gain leverage.
Packers continue to haul cheaper inventory to regions grinding higher and peel back harvest to stall the market. This is all friendly, one does not cut kills with peak demand on the forefront.
With cattle feeders in the driver's seat, packers will seek leverage to price cattle for future delivery. They aren't looking to do feeders a favor with the strategy.
Instability in equity markets proved a drag on futures last week, providing an incentive for feeders to trade on lower bids. Packers will continue to struggle with inventory going forward.
Beef packers show their willingness to rely on their captive supplies as they struggle to hold a lid on rising cattle prices. Tighter supplies in the coming weeks will force their hand.
Cattle feeders are firmly in the driver's seat as cattle prices continue higher. Contract cattle and commitments to packers are dwindling and won't last long.
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.
Tighter inventories of market-ready cattle are leaving packers little alternative to placing higher bids. Last week's 5-area average price was the highest in nearly eight years.
Packers waited as long as possible last week, grudgingly pushing the market higher with trades well into Friday’s happy hour and some even on the weekend.
