Hulett: Basis, Feed Costs Push Trade
Cattle feeders in the South wasted no time last week beginning the cattle trade. The combination between favorable basis and high feed cost pushed feeders to trade a couple dollars lower at $135.
The northern market was not spared by the lower trade in the South. Most cash cattle were a dollar softer at $139. Dressed cattle also lost a few dollars and traded mostly $219-$222.
Basis traders may not have as much incentive to hurry out of the gate this week. After the trade last week, the board went on a good rally, narrowing up basis. Carcass weights continue to decline, and grade will be harder to come by as long as feed costs remain high. These two factors may lead to a market turnaround sooner than expected.
Brad Hulett is Director, Customer Development & Regional Manager, Kansas, at Consolidated Beef Producers, Inc.
