Will the Fat Cattle Market Reclaim its Rally This Week?
By ShayLe Stewart, DTN/Progressive Farmer
Through August, the fat cattle market was on a roll as packers mowed through fed cattle supplies and were forced to chase after the cash cattle market. But leading up to the Labor Day long weekend, packers abruptly backed away from the fat cattle market and let it trade lower in prices, as well as lower in total volumes traded for three weeks.
Last week. feedlots went toe-to-toe with packers placing their asking prices high early in the week and being willing to sit on their showlists for as long as it took. Monday went by, no trade. Tuesday went by, no trade. Wednesday went by, and only a handful of cattle traded.
But come Thursday, packers started to really sweat and so consequently they paid $142 in the South, which was $1 higher than the week before, and gave $226 to $227 in the North which was steady to $1 higher compared to the previous week's weighted average.
Packers knew that their window was thin of being able to pump the brakes on the cash cattle market as showlists are incredibly current and processing speeds have continued to run vigorously. But, given that last week's market saw steady to $1 higher trade, everyone will watch this week to see if the market regains its upward trajectory.
Short-term bear-spreaders could point to the fact that boxed beef prices have been struggling as a possible reason as to why the market may stay stagnant. Last week, choice cuts averaged $259.27 (down $0.46 from the week before) and select cuts averaged $236.90 (down $2.17 from the previous week) with a total movement of cuts, grinds, and trim totaling 650 loads. But while the boxed beef market may see some pressure, that's not an unusual thing to happen through September. September has historically been a month in which boxed beef prices wane and given that inflation is 8.3% higher than a year ago, it makes more sense why boxes are currently under pressure. Packers...