As expected, packers put the brakes on the harvest and the market slows. This came as no surprise to cattle feeders as early week expectations for harvest was to land between 610,000 to 615,000 head and right on cue Friday’s harvest prints at 612,000 head. This was down 13,000 head from the previous week.
The industry looks to have another week of slowed production in store as the packer looks to reverse the struggling cutout. Again, no surprise as the cutout appears to be on trend, seeking its seasonal bottom middle of this month.
Working off a big trade from the previous week and slowed production, the industry expected packers to be more reluctant in pushing for cattle, but as the future market took its first dip of the week, buyers stepped in at steady money and gathered inventory. A few hedged feeders in the North, but mostly in the south saw it fitting to take basis and move cattle at mostly $183 cwt live and $290 dressed, steady to $2 softer dressed. Those that didn’t sell would feel pretty good Thursday when futures made a $2.00 reversal to the upside.
Many remaining showlists raised asking prices to $186 cwt, but it was clear most of the needs were met and the market was established from the early week business. National volumes out Friday have packers purchasing 13,000 fewer head than the week previous and most of the deficit found between NE and IA.
Looking ahead, many will breathe a sigh of relief as government will remain open. Packers will look to add to their inventory without burning through their stockpile. Cattle feeders will continue to move profitable cattle.
