Cash fed cattle market trades higher
Aside from some $89 live trade and $139-140 dressed trade in Nebraska early last Wednesday, fed cattle trade was slow to get started last week. The slow start came despite anticipation that feedlot sellers and packer buyers would get trade finished before the holiday. A sharp rally in the futures trade last Monday gave analysts some hope that better cash prices would result, however, the wide basis spread between futures and cash, along with the weakening cutout and soft retail markets, had expectations for trade at prices mostly $1-2 higher than the prior week. The previous week’s trade came in at $87 live basis in the south, while the northern Plains and Corn Belt feedlots sold live cattle in a range of $86-88.50, with dressed sales at $136-140.
Analysts said the market fundamentals have largely been ignored in the recent weeks and fed cattle prices have suffered unnecessarily as a result, with prices dropping farther than needed two weeks ago. The futures market has been tracking along with equity trade while market-ready supplies of fed cattle dwindle. Packers, on the other hand, have been working through their live inventory at high speed and may be on the short-bought side now as they take advantage of very good per-head margins. Although boxed beef offerings have been heavy, the cutout has remained stronger than expected, giving them room to pay higher prices for cattle.
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