I wish it wasn't true but, as the market's fundamentals indicate that cash prices could still be trading higher, I'm beginning to believe we've already seen the spring high in the 2023 cash cattle market.
Early in April, the market was charging full steam ahead into the spring season and feedlots were in control of dictating what cash cattle prices would be. But now, cash cattle prices have traded lower over the last three weeks and packers have gained a foothold on the market. Through their meticulous market strategy of running moderately paced processing speeds and continuing to procure as many cattle as they can to the deferred delivery option, packers have made significant headway over the last three weeks.
What does that mean for the market ahead?
I'd advise everyone who's concerned about the cash cattle market and achieving the highest prices possible for fat cattle to revisit what happened back in 2014.
In 2014, a spring cash cattle high was made during the last week of March. From the first week of April through the end of May, cash cattle prices decreased slightly (keyword being slightly), as prices decreased by a mere $8.00 over that time span. Through the month of June, prices jumped back and forth, but by July 1, prices were again on the gain.
If our demand picture is better than what it was back in 2014 and our market-ready supplies of fed cattle are even tighter, who's to say that the market can't spend a couple of weeks trading slightly lower before it then begins to trade higher again?
I'd argue that feedlots are in the hot seat to answer that question.
If this bull run is going to reflect similar patterns to what the market did back in 2014, cash-cattle participants will have to continue to drive this bull run. As folks often say, "there's a time to walk, and there's a time to run," and in this scenario, I'd like to add that there's also a "time to charge!" If feedlots want higher prices, they'll have to demand them.
ShayLe Stewart can be reached email@example.com
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