The last two weeks have been an emotional rollercoaster for the cattle market. Two weeks ago, the feeder cattle market dived and nearly closed at the market's new limits; for the rest of the week, the market traded doggishly weaker. Then, last week, the market jumped from Friday-to-Friday $7.75 in the November feeder cattle contract and $8.58 in the January feeder cattle contact.
The feeder cattle market has been busy hashing out the specifics of fall demand, corn prices and intricately monitoring if, and by how much, supply is outweighing demand. Meanwhile, the live cattle market has sorted through its own burdens.
During the last two weeks, one the biggest hinderances on the live cattle front has been the lack of certainty in demand. With COVID-19 cases continuing to draw attention, concerns about consumer demand and how the food-service industry will maintain business during the next two months remains questionable. Along with uncertain beef demand, the cash cattle market has seen problems as the market continues to regress -- last week packers only bought 57,981 head of negotiated cash cattle. Last week's purchase of negotiated cattle was the second lightest of the year, falling second behind the week of April 19, 2020, when only 20,736 head traded and plants were shut down.
Heading into this week's trade, feedlots have their eyes on higher prices. Packers opted to give up market leverage last week in trade, leaving feedlots high and dry, sitting on a large majority of their showlists. This week, however, packers are going to pull on formulated cattle to help curve the lack of cattle bought last week. They will most likely end up paying higher prices later in the week as feedlots are determined to price their cattle higher.
Throughout Monday's trade, the market was leery of trading higher as immense pressure from the upcoming presidential election looms over the marketplace and our country. Until the election is officially over and it's clear who our new president will be for the next four years, it wouldn't be a surprise to see the market hesitate like the rest of America is doing.
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ShayLe Stewart can be reached at firstname.lastname@example.org
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