The market crawled through last week's developments and savored some wins; but it also endured some significant losses that could be problematic for the weeks ahead. As the cattle market returns to trading this week, it's our job to piece the clues together and try to make sense out of what's to come next.
The market's biggest disappointment in last week's trade was the lousy volume of cattle sold through the cash market ... or I should more accurately say, the lack thereof. On a typical holiday week, such as during the week of Christmas or Thanksgiving, the market doesn't expect to see many cattle trade. But on a usual week, the market fully anticipates seeing anywhere from 70,000 to 120,000 head of cash cattle trade. Last week's movement only totaled 48,965 head. The week before, the market moved 79,496 head and a year ago, the market saw 92,334 head trade hands.
The market has gotten comfortable processing close to 120,000 head daily, roughly 5.5 days per week. When only 48,965 head trade, that means last week's cash market only sold 7.4% of the cattle needed to process in one week. (120,000 head x 5.5 days = 660,000 head per week; 48,965 head/660,000 head = 7.4% of the market's usual weekly volume).
This is problematic as the market heads into two shortened, holiday-influenced weeks. The Fourth of July landing on a Sunday this year will affect not only this week's trade but also next week's trade. It's hard telling whether packers will process cattle this Friday, but this coming Saturday will most likely be dark and Monday's levels will likely be affected too.
The shortened week won't only affect the fat cattle market, but it will also affect the feeder cattle market this week and next. Before loading up your trailer and heading to town, make sure to call and check with the sale barn to confirm they are indeed hosting a sale as most auctions take the week off to observe the holiday. Even though feeder cattle sales are expected to be light for the next two weeks, the futures market will continue to monitor the corn market's behavior intensely.
Tune into this week's Cattle Market News update to hear the fine details pertaining to last week's cattle market. Click on the link below to watch the video or head to the DTN/Progressive Farmer Facebook Page: https://fb.watch/…
ShayLe Stewart can be reached at ShayLe.Stewart@dtn.com
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