Sort & Cull

Last week's market was exhilarating as day by day the live cattle complex grew stronger and stronger to the point where futures successfully closed above not only the 40-day moving average but also the 100-day moving average. Thankfully the market's gains weren't only technically backed in the futures complex, but also fundamentally as cash cattle prices traded anywhere from $2.00 to $4.00 higher.

Last week Northern dressed cattle traded for mostly $290 to $292, which is $2.00 to $4.00 higher than the previous week's weighted average. Southern live cattle traded for mostly $183, which is $2.00 to $3.00 higher than the previous week's weighted average. Last week's negotiated cash cattle trade totaled 86,956 head. Of that 89% (77,210 head) were committed to the nearby delivery, while the remaining 11% (9,746 head) were committed to the deferred delivery. New showlists appear to be mixed, higher in Texas, somewhat higher in Kansas, but lower in Nebraska/Colorado.

But heading into this week, everyone seems to be asking the same question: Who holds more of the market's leverage right now? Because that will determine how cash cattle prices shake out this week.

On one hand, you could say packers will be able to keep the market from trading any better than steady simply because they'll adjust processing speeds accordingly. But on the other hand, you could argue if packers aren't semi-aggressive in this week's cash cattle market, they may not have to pay up for cattle this week; but with only having purchased 9,746 head for the deferred delivery last week -- the following week will favor feedlot managers because packers don't have many cattle with time on the books.

Boxed beef prices, the board's support and throughput will obviously heavily dictate how this week's cash cattle market pans out. But, thankfully, after last week's rallying gust, feedlot managers seem to have a spot at the table where negotiations can at least happen, as opposed to simply having to take whatever bid surfaces.

ShayLe Stewart can be reached at shayle.stewart@dtn.com

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