Sort & Cull

The two loudest messages the cattle complex gave from Monday's trade were that traders are well-aware packers possess the lion's share of the market's leverage -- and no one is exactly sure what to expect from the border reopening to Mexican cattle imports.

Initially, Monday's market opened higher. But as traders analyzed where the market sits and what's expected next, a bearish gloom appeared across the market within minutes. This drove contracts to close noticeably lower by Monday's end.

Unfortunately, as I sit here today, I hate that I can't consult a crystal ball to tell you exactly what's going to unfold with the U.S.-Mexico border in the weeks to come; at this point, we have to sit and wait. It's unknown exactly how many cattle will come across the border daily; what weight they'll be; or where they'll immediately find themselves in the supply chain. However, I promise as the news develops, DTN will keep you posted.

This uncertainty worked against the cattle contracts throughout Monday's trade. The live cattle contracts closed anywhere from $2 to $4 lower and naturally the feeder cattle contracts were even more grim, closing mostly $4 to $5 lower. Then, when you couple the board's tough performance Monday with the fact both fed cash and feeder cattle prices are likely to trade lower this week, you can begin to feel the bearish weight cast against the market.

We know these long, hot days are called the dog days of summer for a reason. But when there is additional pressure imposed on the market -- like the border reopening, or President Donald Trump's announcement of increased imports or Friday's Cattle on Feed report -- additional down pressure should be expected.

See related DTN stories:

-- "Rollins Touts AZ Port Opening, NWS Lab," https://www.dtnpf.com/…

-- "Trump Proposes Lifting Tariff Rate Quota on 300,000 Metric Tons of Beef Imports," https://www.dtnpf.com/…

-- "USDA Aug. 1 Cattle on Feed Report," https://www.dtnpf.com/…

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

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