Call the Market

Everyone who's ever dabbled in understanding the markets has been taught about the laws of supply and demand, but understanding leverage and that who possesses the most leverage can change on a weekly basis is equally important.

For instance, over the last two weeks, the fed cash cattle market was able to trade higher after a painstaking July. Feedlot managers were patient when it came to marketing their current showlists, and to their advantage, boxed beef prices were higher, which encouraged packers to be active in the marketplace.

But in trying to stay in an offensive position as opposed to being stuck playing defense and ultimately having to pay more money in the fed cash cattle market for the foreseeable future, packers doubled down last week. They did so to better prepare themselves for the weeks ahead by doing a couple of different things.

First of all, they were extremely aggressive in the fed cash cattle market. Last week's negotiated cash cattle trade totaled 104,609 head. Of that, 84% (87,876 head) were committed to the market's nearby delivery option, while the remaining 16% (16,733 head) were committed to the market's deferred delivery option. That is the largest weekly cash cattle trade thus far for 2026. Second, they continue to run extremely light slaughter speeds to avoid pulling on their supplies, which would ultimately force them to be more aggressive in the cash market. As of Tuesday afternoon (Aug. 11, 2026) year-to-date cattle slaughter totaled 16,571,826 head, which is 8.1% lower compared to a year ago.

By combining these two tactics, packers have placed themselves in a position that gives them greater leverage than what they had last week, or even the week before. This is why it's likely that fed cash cattle prices will trade steady at best this upcoming week as packers simply won't have to chase after cash supplies as aggressively. And at the end of the day, possessing the lion's share of the market's leverage is what gives someone the upper hand in the marketplace, and last week -- that turned to packers' favor.

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

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