Four-Day Weekend for the Bears?

I’ll be the first to admit I’m not usually a lucky person. My family calls it the “Cozza curse,” and it has inevitably followed us from faulty pipes to flat tires and just about everything in between. If you haven’t noticed, it also seems to plague the cattle industry from time to time - but today wasn’t one of those days. As luck would have it, Thursday’s rally did make it through the weekend. Dare I say it? Dare I do, because it did. Every now and then, the good Lord throws us a bone. Today, the bears threw the bulls one - use it wisely!!

Lately, the cattle industry has received plenty of attention - from the government level to the consumer. Some might say Thursday’s rally had a lot to do with anticipation ahead of Friday’s announcement. Others might say today’s rally had much to do with Friday's announcement. Whichever way you swing it, Chicago - much like a majority of those of us in cattle country - believes MCOOL is not only good for the consumer, but also good for the producer and ultimately the marketplace.

And quite frankly, the packers must see substantial value and a premium market to capture in that USA label too if they’re willing to put it on foreign beef - and get sued over it. True story. Add that to the growing list of things the corporate packers have found themselves in court over. Not to mention the wrench that throws in the consumer trust for beef, but I suppose that’s another bone for another day.

But I must say, for every bone this market throws us, it seems to leave another one for me to pick. That said, why wasn’t it blasted across the headlines that Mexican cattle border crossings were halted last week? I don’t care if it was an equipment glitch or not - it was Friday before I saw the news so much as mentioned, and I strongly believe it would’ve given the bulls some added psychological support on the board... but that’s just me. Instead, bullish news gets buried in the classifieds, and the bears get blasted on the front page.

Regardless, the long weekend clearly did us some good. And the feedyards deserve all the credit for pinching another dollar out of last week’s cash trade, helping spur today’s rally. The top end of last week's market hit $223, spilling over into Saturday's trade. Had that crystal ball sitting on my Christmas list come through for us, plenty of feeders probably would’ve held out for more of that action Thursday and Friday, and the price trend would’ve looked considerably different. But we'll take the wins where we can get them.

Boxed beef prices softening under higher chain speeds and weaker beef demand last week could put pressure on slaughter volumes again this week, paired with a short week due to the holiday. Not to mention the heat is finally expected to ease over the next couple of weeks, which typically means better feeding weather, better gains, and better production levels. Here in the States, we’re sliding into casserole season and crockpot meals, so a little seasonal demand overseas sure wouldn’t hurt. In the meantime, today’s rally in fats narrowed the basis to roughly $2 below last week’s weighted average on cash. Light trade today came out at $220, $2-4 higher than this time last week, but $3 under the top of last week's market. A little more green on the board might be just the boost these feedyards need to set the stage for steady-to-higher trade this week. As they say, the week's still early – but after all it is.. Tuesday? Have a good evening!

Thanks,

Samantha Cozza-Wright