We assume a problem at a plant or two today is what brought the week's kill estimate down so much. With only 105,000 head suggested by USDA's weekly packer survey for Friday's kill, the week would run at only 622,000 head.
Cash trade last week ended around the $109 level which was up another dollar from the previous week as cash prices have gradually moved higher almost a dollar each week since bottoming around the $105 level.
Cash was quiet last week with a few reported at $108.00 and futures prices moving off their lows last week into Fridays close. The market took a sharp drop early last week before seeing a short recovery into Friday.
Cash trade came in a little higher this week at $108 which may have been just a little higher than most had expected, but the move up in the nearby October contract was significantly more than anyone had expected.
Packers may regret their role in bidding up for cash cattle today. Sales were seen at $108 in the South and $109 in the North today before the 2 pm Cattle on Feed. Those prices were $2 and $3 higher than the previous week.
Feeders also saw a major move to the upside this week, but unlike the Live Cattle price which has been holding inside a trading range, feeder prices have continued to work higher and cross several key resistance levels over the last four weeks.
Cash trade is expected to come in steady with last week around the $105 mark, but last week the same thing had been expected and futures prices actually rallied closing at around a $2.50 positive basis the cash which was a rare occurrence seen this year.