Whenever the fed cash cattle market trades below 60,000 head, it's considered thin movement; but last week's movement was scarily thin, with only 39,991 traded.

Last week was a nail-biter of a week as the fed cash cattle market didn't see trade develop until late Friday afternoon, well after the market closed. But the wait was well worth it as a couple of regions scored new all-time highs, following the previous week's massive rally. A few deals were marked in Kansas at $249, which is $3 higher than the previous week's weighted average, and at $248 in Texas, which is $3 higher than the previous week's weighted average. Northern dressed cattle traded for $385 to $389, which is steady to $4 higher than the previous week's weighted average.

It's been a back-and-forth battle between feedlot managers and packers as they obviously want the market to trend in opposite directions. But with Mother's Day and Memorial Day both coming up in the next month, packers know they cannot afford to be too short bought. As we've recently seen, that can allow the cash market to jump wildly, which pains their bottom line.

Another interesting thing about the dynamics of the market last week was that throughout the week, select cuts on average were priced higher than choice cuts. The National Weekly Boxed Beef Cutout and Boxed Beef Cuts report shared throughout the week showed choice cuts averaged $382.48 (down $9.79 from the previous week) and select cuts averaged $383.98 (down $6.11 from the previous week).

Who would have ever thought the industry would be so short-supplied with lean beef that select prices would average more than choice cuts on any given week? It's not that unusual for the market to see select prices close higher than choice every now and then, but for the weekly weighted average to show select prices higher than choice prices, that signals something bigger. That's caused by a historical low in the U.S. cow herd size amid a time in which imports from Mexico are obsolete. We know at some point in time (probably within this calendar year) the border will reopen to live Mexican cattle imports, but what's the outlook on the U.S. beef cowherd if the drought outlook doesn't improve?

The changing dynamics within the marketplace are mind-blowing in this current cycle. At one point in time, it would have been idiotic to think there would be fewer than 100,000 head traded in the fed cash cattle market. It would have been nauseating to imagine on any given week that select prices could average more than choice prices. But here we are folks, absorbing it all as it comes. If there's one major takeaway from this all, it's incredibly important to remain invested in monitoring and tracking the markets right now because the dynamics aren't as they normally are and the market moves at a faster pace almost daily.

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

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