"Volatile" probably isn't a strong enough adjective to describe the cattle markets anymore, where $2.50 moves now occur in five minute spans. Monday's limit lower session was followed up with another sharply lower trade yesterday, touching the expanded $4.50 LC and $6.75 FC limits midday. That was enough to press futures below their September lows, levels many thought were untouchable just 10 days ago. I do see reports of a light $126-130 cash cattle trade in the North, lower than last week of course, while country feeder cattle and cow auctions also report sharply lower prices almost unanimously. Note the current CME feeder cattle index sits at $185.88 vs $171.55 futures with just eight days til expiration! The USDA's monthly supply/demand report showed a 79 mil lb decline in their 2015 beef production estimate and a 110 mil lb decline in 2016, citing slower marketings through Q1. They now have 2015 production down 2% vs last year before it rebounds 5% next year. They also decreased their export forecast citing weak demand.
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