After trading limit lower for two straight days, the cattle markets caught a relief rally yesterday with the nearby contracts trading limit higher for most of the session. Dec live cattle synthetics finished the day near $132.00, an additional ~$0.70 above the daily limit. Expanded limits are in place again today. Our first snow event across NE/CO/KS of the season has reminded us that winter is on the way and packer bids shown at $131 in KS gives the market an idea of what our worst case cash cattle trade could be. Frustration is rampant amongst traders, brokers, producers, end users, bulls, and bears alike as this volatility and limit moves aren't fun for anyone. Blame is focused on everything from an exit of fund participation, to high frequency traders, to a lack of negotiated cash cattle trade, and even outdated contract design. If those are indeed the culprits, it'll be tough to ever return to "normal". Or, maybe this action is simply the result of a market in the volatile "come down" from 2014's blow up, something we've already witnessed in other commodities over the past two years??
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