Our first major winter weather event of the season across the western plains and front range wasn’t enough to offset Friday’s disappointing cash cattle trade and live cattle futures spent most of the session pinned limit lower yesterday. Expanded limits are in place today. Nearby Dec live cattle was synthetically trading near $126.90 by day’s end, $0.70 below the daily limit. KS, TX, and CO each showed $129 cash averages, NE $127, and IA/MN $124, all on very light trade volume. Suddenly both the cash and futures markets are back on five week lows with growing ideas that we’re headed back to retest those $120 levels seen in late September. What about demand, when do we finally begin seeing some improved demand on lower prices?? First we need to start seeing the sharply lower wholesale prices make it to the retail level, which we haven’t. While the wholesale choice cutout index is down 18% vs last year, weekly average beef retail prices are at $5.46 (down 2% vs LY), pork $2.99 (down 10% vs LY), and chicken $1.66 (down 22% vs LY).
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