Live cattle futures gapped sharply lower yesterday morning and traded weaker from there, with the nearby Dec contract down the expanded $4.50 limit at one point yesterday morning. This as we saw additional cash cattle trade develop in the South at mostly $124 (with some $125), down from a $126-127 market of the prior week. Through just four days this week, Dec futures are off a sharp $6+, but the move has fulfilled some much needed cash-futures convergence and likely shuts down the delivery threat after first notice day next Monday. Dec futures also closing a continuous chart gap left back in early October and satisfying chart watchers. Look for a firmer start across futures this morning. Do remember, though, that the WTO is expected to issue their final ruling on our country of origin labeling law sometime Monday. The WTO ruled against the U.S. this past summer, the U.S. appealed, and most anticipate the U.S. losing this appeal as well, which sets in motion Mexico’s and Canada’s ability to impose new tariffs on U.S. product, meats being one of many targeted products.
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