Cattle futures turned in a two-sided performance for a second session yesterday, finishing narrowly mixed in both the feeders and the fats. Much of the conversation has moved to the beef market, where the spot cutout indexes continue to move sharply higher, up another $4+ in the choice yesterday and almost $6 in the select. Nowhere is the holiday-interrupted slaughter schedules and cleaned-out pipeline more apparent than in the 50% trimmings market, which was quoted yesterday at 64 cents, up from 44 just yesterday and a low of 34 two weeks ago! Very few are willing to mention anything about “improving demand” just yet, but we also recognize that its not uncommon for this seasonal rally to last another 1-2 weeks and obviously doesn’t hurt cash cattle market potential. This morning, we’re again watching much weaker macro markets, with equities on three month lows and crude oil on multi-year lows. We’ll expect cattle to start weaker as well this morning, but probably have as good a chance as any to trade back to unchanged or higher at some point today.
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