Live cattle futures opened roughly $1.00 higher yesterday morning, before slipping lower through the rest of the session and closing as much as $1.00 lower. Friday’s cash cattle trade, which was as high as $135 would have been on the high end of expectations, but I sense the industry is torn between that positive news and a still sour outlook for boxed beef markets in these next few weeks as well as poor macro market performance. Overlaying cattle futures with the S&P 500 reveals a recent correlation that’s more than just coincidence, with cattle falling victim to the “risk on / risk off” mentality of Wall St and using equities as a gauge of economic health. Wholesale spot boxed beef was down $1 in the choice yesterday afternoon and almost $2 in the select, with some analysts projecting the choice to move back down into the $210-215 range in the next couple weeks vs $225 currently. Remember January feeder cattle futures expire Thursday, where the current feeder cattle index sits at $157.54 vs futures at $160.22.
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