Saying the cattle markets had an "emotional" week last week would probably be an understatement... limit lower Wednesday, reversal on Thursday, and limit higher on Friday. December live cattle futures synthetically traded near $138.20 on Friday afternoon, another $1.20 higher beyond the $3.00 trading limit. Amazingly, if you include those "additional" ~$1.20 gains, both live cattle and feeder cattle futures finished the week essentially unchanged! We all now ask whether that was a meaningful bottom or simply some kind of a dead cat bounce? There's still an idea held by a majority of the industry that once we can work through these very heavy front end cattle numbers, supply gets considerably tighter into the fall. Well-margined packers are doing their part, pushing through 574K head last week, slightly lower than 576K head the prior week, which are two of our three largest weekly totals of 2015. Wholesale beef values have taken a drubbing, down $14 in the choice cutout index last week, but so far packer margins remain positive. Futures should start higher this morning, but can it stay there??
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