The cattle markets traded sharply lower from the get go yesterday, settling down the limit in both the feeders and the fats. Nearby Oct live cattle were synthetically trading down another $1.75 on the close yesterday, on top of the $3.00 daily limit. This sharply lower midweek move seems to have become the modus operandi of the cattle complex as the industry realizes we're in for yet another lower cash cattle trade. Yesterday we saw some light volume business in the North at anywhere from $191-196 dressed and some $118-121 live. Even with larger slaughter totals in recent weeks, I sense much unease about whether packers will even need to participate in this week's cash trade as they've been sourcing cattle for early Oct delivery for at least the past three weeks now. One customer yesterday indicating they'd traded cattle for as far out as early November delivery! Futures will have expanded $4.50 (LC) and $6.75 (FC) limits today. Any rallies will be quick and violent as we saw late last week, but for the market to firmly regain its footing, we really need to see the cash market stabilize.
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