The cattle markets were lower from the start yesterday, disappointed with a bearish-looking COF report and particularly in a Friday evening cash cattle trade which developed at mostly $138, below the $140ish expectations. And after an impressive two plus weeks of strength, the boxed beef markets have shown some signs of weakness as well. All of this perhaps giving the futures market an excuse to consolidate near this $140 level for the moment?? I also see more attention being paid to the by-product and lean trimmings markets which have remained very weak in spite of the quick rally we saw in futures, cash cattle, and most of the beef products. Fresh beef 90% lean trim was quoted at $2.26/lb yesterday afternoon, down from $2.80+ six weeks ago and a $3.04 all-time high this past January as Cold Storage stocks and imports remain large. Meanwhile the drop credit (by-product) value is down to $10.92/cwt, down from $16.69 last August, and now a five year low, reminding us that demand headwinds still persist.
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