CATTLE: HIGHER

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Including Friday’s sharp $2.55 gain, nearby August live cattle futures finished the week with a $7.47 rally and literally closed on the weekly highs. This as the cash cattle markets saw small volumes move at $162 in the North on Wednesday only to trade as high as $165 in the South on Friday morning, up an incredible $9-10 vs. the bulk of the prior week’s business. I have only witnessed this size of a week-to-week move once in my career (Oct. 2003) and is indicative of the truly historic move that is upon us. The beef markets performed similarly as the choice and select indices were up $9-12 last week, packer margins remain positive, and yet cattle supplies are tight enough that packers have not been able to support a kill any larger than 580K head in each of the past three weeks. The USDA’s monthly Cattle on Feed report showed slightly less than expected placements and on feed numbers, but the overwhelming story this morning will be a cash market that continues to lead futures higher. Nearby August live cattle and feeder cattle futures are both already showing limit higher bids this morning.

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