CATTLE: LOWER

Post 379 of 799

The cattle markets traded to yet another new round of highs yesterday – record high live cattle futures, record feeder cattle, record beef, and we expect to see a record high cash cattle trade before the day is out. We have yet to see any significant cash trade to this point in the week, and after yesterday’s $2 futures rally, are we really expecting a $155+ cash market? Up $5 vs. last week?! Everyone is shocked, awed, and uncertain. While it is impossible to point out a single root cause for this move, I do think there are a growing number of traders and participants willing to point to the beef market. We are all well aware cattle supplies are tight and getting tighter, but we did not know the beef markets could support these price levels . Our industry seems to spend a significant amount of time fretting about what record high beef prices will do to consumer demand, but most indicators would suggest demand is healthy, especially export demand, and the beef markets trading to record highs during this time of year is perhaps more evidence that demand can indeed sustain a higher price level.

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