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By Cassie Fish,

After a big two day correction in live cattle futures, the market has rallied back with a vengeance. Open interest dropped about 11k contracts on the break and perhaps that was enough. The correction took care of the overbought technical posture

Spot October LC has charged to new all-time highs today. The rest of the contracts thus far not trading above Monday’s high or last week’s highs, which is when contract highs were established. Feeder cattle futures are keeping pace with the live cattle futures rally but are way off of their highs made September 15. As the long-term rally grows with age, volatility increases.

There is finally some good news in the wholesale beef market. The rib, a key player in every Q4 rally, caught fire yesterday and beef 50s, which have been under significant pressure for all of September are showing signs of a bottom. Choice boxes printed higher yesterday and again this morning, now back up to $301.48 after dropping under $300 earlier this week for the first time since May.

The negotiated fed cattle market trade volume totals 51k head this morning, prices generally steady to maybe a touch softer in spots with last week. Packers are demonstrating their interest in keeping inventory around them heading into Q4.

This week’s harvest is expected to be smaller than last week’s 625k as a few plants are dark tomorrow and Saturday’s slaughter is very small. Packers are still struggling with margins.

The USDA released actual carcass data this morning and steer weights increased 2 pounds to 919 pounds, up 2 pounds from a week ago and up 1 pound from a year ago. There are two years that had higher weights than 919 for this week, 2020 at 920 pounds and 2015 at 923 pounds. Weights don’t seasonally top until November or even early December.

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