Cattle Complex Catches Breath After November Nosedive

Commodity traders at the Chicago Mercantile Exchange were more than willing to take it easy Wednesday, after the previous three sessions saw sharp swings across the cattle complex.  Massive drops Friday and Monday were followed by a jarring reversal higher Tuesday, including a limit-locked close for January feeders.  Commodity analyst Tom Leffler says the slide lower is a far cry from historic highs set weeks ago.

Before Tuesday’s recovery, live cattle futures for February dropped $28 per hundredweight from their September highs, with April falling $29.  Among the feeder cattle contracts, January slid $56 per hundredweight while March was off $54.50.  Trading on Wednesday finished higher by just over a dollar for both live and feeder cattle.

Leffler explains a factor for the significant swing in price.

Commodity analyst Tom Leffler notes that higher feedlot populations, combined with lower placements the past two months, have also put downward pressure on the complex.  However, while futures have seen a sharp decline since September, beef cutout values and cash cattle prices have not seen as significant a drop.