A few cattle traded at $114.00 live in the Panhandle and Kansas Thursday as the board fell apart. It represented a very attractive basis and some feedlots probably decided to take advantage rather than wait to see what next week would bring. If the futures market and the beef continue their downward slide, we don't think even $114.00 will be attainable for feedlots next week. Packer margins remain in the red and they will be looking to buy cattle even cheaper.

The choice cutout was down $1.60 at $179.34 last night, with the select down $0.79 at $174.23. Middle meats got hit hard, with both loins and ribs losing considerable ground. Chucks were steady/firm, but rounds were soft. Ground beef also remains under pressure as consumers back off on discretionary spending due to high gas prices.

Cash hog calls are steady to lower this morning. Packers end the week with very good numbers around them for next week. Many are already into the following week on purchases. Margins remain poor and numbers continue to come fairly easily.

The pork cutout lost $0.37 last night. Loins were steady/weak. Butts were steady to 3 cents lower. Hams traded steady on the day as did bellies. The cutbacks in slaughter seem to have brought processing items more in line with demand this week, but fresh cuts are still struggling. We could see loins and butts come into better balance next week since there are no major packers scheduling slaughter for Saturday, but demand at retail is very lackluster.

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Written by Robin Fuller. For more information or trading ideas about this market, Please contact us at (312)896- 2001 or email us at sales@linngroup.com.