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505-769-3300(November 24, 1999) CATTLE: No cash cattle trade so far this week, but odds are if the board stays strong, $71 may catch it? Showlists were small again this week which was expected by many analysts. Most predictions have been for cattle to remain current until we get into December. This analysis has been fairly accurate up until now. There are many traders still predicting that we'll see the December live cattle get back to the point where October live cattle went off the board around the $72.25 area before December cattle expire? We don't have any statistical information to verify whether this would be a very high probability or not, but we've noticed that many times this has happened in the past. Everyone is still talking about the "Y2K" buying...guess it's going to be a much bigger party than we had ever imagined? Beef prices continue to hold strong along with cash cattle prices. The fact that the market traded back up towards contract highs can be interpreted in one of two ways, since the market has failed to follow through (negative), but on the other hand, the fact that prices were able to trade back to this level (positive). Our long-term indicators (for hedgers) are very high percentage of being correct and are still telling us to hold short or sell some more! We realize that trends have turned back higher. We would not recommend speculators sell into an uptrend even though this situation is a rare occurrence (Y2K?). The last Cattle on Feed report caught everyone "off guard" with the largest cattle on feed number since 1992, but keep in mind that 32% of this number consisted of cattle weighing under 600 pounds. They didn't exactly put the market down limit on Monday. The December live cattle are sluggish at these levels and short-term indicators have tuned down once again? Anyone waiting for higher prices will probably have to wait until we get into December and see how prices act? Funds are still reportedly holding long and strong. Commercials on the other hand are reportedly short the market. Who will win in the end, it's hard to tell, but you've got to say one thing about this market, it still looks pretty impressive!
SHORT-TERM TREND--Short-term trends are down (December).
LONG-TERM TREND--Weekly charts are toppy?
Bryon Fillpot