AG SERVICES
201 Innsdale Terrace, Clovis, New Mexico
505-769-3300(March 16, 2000) CATTLE: Cash cattle trade has not developed this week, but rumors are that cash could trade at $72 and as high as $73. Although fed cattle numbers are ample in the southern Plains, feed yards in Kansas and Nebraska are reportedly in good shape for another two to three weeks. This means that there may be some time left in which tighter supplies may help to support cash cattle prices. The strength we've seen in cash beef prices over the last couple of weeks has not spilled over into the cash or futures markets. This has been somewhat of a disappointment to many cattle feeders and many analysts are calling for a top in beef prices around these levels. Over the next 30-60 days we expect to see the market begin to trade lower as seasonal charts turn down into late May/June. There is still the argument that seasonal demand will offset any pressure on prices as we get into April? Fundamentally, beef prices would need to remain at current levels and demand remain strong enough to overcome excessive tonnage expected to hit the market. Calves placed late last Fall are expected to add pressure as these cattle should begin to show up in April and continue into late May or early June. Most of the pressure is expected to be seen in the June live cattle prices. Technically, April live cattle failed to trade above the old high of 73.50 this week which has been major resistance. There could be a possibility of this happening if cash cattle can bring $73 this week? With long-term trends still up, higher cash prices this week would lead the majority of traders to expect higher cash prices next week. Short-term trends will turn down this week if April live cattle close below the $72 level. A close below $72 on our daily charts would project prices back towards the $69.75 area? The entire meat complex is pushing the high side at this time. Most indicators are signaling that prices are extremely "overbought" again at these levels. We would look for a correction over the near term. Seasonal strength during early April may still take place, but we're overall negative on price action until we get past the late May/early June time frames?
SHORT-TERM TRENDS--Sideways to lower.
LONG-TERM TRENDS--Sideways to lower?
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