IRA EPSTEIN & COMPANY
223 West Jackson, 7th Floor, Chicago, Illinois
312-207-1800(March 28, 2000) CATTLE: Live and feeder cattle futures made a glorious rebound last week as bullish February Cattle Marketings data in the seven state area, heavy cash cattle trade and a boxed beef market that has been held onto its gains boosted the markets. Much of last week's action also included rolling of April live cattle into the June contract ahead of the April delivery period.
With the light trade in the cash cattle market the previous week, many traders started the week with expectations that packers would come in buying early in the week at the $72.00 level. By Wednesday, Light Choice Boxed Beef prices had held the $120.00 level and packers were able to raise their cash bids in the central and southern plains to the $73.00 level! The heavy cash cattle trade at the $73.00 level enabled the April live cattle futures to challenge the January contract high at $73.50. The April live cattle traded a high of $73.40 and established what many technicians consider a triple top. I look for that triple top to be taken out during the next week if the demand for boxed beef can continue at this pace.
The USDA reported that for the week ended March 23rd, cash trade was heavy. Not a surprise considering the light volume of trade the previous week. Amarillo, TX reported week-to-date sales of 171,000 head at $72.00 to mostly $73.00. 50,300 were reported as formulated. Dodge City, KS reported week-to-date sales of 134,200 head at mostly $73.00. 30,000 of those were reported as either previously contracted or formulated. Kearney, NE reported week-to-date sales of 150,800 head at mostly $116.00 on a dressed basis.
Boxed Beef values soared last week. At mid-day Friday Light Choice was at $120.82. Heavy Choice was at $120.85. Light Select was at $114.58 and Heavy Select was at $115.15.
RECOMMENDATIONS--I still see no indication of a slowdown in demand at this time. Buy June live cattle at $68.80. Also, on rallies, look to buy the June $69.00 put options at $1.00 o.b.
Les Jones
Hosted by:
CONSENSUS, INC. AND INVESTORS
CO-OP
1737 McGee
Kansas City, MO 64108
(816) 471-3862
editor@consensus-inc.com