AG SERVICES
201 Innsdale Terrace, Clovis, New Mexico
505-769-3300(March 30, 2000) FEEDER CATTLE: Cash feeders are still holding tough even with futures prices falling. Futures prices have begun to sell-off again, but sale barn receipts haven't shown much weakness. Technically, prices are still poised for a correction back down. Support levels range between $81.00, $80.00 and then down around $78-79. If feeders can reach levels which can attract buying interest from cattle feeders, then prices should hold and begin to trend higher. There basically has been no trend over the last three months. Since highs were made back in January, price have consolidated with little buying or selling interest. A short-term break would be healthy for the overall market. This would create some opportunities to feed cattle and should generate enough new buying back into the market to take prices to possibly new highs. Most cattle buyers around the country are still telling us that there are still no significant cattle numbers anywhere. The USDA numbers are telling us that the numbers are out there somewhere. A significant drop in cattle outside the feed yard would set the stage for possibly a huge move up, but it may be later into the year before rumors become fact. By then, it may be too late for anyone looking for a bargain. Aside from getting too "bullish" too early, hedgers should be ready to either cover their topside with calls or be in position to offset a portion of their hedges as the market dictates later on in the year.
SHORT-TERM TRENDS--Down
LONG-TERM TRENDS--Sideways to lower.
Bryon Fillpot
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