This article is brought to you by:

MARGRAF ON THE MARKETS

27253 Timberlane,
Monee, Illinois

(May 8, 1997) FEEDER CATTLE: HIGHLIGHTS--Week-to-week cash trends continue upwards: 600-1,000 lb. feeder steers up $1-$4; 600-950 lb. feeder heifers up $3-$4. Aug. feeder futures have been regularly establishing new contract highs since penetrating the 75.35-75.42 double top resistance on 4/22.

Technical Analyses 

Trends             				Futures
Long-Term 		Up   			Close             76.42
                              	                  [5-day change = -0.05]
Intermediate   		Up   			Resistance        77.10
Short-Term     		Up   			Support    76.35, 75.57,
                              				   74.95, 72.85
FUNDAMENTALS--BULLISH: The CME feeder cattle index continues to rise mid-March 1997, unlike to the weakening seasonal patterns of 1992-94-95-96. After a period of losses recently, Great Plains operators are at the break-even level, with further easing of corn prices projecting profits are ahead. Winter cattle (Dec. and Feb.) have positive and improving feeding margins.

FUNDAMENTALS--BEARISH: Feeder cattle may be considered only an input into cattle production, together with feed, labor, etc. Slow current demand is pressuring Apr. and Jun. live cattle on every rally. This pattern could persist through the next 2-3 quarters, changing the present outlook. A "triple top" has been established in the nearby June future.

RECOMMENDATIONS--POSITION RECAP: Long at 75.30 on 4/22 breakout; added at 76.00 on 4/28 breakout; added at 77.00 per rec. on 5/6. NEW: Buy/add at 76.35--oco--77.40-stop. Exit at first signal (trailing stop, parabolic or Margraf Exit Rule #2).

Ernest Margraf

Consensus National Futures and Financial On Line Index
Livestock Index

Added to the WWW 05-10-97
Last updated on 05-30-97

Hosted by:
One Crossroads Place
610 West Maple Ave, Suite WWW
Independence, MO 64050
(816) 252-4080
sysop@kcmo.com

wmeubank@ocp.kcmo.com