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THE WINDY CITY TRADER
P.O. Box 673,
Chicago, Illinois
(June 10, 1997) LIVESTOCK: The August live cattle should be nearing a bottom. Weak cash markets caused by slow demand have hindered prices. Normally the period prior to Memorial Day weekend creates huge demand and a strong seasonal move through the Fourth of July weekend. However, we did not see much barbecue activity with temperatures in the 30s. Recent warmer temps and good technical support at 6200 should help this market. With a low feeder cattle inventory we feel that we are near a bottom. Look for a break to 6200 basis August for a potential buying opportunity. Pork seems to be a victim of the "show me" mentality. Exports are expected to increase dramatically this year. This has not happened yet so traders push the market lower. With no other news on the immediate horizon, look for July hogs to trade between 7900 and 8200. The first hint of exports to Japan will probably generate 2 to 3 limit up days so a call option for August could be the way to trade this market.
Stephen Connell and William Frejlich
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