wmeubank@ocp.kcmo.com
FEEDER CATTLE
COMMODITY REVIEW AND OUTLOOK
195 Route 6A, Suite 6, Orleans, Massachusetts
(July 2, 1997) FEEDER CATTLE: Demand for feeders continues to support the cattle market in general and feeders in particular. Commercial buying appeared based on ideas that feeder demand will remain strong, with tight supplies and low feed costs. Buyers are apparently concerned that feeders will not be available later in the year. Seasonals are strongly in support of higher prices. However, recent action suggests that buying the breaks is the way to go.
RECOMMENDATION–Feeders are thinly traded, so profit taking can easily make itself felt, as we've seen in the past couple days. Aggressive traders might continue to buy August feeders at current levels or on 50-100 point dips. Longer- term traders might buy the October feeders on dips of 50 or so points. Use stops of 100-200 points. Objective is new highs. Option traders should buy October calls.
M. Steven Morgan
Added to the WWW 07-04-97
Last updated on 07-04-97
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