wmeubank@ocp.kcmo.com
GLOBAL ASSET MANAGEMENT
575 W. Madison, Ste. 2607, Chicago, Illinois
(November 13, 1997) CATTLE: Cattle futures continued to be fixed in the sideways range it has maintained between $66.00 to $68.00 again this week. The cash market was $1.00 lower as active trade took place at $68.00 which helped packers gain a slight edge margin wise. The boxed beef markets were mixed to weak again as all activity took place at lower money. The retailers seemed a bit hesitant to make large purchases at steady money, but once price action weakened there was large volume. Overall, market internals are mixed as the weaker cash and beef markets have kept a cap on futures markets. The one thing that could turn it all in the near term, is the tight supplies, especially if bad weather develops again in the cattle feeding belt. Market volatility could pick up near-term with the upcoming November Cattle-On-Feed release as early estimates still point to a large quantity of cattle on feed. but placements are expected to be below a year ago and marketings are expected to be at least 13% over a year ago. Technically, December live cattle are in a downtrend; the trend would turn back up on a close above $67.95.
FUTURES STRATEGY–Long LCZ from $66.50; maintain a protective sell stop close only +$65.05. Add a second unit at $68.12 stop.
OPTION STRATEGY–Short LCZ $66.00 puts at $1.10; maintain a protective buy stop at $2.25.
Tony Montini
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