wmeubank@ocp.kcmo.com
R.J. O'BRIEN & ASSOCIATES, INC.
555 W. Jackson Blvd, Chicago, Illinois, 60601
(November 13, 1997) CATTLE: PRICED RIGHT?–Fat cattle prices have moved around quite a bit it seems, but December futures have locked in a trading affair for a few months. The past weather problems resulted in $70.00 tops in the Southern Plains, but as we speak, prices back down to the $67.00 area on the low end. All the while, December cattle has drifted choppily sideways. Beef demand also seasonally poor in here and in fact the boxed beef market has been coming down. Our basic premise was that we'd see one more good down in the live and futures to the $65.00 area, but the problem may be that even if the live does it, it's late enough in the game that the December turns premium, rather than the current discount. Another way of looking at it, as boring as it is, is that maybe the December's been priced right. We've been lightly short and only grudgingly gaining some ground. Lower highs and lower lows for the move. Our longer-term opinions have been more friendly though and we look for better things through the end of the year. Therefore, we may have to sit for a while, keep a tight leash on shorts and buy when the December/February settles over their 45-50 day moving averages.
John W. Kleist
Commodity Consultant
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