wmeubank@ocp.kcmo.com
COMMODITY REVIEW AND OUTLOOK
195 Route 6A, Suite 6, Orleans, Massachusetts
(November 18, 1997) CATTLE: SHORT TERM–Weaker cash markets continue to pressure the cattle. Some traders expect cash to put in a near-term low, as retailers being buying in advance of the holiday season. The prospect of increased weather problems may encourage the market to begin to price in some sort of winter weather premium. Seasonals suggest higher prices.
RESISTANCE–Resistance basis December lies near 6780, 6825, 6850-6875, 6890, 6930 or so.
SUPPORT–Support basis December lies near 6700, 6647, 6600, 6550-6525.
RECOMMENDATION–Support in the 6600's appears to be substantial, and may encourage buying. However, selling on rallies has been aggressive. We need to see December cattle take out 6795 in a convincing manner to suggest a near-term low is in and a rally is under way. Aggressive traders might sell December cattle in the mid-low 6700's with stops of 100 points or under 6795. If 6795 is convincingly taken out, it implies a test of at least the mid 6800's, but there is the potential for a move to near 7000. Traders might consider reversing to the long side if that penetration occurs. Long-term players could consider buying the April cattle at current levels with stops of 100-150 points. Objective is open.
M. Steven Morgan
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