wmeubank@ocp.kcmo.com
GLOBAL ASSET MANAGEMENT
575 W. Madison, Ste. 2607, Chicago, Illinois
(November 26, 1997) CATTLE: Cattle futures tried to breakout upside of sideways range it has maintained between $66.00 to $68.00, but it could not hold it as the market fell back into the range when as the charge above the resistance area was not strong enough to spark a positive turn in the fundamentals. The cash market appears that it will be steady at $67.00 again this week, buy as of this writing only light trade had taken place. The boxed beef markets were mostly lower for the better part of the week as retailers balked at last week's price rise and held out for lower money. Look for the product market to steady next week as post-Thanksgiving purchases should firm price next week. Overall, market internals are mixed as the weaker beef market seems to have capped the price advance in the futures. The one wildcard for the market could be decent demand in December which could possibly help ease an expected rise production. The latest Cattle-On-Feed report reared no surprises as all of the figures were basically in line with early estimates. It showed that on-feed numbers remain large, but with strong marketing's expected to continue the move through large supplies should not pressure the market all that much. Technically, December live cattle are in a downtrend; the trend would turn back up on a close above $68.05.
FUTURES STRATEGY–Long LCZ from $66.50. Long second unit at $68.12. If given the chance, liquidate the position at $68.30. Maintain protective sell stop, close only at $65.05.
OPTION STRATEGY–Short LCZ $66.00 puts at $1.10.Maintain a protective buy stop at $2.25.
Tony Montini
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