wmeubank@ocp.kcmo.com
COMMODITY RESOURCE CORPORATION
P.O. Box 8700, Incline Village, Nevada
(December 11, 1997) CATTLE: OUTLOOK: I still believe the cattle market is not as bearish as the majority seem to think. The cow slaughter should have peaked and the number of cows coming to market in the next few months should fall. Then there's the historically reliable seasonal tendency I mentioned last week. If a speculator had purchased April live cattle futures on second Monday after Thanksgiving (this year December 8th), and sold the ninth Thursday after this date (this year February 5th), he would make money most years. My research shows he would have profited 11 of the past 15 years. The average profit was over $1000 per contract, with a peak of over $3000. If a 2¢ stop was used ($800/contract) the stop was only hit 2 times in 15 years. Once again, I repeat, there is risk in any futures trade and no sure things, if you are going to play, you might as well play the odds.
STRATEGY–FEEDERS: Current futures price levels still appear oversold to me, and I do not recommend hedge protection at this time.
COW/CALF OPERATORS: We are out of all short feeder futures. The trend in the feeders remains up for now due to stagnant feed prices.
TRADERS: If you took last week's recommendation you are long April live cattle futures from the open on December 8th. This was 7130. Risk 200 points. We anticipate holding until the February 5th of next year to take advantage of the seasonal.
George Kleinman
Hogs
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Cattle
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