wmeubank@ocp.kcmo.com
R.J. O'BRIEN & ASSOCIATES, INC.
555 W. Jackson Blvd., Chicago, Illinois
(December 18, 1997) CATTLE: AS EXPECTED–A while back we believed that even with a decline in the live market, December would stay premium and that at $67.00, the market was priced about right. Turned out to be reasonable. As far as the February was concerned, it was caught between the idea that supplies and weak seasonal demand would wrest the premium out if versus an improved after the first cash outlook. The main trouble we see is that currently we're backing up animals into a poor demand time frame (packer's cut back slaughters to firm up the beef...didn't work very well). And that there's plenty of pork and poultry competition ahead of the beef. Therefore, live and futures prices (February) may drift down to the $65.00-63.00 area before recovering. We're looking to buy the February in the $65.00 area for a trading turn near term. Consequently to sell a pop to $67.50, again near term.
John W. Kleist
Commodity Consultant
Hogs
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Cattle
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