wmeubank@ocp.kcmo.com
COMMODITY REVIEW AND OUTLOOK
195 Route 6A, Suite 6, Orleans, Massachusetts
(October 23, 1997) CATTLE: SHORT TERM–Improved cash markets and active trade helped rally the cattle. Boxed beef prices were also encouraging. Some traders are now looking for an even further improvement in the cash market. For the near term, supplies are expected to be on the tight side. While the market has had trouble holding gains, we are moving into the winter storm period when cold and ice make it difficult for cattle to maintain weight and for producers to bring them to market. Look for the market to begin to price in a winter weather premium in the near future.
RESISTANCE–Resistance basis Dec. lies near 6780, 6825, 6850-6875, 6890, 6930 or so.
SUPPORT–Support basis Dec. lies near 6700, 6600, 6550-6525.
RECOMMENDATION–The Dec. chart suggests a bottom may be in place. Traders might continue buy Dec. cattle in the mid-upper 6600's with stops of 100 points or under 6545. Look for a test of the mid 6800's, although selling in the 6770 area may be fairly strong. There is the potential for a move to near 7000. Option traders might buy Dec. calls for a move to near 7000. Long term players could consider buying the April cattle at current levels with stops of 100-150 points. Objective is open.
M. Steven Morgan
Added to the WWW 10-24-97
Last updated on 10-25-97
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