wmeubank@ocp.kcmo.com
GLOBAL ASSET MANAGEMENT
575 W. Madison, Ste. 2607, Chicago, Illinois
(October 23, 1997) CATTLE: Cattle futures posted strong gains during the past week as higher cash cattle and boxed beef markets spark large gains. The cash market ended the week $2.00 to $3.00 higher as the packers were forced to pay $68.00 and $69.00 to get a decent supply. The boxed beef markets were steady to higher as it appears that retailers were a bit nervous also, which prompted them to pay higher to buy needed supplies. Overall, market internals have moved into a fairly strong state as it appears that the tighter supplies of fed cattle have helped spark higher prices. It appears fat cattle supplies will continue to tighten even further in the weeks to come, which should keep both the packers and retailers edgy in the near term and keep price activity firm. Technically, December cattle are in an uptrend; the trend would turn back down on a close below $67.05. LCZ now targets to $69.35 as long as close above $67.05 are maintained.
FUTURES STRATEGY–Long LCZ from $66.50. Maintain a protective sell stop close only to $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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Last updated on 10-25-97
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