ING DERIVATIVES CLEARING
209 South LaSalle, Chicago, Illinois
(October 31, 1997) CATTLE: WEATHER TIGHTENS SUPPLY/WEIGHTS–$70.00 cash cattle prices. Not bad. Part of it due to a freak storm that wiped out 20,000 head of cattle in Kansas with an unknown quantity in Colorado and not many in Nebraska. However, the retailers also absorbed a fair amount of beef price increases needed to help pay up for those live supplies. We admit to a bit of a conundrum here; after the weather situation clears; after the feedlots come back to normal; after the retailer looks to poultry and hams for holiday features, beef demand should trail off. Also numbers will remain fairly large through November at least and high pork production and cheap prices there will compete well. Export demand disappointing and the E-Coli trouble still in the press. We have held to one more good drop in the live/futures into November to get things on equal footing. Our prices leaned to $65.00 and below both live and December futures. However, December already at a $3.00 discount to cash and we may start to build in support from looks like much lower October placements, and trending that way for awhile. Therefore, near term we're light sellers of December in the $67.00 area with a tight leash on stops.
John W. Kleist
Commodity Consultant
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