COMMODITY REVIEW AND OUTLOOK
195 Route 6A, Suite 6, Orleans, Massachusetts
(October 29, 1997) FEEDER CATTLE: SHORT TERM–The winter storm that is supportive to the live cattle is bearish to the feeders in that demand falls off dramatically. Who wants to feed cattle in the midst of a blizzard or its muddy aftermath? The potential for higher corn prices is a long-term negative.
RESISTANCE–Resistance basis November remains near 7835, 7950 or so, 8050-8065, 8110.
SUPPORT–Support basis November is near 7760-7780, 7700, 7635, 7615.
RECOMMENDATION–The recent failure to hold highs is giving the chart a negative aspect, as is the decline in open interest on the rally. However, support in the 7750 area may encourage buying, and overall the chart is suggestive of a bottom. Aggressive traders could buy November feeders on dips into the mid-low 7700's with stops under 7640 or 50-100 points. Look for a rally to near 8000. Be alert for problems if corn continues its rally. Option traders could buy calls, as there is the potential for a good move, especially if corn stalls out.
M. Steven Morgan
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Last updated on 11-01-97
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