wmeubank@ocp.kcmo.com
COMMODITY REVIEW AND OUTLOOK
195 Route 6A, Suite 6, Orleans, Massachusetts
(August 20, 1997) CATTLE: Fund selling and commercial buying were the primary features of the cattle market. There are expectations that the cash markets will improve later this week, but Friday's cattle on feed report suggested that October and December cattle are holding too large a premium to the cash market. It may be difficult for cattle to have a sustained rally at this time. Funds are suspected to be long, so a negative hanging over the market is the potential for fund liquidation.
RECOMMENDATION–Very aggressive short-term traders might consider buying October cattle in the mid-upper 6800's with stops of 50-100 points or under 6840, looking for a rally to the upper 6900's, lower 7000's. Traders could also consider reversing in that area with 50-100 point stops or over 7145. Support lies near 6862, the 6840's, and 6790. Resistance may appear near 6920, 6940 and 6960. Aggressive traders might sell on a test of the mid-upper 6900's, looking for a break back to the low-mid 6800's. Option traders should consider October or December puts on rallies.
M. Steven Morgan
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Last updated on 08-23-97
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