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Limit Losses In Cattle Complex


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The Cattle Complex gave back all gains made last week, and once again market participants who felt a bottom was cemented in are now saying to themselves, “not again”. Both the October and December contracts finished the day down the 300 point limit, while the differed months were able to come off limits to settle with sharp triple digit losses. Aside from last Monday’s 99.90 close, when the 98.90 contract low was made, today’s 100.05 close (Dec) marks the second lowest close of the contract. The Oct contract settled at 98.87, 3.03 below the bulk of last week’s cash trade. Boxed beef prices tend to pick up in October. Last week saw the lowest box prices in three years. Showlists are lower for the second week, which would indicate long awaited tightness of fed cattle supplies are upon us. However today’s market action may have some questioning just how tight supplies actually are. 600+ kill week’s continue to pressure the market, and has beef production numbers running over the 5-year average for the past 8 weeks. The fact that supplies haven’t been depleted as much as anticipated, could be an indication that expansion numbers could have been understated. November FC traded down to 118.37, 27 points off last week’s contract low, before settling at 120.02, down 2.75 for the session.

Marketing conditions have improved in recent weeks and being prepared with a marketing plan will allow you to take fullest advantage of prices and maximize the value received for your calves.

Call Mike for a free consultation 312 483-2186.

Below is a list of people who I feel could benefit from the services provided at Long Leaf Trading Group:

*Individuals or firms with intentions of selling cash (physical) livestock or grain at some point in the future

*Potential sellers of livestock and grain products who are primarily concerned about falling prices in their local markets

*Those that are holding inventory and would be exposed to the risk of falling prices which would have a negative effect on their inventory value and profit margins

*Individuals who have intentions of buying cash (physical) livestock and grain products in the future and are concerned about rising prices which would also have a negative impact on their profitability.

If you would like to hear some of my trade recommendations or have any questions regarding the markets please feel free to give me a call. Also if you would like to see how the various accounts we offer are performing in these turbulent market conditions, please contact me at312.483.2186 or toll-free 866.372.1014 or via email at mbauer@longleaftrading.com.

RISK DISCLAIMER: There is a significant risk of loss in trading commodities. Past performance is not necessarily indicative of future results. Only risk capital should be used. Losses from commodity investments may be greater than the initial investment(s). Commodity trading is not appropriate for all investors, and a commodity investment must be evaluated in light of the potential for risk of loss as well as the possibility of profit. Please contact your account representative for more information on these risks.

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About the author


Mike started his career at the CME in 1987, working as a runner during summer breaks while attending the University of Illinois. After College, Michael began his career in commodities with Refco before moving on to RJ Obrien, where he became manager of RJ O’ Brien’s New York Order Desk. Michael has knowledge in all commodity sectors but focuses primarily in the Agricultural & Livestock Markets. He feels a good blend between fundamentals and technical aspects contribute to being a successful trader. Please contact Michael at (312) 483-2186 or mbauer@longleaftrading.com

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