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Live Cattle Futures At Six Year Low"s


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Fresh lows were made in the live cattle market today. Early green screens quickly turned red as new lows were made once again. A weekly close below 102.92 will mark the sixth time since the week ending August 12th a new weekly low was made. In other words, a new low was made 6 of the last ten weeks. The negative basis seen on Friday’s close has quickly gone positive-the basis just refuses to turn negative. Dec LC settled at 99.10, roughly $3 below the bulk of last week’s cash sales, October settled at 97.50, $4.50 below last week’s cash. The premium seen in Feb/April contracts will likely draw little interest. Market participants appear-at the moment- to believe this week’s cash sales will trade below $100 for the first time since late November 2010. A weekly close below 97.42 could lead to further down side pressure. Boxed beef cutout values are mixed, choice 184.27, up .22, select 173.71 down 1.15. Despite showlists being lower the past two weeks, large supplies remain a concern for producers. U.S beef production last week climbed to 505.1 million pounds, up 7.7% from this time in 2015, as 9.6% more cattle were slaughtered, according to the USDA. Some remain skeptical that the recent drop in beef prices will be enough to attract new buyers, pork and poultry are both likely to set production records, leaving a glut of cheaper protein options. To put in perspective, compare today’s $184.27 per hundred pounds for choice-grade cuts to the $72.01 retailers can pay for pork at the wholesale level.

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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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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