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In Case You Missed It--Six week review Of The Live Cattle MKT


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Live cattle futures have made fresh lows for the fourth straight session. In a chart pattern that is eerily similar to the one which began on August 31. However, longs were a bit more optimistic at that stage of the game. The Dec LC made a high of 109.90 on August 31 before closing at 107.97. What followed was three more consecutive lower closes (with the second being the first of 3 fresh lows), before the market stabilized. This was a steep decline in which the market lost 8.50 (Aug 31/ high to Sept 6 close). At this point many thought, “ok this is it”, meaning the bottom is in. The following two weeks consisted of choppy, volatile trade in which the market grinded higher, and looked to test that August 31 high. A double top formed on September 22nd, and the market headed back down. Now, as the market was heading lower, focus turned to the September 6 low of 101.27. Seriously tested once on September 28th, the market bounced before slamming through it to close out September just above 100.00. October began with a sub 100.00 close before bouncing back and breaking once again, off the double top (103.80) formed Monday. Three sessions later, and we’re at new lows (6 year) once again. Each of the several times the market came off of new lows only to come back and make new ones, was a bigger punch in the gut then the time before. Producers are numb at this point, and optimism is long out the window. Cash sales have been light this week. light sales were seen in the Texas panhandle and Kansas at 98.00 (4.00 Lower). Limited sales have been seen in the Western Cornbelt, unevenly steady from 95.00 to 96.00. The Dec LC weekly chart appears bearish; the 96.17 close is well below the first support level of 99.94. S2 is 96.58, followed by S3 92.03. The weekly RSI is 29.1, and is approaching oversold levels. I’m probably way off, but if I had to guess how tomorrow will play out, (not a trade recommendation!!!!!!!) I would say, a sharply lower open followed by a slight recovery about 20/30 minutes in (still red however) followed by new lows, a weak bounce, choppy trade with a test of early lows, and a rally with about a half an hour left in the session to finish with triple digit gains. Sounds crazy, but no crazier than this market has been trading.

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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