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Cattle Complex Gets A Bounce


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After four consecutive down days, live cattle futures ended the day with a green screen. The end of week profit taking should come as no surprise and I don’t perceive traders eager to pile on the long side of the market. New lows were made this week and few, if any, are bold enough to call this “the one”-that game got old a long time ago-. The Dec weekly chart still appears weak, and each new low is being followed by weaker rally attempts. The sub 100.00 close on October 3rd was followed by a lethargic 3.80 move to the upside (103.80), before posting the lowest close of the contract life (96.10) Yesterday. Cash sales were at a standstill on Friday. For Thursday, trading and demand in the Texas Panhandle was moderate. Compared to last week live sales sold $4.00 lower at 98.00. Kansas saw moderate sales at 98.00. In the Western Cornbelt light sales were seen on Wednesday from 95.00/96.00. It appears many sellers asking 100.00, passed on packer bids and will carry cattle into next week. Net sales of 12,000 MT for 2016 were down 28% from the previous week and 6% from the prior 4-week average. 2016 beef production has reached levels not seen since 2013 and strong exports are going to be needed in order to absorb increasing production.

Front month feeders came off triple digit gains but still managed to close positive for the first time this week. I doubt today’s action will spark any serious buying interest; considering corn was up as much as nine cents today, and more importantly, Nov FC closed at its lowest level just yesterday, and today’s close was less than .70 above that level. The feeder market is being dictated by the fats, run up in the fat’s and the feeders will follow, continued downward pressure and, you guessed it. It was a whipsaw week in the corn market with prices eventually breaking out to the upside on big volume buying. The USDA was out mid-week without much in the way of major surprises. The market had been rallying ahead of the report, but reversed post –report to close that day with sizeable losses. That was the end of the price weakness for the week, however, and Dec corn finished today 16 cents off the post-report low.

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.

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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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