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Livestock Recap


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After making it’s high for the move last week, the live cattle rally has appeared to have run out of steam for the moment. Despite favorable cash news last week, the market ended up nearly $5.00 off of it’s 113.22 high. This week’s choppy trade failed to define any clear future market direction. Today’s inside candle indicates traders uncertainty and this week’s lower cash trade certainly wouldn’t be seen as friendly however, today’s close above the 100 day MA (109.69) and 110.38 pivot point warrant attention. Next week’s arctic blast also could add support. Supply and demand projections for the recently completed U.S. corn, soybean and wheat harvests were largely unchanged in Friday’s USDA monthly report, which disappointed soybean traders who were looking for a reduction in supplies.

The 2016 forecast of total red meat and poultry production is raised from last month as higher forecast beef production offsets lower poultry and pork production.

  • Beef production is raised on the current pace of slaughter.
  • Beef production is forecast lower, reflecting lower expectations for cattle placements in late 2016. However, the ensuing decline in fed cattle slaughter will be slightly offset by higher expected cow slaughter.
  • The beef import forecast is raised for 2016 based on the recent pace of trade, but is unchanged for 2017. Beef exports are raised for 2016, reflecting stronger export demand, but are unchanged for 2017.
  • Cattle prices are forecast higher for the remainder of 2016 and through the first half of 2017 as demand has improved and is expected to carry into early 2017.
  • USDA will release its Quarterly Hogs and Pigs report on December 23 which will provide an indication of producer farrowing intentions into the first part of 2017.
  • Pork production is lowered due to counter-seasonally lighter-than-expected carcass weights this quarter.
  • Pork imports are lowered for 2016 and 2017 on recent trade data and the expected impact of forecast growth in production on import demand. Forecast pork exports for 2017 are unchanged.
  • Hog prices are unchanged.

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 inquire about our option selling program please contact me at 312.483.2186 or toll-free 866.372.1014 or via email at mbauer@longleaftrading.com.

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 inquire about our option selling program we offer in these turbulent market conditions, please contact me at 312.483.2186 or toll-free 866.372.1014 or via email at mbauer@longleaftrading.com.

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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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