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Monday, August 24, 2015 AgriVisor Cattle Advice

 
Monday, August 24, 2015

Cash Analysis: As much as the pork industry is benefiting from its advantageous prices, the cattle are suffering, especially with the economic anxiety that has emerged in recent weeks.  At the $240-$250 level, beef simply remains too high to easily move into the retail channels.  And with economic difficulties dominating the environment, it’s perceived consumers will be even less likely to buy the most expensive meat.  Along with that, the marketing number on Friday’s C-O-F report was no better than expected, and 3% less than it was a year ago.  Ahead looms a slow, but steady, increase in the supply of market ready cattle.  Clearly, beef needs news to invigorate demand.  Nevertheless, we are not especially bearish cattle.  Still, with most of the Labor Day needs covered, cattle prices could slip a little the next couple of weeks.  Beyond that, an end to the current economic panic atmosphere would relieve some of the current negative economic sentiment.


Tech Comment: The break to new lows of the move, positioned Oct. to test its late February $141.27 low.  The downgap it had to start the day may have left a key element over the market that might offer some insight.  If it’s filled and prices don’t close under the old low, it would be a hint October is finally putting in a key low.  Seasonally, there is a tendency to be strong through the fall.  If Oct can close over the $143.15-$143.35 gap it left, it should position futures to return to $150 again, but that may not come until after October expires.  October feeders dropped last winter’s $195.00 low, dropping through last winter’s $193.00 low on the nearby chart, although it didn’t close under that mark.  But if it would turn up in the short term, it’s going to have a lot of difficulty with old support either side of $204.00. The crop under $215 on the cash index positioned it to slide toward $205.00.  It takes a move over $218.00 to turn the short term up again.


Live/wholesale prices: There was only a very limited trade Monday. Prices closed last week at $145-$148 live and $235 dressed. Choice beef closed at $244.31, -0.59, select at $233.98, -0.90.


Daily Cash Recommendation: ​E-Visor Premium Only


Feeder Recommendation: E-Visor Premium Only


Hedge/Option Recommendation: E-Visor Premium Only


Hedge/Option Position: E-Visor Premium Only

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