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July 6, 2001
MARKETING
By Bryce Myrick
Director, TFB Agricultural
Marketing Education
As we enter the heat of summer, fat cattle are selling for $72 cash. This is down from the $81 range in early April. The question is, "what will be the price of fat cattle and feeders in late summer and fall?"
The June, Cattle on Feed Report said May placements
were 13 percent higher than the three year average. Although this looks
bearish for fat cattle prices, what effect will it have on feeder replacements
for the future? When we look at October Live Feeder Cattle trading at
$91.20, my concern is, will these feeder prices be able to hold if packers
are able to use big placement numbers to pull down cash prices? This may
cause feeder cattle prices to move lower.
When we consider all the factors that effect feeder prices, it appears
there is more downside risk than there is upside potential. Hedging fall
feeders may be a prudent market decision.
To set up workshops or for help with your hedging needs, call 254-751-2242 or 915-698-0355 or e-mail: bbmyrick@swconnect.com.
OCTOBER - FEEDER CATTLE
Fundamentals:
Cheap feed - Strong demand
Technical Analysis: Trend - Up / Resistance
- 91.45/ Support - 90.10
OCTOBER - LIVE CATTLE
Fundamentals:
Big on feed placements - Exports good
Technical Analysis: Trend - Sideways / Resistance
- 76.30 / Support - 74.40
DECEMBER - COTTON
Fundamentals:
Weak domestic consumption - Increased world production
Technical Analysis: Trend - Down / Resistance
- 46.80/ Support - 42.00
SEPTEMBER - RICE
Fundamentals:
World ending stocks continue to rise
Technical Analysis: Trend - Sideways / Resistance
5.80 / Support - 5.30
