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Ranchers.net

LIVE CATTLE

Live cattle futures drifted lower on Thursday with the front month Dec closing near its session low. While no technical damage was sustained, it appears the down trend will remain intact. A few thousand cattle traded in TX on Thursday at lower money, 92.5 as reported by the USDA. No trading was reported in KS and NE. The wholesale beef appears to be running out of gas which is not a positive sign for the bullish trader or feedlot owner/operator. Beef packers, who continue to operate at poor margins, are looking for a path to profitability. If they can't achieve this through higher beef prices, they WILL eventually achieve positive margins through lower cash bids. I'm expecting the latter. Most of my hedgers are short the Dec, Feb and Apr. However, the fact that several of my hedgers are not "short one cow" underscores the bullish attitude that prevails in the country. These attitudes contribute to heavy weight cattle. Currently average dressed cattle weights are running well above last year and record large. The cattle-on-feed should show active placements during Oct and I believe will be negative to the board next week. My spec trade is short the Dec with stops at 9620, short a few Feb and short Jan feeders with a stop at 10990. My opening call is mixed to lower.

If you're not currently satisfied with your trading results and your brokerage relationship, I invite you to give me a call or send and email to explore what full service brokerage can do for you. 877.377.7905 [email protected] .

Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. The views and opinions expressed in this letter are those of the author and do not reflect the views of ADM Investor Services, Inc. or its staff. The information provided is designed to assist in your analysis and evaluation of the futures and options markets. However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to ADMIS. Copyright © ADM Investor Services, Inc.
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