After a choppy early trade in cattle, I’m expecting another lower close.

Filed in Gold by on May 13, 2010 0 Comments

LEAN HOGS Lean hog futures closed slightly higher on Wed with another late flurry lifting June futures to resistance at 8600. The contract, however, quickly set back from resistance and is trading flat to lower in the early electronic trading action today. It appears that pork packers are in the process of breaking the cash. Evidently they’re experiencing a peak in demand for product which is actually normal for this time of year. Packers have been cutting back on the kills in an attempt to improve their margins. This has been successful in that product remains firm and they have brought the cash down. I’m expecting futures to test major support levels in the next few sessions. LIVE CATTLE Live cattle futures stumbled hard yesterday and closed on their session lows. While major technical damage has not been sustained, yet, another poor performance will likely begin to turn the chart pattern bearish. Several of the deferred live cattle contracts, on Tuesday, scored fresh contract highs. However, by midsession yesterday it became evident the market was experiencing a lack of upside follow through and the trade turned sellers. Cash trading occurred yesterday at $1.00 in TX which proved to be a disappointment compared to expectations of $1.01 to $1.02 on Monday. When beef packers came out with a $1.00 bid on Monday morning, most feedlots in the South fully expected to receive higher money for their cattle. I’m expecting a seasonal top and have been positioning my hedge clients accordingly. I’ve not been trading live cattle from the short side yet, from a speculative standpoint. We closed out the last of our speculative length late last week and early this week. After chopping in the early action I’m expecting another lower close today. If

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After a choppy early trade in cattle, I’m expecting another lower close.

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