Aug Feeder Cattle broke above a 1-2-3- bottom with some nice monentmun. Looking long to around 112. Trailing stops at around 10%. Sandor54...
series 7... Good call! I've read his book about 10yrs ago. And some of his insight has stuck with me. I think he's more of a book marketer then a trader. Sandor54...
The only problem I have with the feeder market is that feedlots are dealing with up to $200 per head losses on fat cattle, corn is relatively tight and could easily rally and there aren't many futures fungible feeder cattle in the county right now to lend cash market support. The Feeder/Live spread should correct but so far it has not and the losses continue to pile up for most cattle feeders.
How about that break above the #2point @ (106), thats a nice $1500 in a few days.... Sometimes it's best to keep it simple, he more complex it gets the less I make. Sandor54...
I am just looking at the market from the cash side of things from within the cattle feeding industry. I agree that there is a valid breakout that has been in effect for a week or so but I can't avoid the fact that feeder cattle derive their value from live cattle and I can't forsee any feedlot making money buying feeder cattle that are losing him hundreds of dollars per head. I think a stall out just under the head and shoulders top formation around $112 would be a likely outcome.
just wondering,what broker do you guys use? whats the best source for cash prices? do you guys only trade cattle or lean hogs/bellies also? thanks very much
You can get the cash index from the USDA market prices page and it is also quoted on DJ news wire. Feeder cattle is not a liquid market so using a good broker is probably a good idea. Stay away from the cheap discount high volume brokers and find someone who specializes in meats and ag products.
What is the basic spread idea that is being discussed here? What is the trade logic and the fundamental background to it?
In an earlier post I was referring to the feeder cattle/live cattle spread. Basically I am analyzing it from the cash market fundamentals, those being heavy losses for the past couple of months on the cattle feeding side, prospects for higher feed input prices and fundamentally overpriced feeder cattle relative to these factors. To correct the spread and bring industry profitability back into line the spread will have to decline with feeder cattle declining relative to live cattle. The option is feeder cattle remain where they are but live cattle rally a lot, which is unlikely given slaughter weights and the point we are at in the industry cycle.