Dressed cattle is the carcass-post slaughter but not boxed beef. The dressed beef is about .65 the weight value of live cattle; $81.50cwt/.65 =$125cwt for dressed cattle. Roughly speaking.
From a cash market perspective I have a hard time seeing that as a likely outcome. From a technical standpoint I am watching FC in a DeMark sell countdown(up), we are on day 5, buying usually exhausts itself on count of 13 closes higher than the close 2 days ago after 9 consecutive closes higher than the close 4 days ago. The Head and Shoulders top above should also prove to be resistance.
From a Cash Market point of view I agree but I don't trade the cash, I trade Futures. My technical viewpoint is partially laid out for you in the chart I posted. The next daily Resistance top is 119.750 and being we are in a Bull Trend both daily and intraday, I think it is safe to say that particular Trend will continue till it reverses and as of today there is no sign of a reversal. Consolidation yes but no reversal. I'm not predicting the price will go to 119.750 but that it will go up strongly till it reverses and that 119.750 is the target. That was my only reason for going long at 102.750 on the 5th of May and I still think it was a damn good reason. I had quite a few feedlot experts people tell me I was crazy for taking that position and it's funny that as we sit here over 113.00 none of those people voicing an opinion about my sanity are anywhere to be found. The beginning of May was a seasonal bottom and a technical bottom (for me) and just the most perfect set-up I've seen in a while. How far up this puppy will go is anyones guess but it is just that . . . a guess. I don't guess at any of my trades. I enter because I know I have a better than 95% of profiting because I am in the correct direction price is going at that particular moment based on (MY) trend and strength of market. I exit a position because the market has given me the heads-up that a top has set in and that particular top is a longer term reversal. So far the Market is still telling me it's going up. Personally I think the Futures will peter out around 117.900 but I'm a watch-and-see trader. I've found that predicting where any market will go is foolhardy. The only head and shoulders I'm concerned with in my trading is my head attached securely attached to my shoulders. I've seen patterns reverse all the time and the only thing consistent in any market is price. It never lets a trader down. Great Trading to you. Bill
Well, I don't want you to listen to feedlot experts since most don't know the first thing about running a profitable operation let alone trading futures. And we all trade the cash market if we trade futures-they are a reflection of each other and the basis has me concerned. All I know is that in my analysis there is no trade as of yet. I have trade setups triggering right now in corn, wheat and sugar but the next trade I do in cattle will be to the short side. This is uncharted territory for many in the industry and I know more than a few frustrated people considering getting out due to the difficulty in buying feeder cattle that make sense from a marketing standpoint. Luckily for us we also have a trend following fund that has been long FC.
traderaaa, thinking of long corn here? DEC/DEC or Long Jul 07 Short Dec 07 look interesting to me here. Worried about a Jun 30 USDA shocker, though
here is a blog I just wrote on corn and wheat. http://themoneyblogs.tradingmarkets.com/researchlab/my.blog/ Cattle and feedlot analysis is just a side job, quantitative trading is my real job.
It was announced this morning that Japan is lifting its US beef ban. I assume the markets knew this was coming as cattle has moved up 4-5 cents in the past week. Is this "buy the rumor, sell the fact" news or will cattle get more of a pop from this?
It means nothing to me. I don't know how to trade off it and I think it winds up being a nothing. Japan is important to the packers but means very little to cattle producers. I think the end result will be very little change.
It really isn't open yet.... http://barnhardt.biz/ here is a good blog post that describes the reality of the situation.