Mid Day Cattle Comment

April 10, 2015 Live Cattle: So far, only the April contract has set a new low from Monday's high. The June is only $.05 from a new low and the remainder of the months between $.20 and $.40. If June were to trade under $150.20, this will suggest that minor waves 1 & 2 are complete and minor wave 3 is in progress. Downside target for the minor wave 3 measures to $144.50. Although difficult to see, the June did gap down this morning. It was not by enough to clear yesterday's low, but it will show up on the candlestick chart as a gap down. This is anticipated to be a tough decline to overcome for futures. Previously, the futures were attempting to catch the cash, now it is anticipated that cash will turn and run towards the futures. Feeder Cattle: Now there are a multitude of articles and comments suggesting the profit margins, or the non-existence of, may be curtailing some of the buying. I understand that if you are going to be in the cattle business, you have to own or trade cattle. However, business is about making money or keeping from losing money. When the appearance of margins are thin, it would lead one to perceive that there is little room for risk. The futures being the fastest way to curtail that risk suggests to anticipate some acceleration in selling as the past 4 weeks is perceived to have marketed the bulk of the spring inventory. If producers are able to keep the recently purchased lighter weight cattle on pasture or programs, the bulk of inventory now coming to market is anticipated to be heavier, at a lower price, and therefore beginning to turn the feeder cattle index. All feeder cattle contract months have set a new low in this decline from Monday's high. This leads me to confirm the termination of a minor wave 1 & 2 and the beginning of minor wave 3. Downside target for the minor wave 3 basis August is $203.76. Up trend lines are being broken. Previous highs are being overlapped. Technical indicators are turned south. My analysis suggests the major wave B is or is nearly complete. This leads me to anticipate a major wave C decline that will be anticipated to be of equal length of the major wave A. Basis May, if you subtract the price width of the wave A, $43.57, from the high of the major wave B, $220.87, it produces a downside target to $177.30. In a simple zig zagcorrection, waves A and C are anticipated to be like in price width within the same magnitude of the wave count. Although the premiums on the recommended options below continue to increase, I perceive these still the most advantageous. I recommend buying the August $2.12 puts, and the October $210.00 puts. ***This is a sales solicitation.*** Corn: Corn is perceived completing a multi month, complex, correction. With the initial move, prior to the formation, having been a rally, I anticipate the break out to come to the upside