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Kevin Penner: Cattle trade seen dipping

pressures could combine with other sliding market influences to, again, allow a
lower cash cattle trade this week.  Last week, we saw a larger than
expected dip to $92 cwt and this week we expect steady prices at best and
possibly $90-91. Contributing factors to the direction of trade this week will
be the Futures Board and the Boxed Beef prices.
Last week we saw choppy trade at the CME Group that featured technical
key-reversals in both directions and large losses on Monday followed by large
gains on Friday. Such choppy action can indicate a Top on a commodity chart and
failure this week to Close above last Monday's High in Oct Cattle of $95.15
could support ideas of a Top being seen in this market for now.  Action on
the first trading day of August was strong at the Open, however, buying
momentum dried up and despite a 200+ point higher day on Wall St and gains in
most grain we closed lower for the day. This is not a good way to set the stage
for higher cash prices this week.
Boxed Beef prices have seen recent pressure as well. As packers are unable to
sell their finished product for more money they are not inclined to pay higher
prices for their inputs.  Slipping beef prices may have led to lower cash
cattle prices paid last week and with a report of both the Select and the
Choice beef down over $1.00 today we, again, are not setting the stage for
higher cash prices this week.
We have had no reported bids as of close of business on Monday and cattle are
being offered at $94 or better. Trade started last week in NE on Wednesday; we
look for similar action again this week.
Kevin H. Penner
Commodity Services, Inc.

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