Cattle Inventory numbers were released this afternoon from the USDA. Here are the official estimates.
All cattle and calves are estimated at 98%.
Calf crop at 97%.
Beef cows that have calved at 98%.
Beef replacement heifers at 102%.
Calves under 500 pounds at 98%.
Most numbers came out on the friendly side as expected. The real only stand was the replacement heifers for calving which was 4% higher than anticipated. This may be the signal that producers are holding back young females to rebuild the herd. These numbers are most likely already built into the futures and the trade will be very concerned about the falling wholesale beef prices. Negative packer margins also have been providing resistance. Cash cattle was not as high as most bullish traders would have liked to see this week. With the Stock Market making fresh 5-year highs today, hopefully this will spill over to the cattle pits Monday morning.
We maintain the long position in the Feeder Cattle.
The stock market continues its march to test the old highs.
With Trillions on the sidelines for the past 4 years waiting to go, you can feel the urgency coming to own stocks again.
Money mangers get paid to buy stocks. Not sit on cash.
The cash dow at 14,000 will be ALL OVER THE TV THIS WEEKEND. ALONG WITH THE SUPER BOWL.
If we get even a 10% pop, that puts the Dow at 15,500. 20 percent and we’re at 16,800. I can’t see any reason we don’t climb this wall of worry. There’s too much money out there coming like a tsunami. Its gonna have to raise all boats. One caveat, if you’re long stocks, you have to have some put protection below. Some bizarre garbage in the Mid East or FSU and we’re looking at a nasty correction.
The Dow has rallied 1600 pts in 10 weeks…. 1220 since the low on New Years Eve.
At any point, we might have a juicy 500 or 600 pt correction just to punish the new longs.
I do not believe we are there yet. We have to take out the old record highs. That should happen by Valentines Day.
The gold market has given us fits and starts. June Gold rebounded another 7 bucks to day to settle at 1671. I still have 1696-97 as upside targets to take profits.
Look at selling SX at 13.38 to 13.40 There is a triple top going back for 3 months.
Look at selling CZ at 5.98-5.99
Have a good weekend.
Remember, you can become a client very easily.
CER