4 Weeks Later

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Four weeks ago both the fat and feeder cattle markets were hanging within a few dollars of their contract highs. Less than 3 trading days ago, they were as much as $8.00 lower. The calls poured in on what to do. Like anything, timing is the most critical aspect of marketing. Too early and you could waste precious ammunition. Too late, and you may already be dead. Fortunately, the call I made on selling fats and feeders both was pretty close to right on time. I watched optimism turn to pessimism overnight. Now that the market has reached a bottom and turned around some, that pessimism turned once again to optimism and trying to get some one to make sales at these higher levels is like trying to pull teeth with no Novocaine. If you didn't like the last drop in fats and feeders, your sure not going to like the next one. My analysis suggests that cattle should attempt and more likely than not could set a new contract low. Cattlemen should be using this latest rally to make sales against cattle that will be marketed between now and February. It is times like these when the futures and options markets really do their job. They provide you the opportunity to offset the risk of adverse price fluctuation. Don't use bailing wire to fix a problem when you have the right nut or bolt at your disposal. If you need help hedging your cattle during this time of increased volatility, please feel free to contact me at anytime.

Futures trading is not for everyone. The risk of loss in trading futures can be substantial; therefore, carefully consider whether such trading is suitable for you in light of your financial condition.

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