The abrupt higher start this morning in live cattle may be the lesser bears wanting to ring the cash register. If so, it is perceived that due to volume from Aug. 29 to Sept. 7, these bears will be doing little more than breaking even or actually losing on their positions.
In the meantime, the bulls are recouping lost ground and I anticipate the combination could push October futures up to the $116.00 area.
This is because the fundamental changes are weak and not very noticeable to most. However, they are changes nonetheless and therefore may keep some bears holding on for a little too long.
With October now going premium to all other months, it suggests that there is some type of supply situation unfolding. Were there not, there would be no need for any reason to own futures at a premium to cash at this time.
I continue to anticipate the unfolding of a V bottom formation with an upside target to $116.00 October.
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