Normal basis for this time of year is for October futures to trade premium to cash.
Since this column is being written before the release of USDA’s October supply and demand report, I will write about a market that I have not addressed in some time.
In August, cattle futures hit a major price projection and did so on all contracts through April 2011. Technically, with the psychological resistance of $100, cattle futures have seemed unable to press through to the topside.
There were two major cattle traders said to be short this market session. Since mid-September, one was said to have rolled his shorts via spreading to the April contract.
The other remained short in the October up-front contract. This didn’t seem plausible to the average Joe, but sometimes, these guys carry a lot of power, and making deliveries is second nature to them.
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