Last week was a rough one for beef. Wholesale prices ended the week lower on the financial turmoil. Traders had expected a little lower trade to start out Monday, the House to approve the bailout plan later that morning with ease, then possibly getting back to trading beef related news. As we know that did not happen. Now it appears the earliest we could see another vote on the bailout plan, if there is one, will be Thursday. Without a change in beef demand we will see $105 cash cattle this fall/winter. Last week averaged $98.50. Futures have not switched to a bear market with October implying $97.52 at the end of October and December implying $98.86 cash at the end of December. Given the sharp drop in feedlot supplies in the upcoming weeks, this is a very big drop in beef demand the market is pricing in. Until the financial situation is stabilized we cannot expect this market to rebound. We should expect another lower day ($1 lower or more) on Tuesday. The trend is down. New lows for this downtrend were made on Monday. A gap from 10170 to 10225 was posted in the December contract.
Our Vital Technical Indicator has the next projected major turn day as the 3rd for live cattle. Stand aside these markets for the moment.
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