The Rural Voice, 1987-03, Page 25Increases in the beef inventory num-
bers resulted from heifer retention and
it appears that the beef industry is
beginning to build inventories, albeit
from a relatively low level.
***HEDGERS*** should con-
tinue to monitor markets and look for
hedge opportunities both in cattle sales
and feed hedges. Familiarity with
production costs is critical. Buy PUT
strategies, or short futures/insurance
call strategies may be appropriate if
production costs can be met. Watch
the Canadian dollar! It may be a
source of great risk this year to
Ontario cattle producers.
Live Hogs — The buoy-
ancy that was evident in the cattle
market was nowhere to be seen in
the hog pits. June hogs closed on
February 18 at 45.05, a decline of 82
cents from levels of a month previous.
Recent data suggest that hog producers
in aggregate are adding animals to the
breeding herd. Despite the economic
incentives that currently exist, expan-
sion will not take place at historical
rates because of the lack of personal
finance and banking resources.
Seasonal price trends might allow for
a spring to summer rally following
expected weakness in the March -April
time frame.
***HEDGERS*** should be
watching the market for PUT buying
opportunities. Seasonally these PUTS
might be most reasonably priced on a
spring/early summer rally. Watch feed
costs and look for opportunities to
hedge corn purchases via limited risk
CALL options on either December or
March 1988 corn.
The information contained herein
is believed to be accurate; however,
Bache Securities Inc. assumes no
responsibility for its use. For spec-
ific recommendations and suggestions
regarding stop orders, please contact
your nearest Bache office.
David Clarke is a futures contract
supervisor with the investment firm
of Bache Securities Inc., 200 - 376
Richmond Street, London, Ontario,
N6A 3C7, phone 1-800-265-1570.0
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SEAFORTH
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MARCH 1987 23
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