September 30, 2008
Good Morning from the Chicago Board of Trade,
Cash Cattle Situation and Outlook:
The cash fed cattle market was at a standstill yesterday with no meaningful bids or offers being put out as participants spent the day putting together new showlists and watching the fallout in the financial markets. A look at last weeks sales volumes and prices shows Texas/Oklahoma feedlots selling 37,366 head of fed cattle for $99 live (50,940 head previous week), Kansas feedlots selling 45,171 head of fed cattle for $99-$98 live and $1.55-$1.56 dressed (32,595 head previous week), Nebraska feedlots selling 68,720 head of fed cattle for $96.50-$99.50 live and $1.50-$1.52 dressed (61,944 head previous week), Colorado feedlots selling 10,964 head of fed cattle for $99-$99.50 live and $1.56 dressed (4,341 head previous week), and Iowa/MN feedlots selling 42,549 head of fed cattle for $95-$98 live and $1.49-$1.50 dressed (25,219 head previous week). All weekly totals include negotiated cash and negotiated grid sales as reported to the USDA with prior week sales totals in parenthesis. As we can see there was fairly decent movement out of the nation’s feedlots last week, with the exception of Texas, which is where we are finding a little larger showlist offering for this week with northern showlist being a little smaller. The cash fed cattle market would look a little lower to me this week just because we have been trading basically steady for the last six weeks and there isn’t a lot of good news in the country in terms of beef demand or positive financial news. We still seem to have a little problem with bigger cattle in the northern sections of feeding country that need to get cleaned up and with the implosion in financial and commodity markets early this week I would say that packers will be difficult to do business with. Because of the inability of beef packers to move much meat the last couple of weeks they have cut production schedules last week and plan to do the same this week, which also will keep them less aggressive in the cash market. I wouldn’t look for much trade to develop until at least midweek, and when it does I would look for a $1-$2 lower trade at $97-$98 in the south and $1.48-$1.50 dressed in the north.
Starting out this week sale barn cattle are on the defensive with fed cattle tops noted at $92-$94 on the beef cattle and $82-$86 on the Holstein steers. Slaughter cow markets are off by $1-$2, as are feeder cattle. The bulk of the cutter and boning utility cows bring $42-$57 with the fat and high yielding cows bringing $58-$66. With an estimated run of 7,500 head Oklahoma City was calling their market mostly $2-$3 lower. Medium/large frame #1-#2 feeder steers weighing 650-850 lbs in OKC yesterday were bringing $96-$106.
Cash Beef Situation and Outlook:
Yesterday’s cattle kill was estimated at 125,000 head, which would be 1,000 head below last week and 5,000 head below the same day a year ago. The industry will be looking for a 640,000 head production week. The boxed beef market was mixed yesterday with the choice cutout closing $.09 higher to settle at $155.51 and the select cutout closing $.35 lower to settle at $149.60. Sales volume was light with 232 loads of beef sold (99.81 loads of choice fab cuts, 64.16 loads of select fab cuts, 21.78 loads of trim, 46.69 loads of grinds). The choice/select spread settled at $5.91 a gain of $.44.
The beef market was mostly steady on the choice product and steady to lower on the select yesterday as most participants spent the day going over inventory positions and gauging weekend beef clearance. Beef clearance over the weekend was rated as average. There was also concern about what was happening on Wall Street, which had some buyers on the sidelines trying to determine what the meltdown in the stock market would mean to consumer demand. There were a few instances where choice ribeyes and top butts needed discounting, which along with lower pricing on inside rounds kept choice cutout values from moving higher. Select beef saw lower markets on ribeyes, inside rounds, clods, and a few loin items. Packers have taken action to support the beef market and improve margins by reducing slaughter schedules late last week and late this week. This should help to stem some of the recent losses in the beef market and stabilize it going into the last half of this week and fist of next.
Futures Market Situation and Outlook:
October live cattle settled at $98.05 a loss of $2.90, December live cattle settled at $99.87 a loss of $2.92, and the February live cattle settled at $100.10 a loss of $2.97. In the feeder cattle pit, October feeder cattle settled at $102.80 a loss of $3.00, November feeder cattle settled at $102.57 a loss of $3.00, and the January feeder cattle settled at $102.80 a loss of $3.00. The reported CME feeder cattle index for 9/26/08 was $106.76 a loss of $.98.
Yesterdays live cattle volume saw 27,447 contracts trade in the pit and 12,824 contracts trade on Globex. Live cattle open interest declined 4,251 contracts to come in this morning at 247,908. Yesterday’s feeder cattle volume saw 2,326 contracts trade in the pit and 611 contracts trade on Globex. Feeder cattle open interest declined 1,131 contracts to come in this morning at 26,028.
The cattle futures market came under further liquidation yesterday on low volume, due to further concerns over what impact the meltdown in the equity and credit markets would have on consumer beef demand. Panic selling was the main theme of the day yesterday and I would suspect that some of that will subside today as long as the stock market can show some stability throughout the day. Live cattle futures pushed into new lows for the move down yesterday and most front month feeder cattle made new contract lows all of which is not bullish technically. The next major support for front month live cattle futures will come into play at $97.50, below that $95.40. In the feeder cattle, the next area of major support comes into play at $100. I don’t know if we can get down to these price levels yet, but if we get more capitulation in the stock market, we will likely see further liquidation in the cattle futures market. Picking a bottom in this type of market environment is going to be tough, and selling futures on such a huge break is going to be hard as well. Whether you are bullish or bearish, I still believe using options is the best play right now as volatility has come down the last several weeks, although, keep in mind option volatility did increase a little on yesterday’s extreme move. I would like to buy some 14-15% volatility with ATM vol currently at 16%. Look for a $.10-$.20 higher open to live and feeder cattle futures this morning. Trade Well!!!
Any one wanting a more detailed report on the cattle and beef markets including fundamental, chart and technical analysis, plus spec/hedge recommendations for packers, processors, producers, and meat buyers feel free to contact me by phone or e-mail to set up a free trial.
There is risk in trading futures and options.
Have a Good Day,
Troy Vetterkind
Vetterkind Cattle Brokerage, LLC
Chicago Board of Trade
141 West Jackson Blvd.
Suite 1220A
Chicago, IL 60604
1-888-299-1477 Toll Free
1-312-896-2068 Direct
1-708-224-5985 Mobile
tvetterkind@linngroup.com
Reproduction or rebroadcast of any portion of this information is strictly prohibited without the written permission of the Linn Group, Inc. the information reflected herein is derived from sources believed to be reliable; however, this information is not guaranteed as to its accuracy or completeness. Opinions expressed are subject to change without notice. This material and any view expressed herein are provided for informational purposes only and should not be construed in any way as an inducement to buy or sell commodity futures or options contracts. The Linn Group and its officers, directors, employees and affiliates may take positions for their own accounts in contracts referred to herein. Trading futures involves risk of loss. Past performance is not indicative of future results.
Tuesday, September 30, 2008
Monday, September 29, 2008
September 29, 2008
Good Morning from the Chicago Board of Trade,
Cash Cattle Situation and Outlook:
We left last week with a fed cattle market that trades mostly $99 live and $1.56 dressed on the southern plains, steady with the previous week and $97-$99 live and $1.50-$1.52 dressed on the northern plains. Movement looked to be moderate and I will report on weekly totals once everything is counted and reported to the USDA this morning. For the week feeder cattle were mostly $1-$3 lower, however some sales were reporting slightly higher by the end of the week. Slaughter cows were mostly lower on the week. Looking into this week, I am going to call for lower cash cattle markets across the board. Probably not a lot lower, but I think we can take $1-$2 off fats, feeders, and cows by Friday. With all the uncertainty in the financial markets and the beef market dipping lower by the end of last week, I think packers will be hard to do business with.
Cash Beef Situation and Outlook:
Last weeks kill was estimated at 647,000 head, which would be 39,000 head below the previous week and 9,000 head below the same week a year ago. The beef market was $1.80 lower on the choice cutout last week and $2.41 lower on the select cutout through last Thursday on moderate movement of 972 loads of fabricated cuts sold. Friday saw another lower day in the beef market with the choice cutout closing $2.58 lower to settle at $155.42 and the select cutout closing $.72 lower to settle at $149.95. Sales volume on Friday was light with 257 loads of beef sold (90.96 loads of choice fab cuts, 86.43 loads of select fab cuts, 22.31 loads of trim, 57.21 loads of grinds). The choice/select spread settled at $5.47 a loss of $1.86.
The beef market held steady for the first part of the week however began to capitulate late in the week as demand for middle meats really grew weak and buyers backed away from the market. Ribs and loins were lower most of the week and there was some strength in the chucks and rounds, however that strength in the end meats began to fade late in the week as well, and it was becoming obvious that packers were over killing given the level of demand. As such we saw packers cut kills late in the week in an attempt to stabilize the market. I would look for a lower start to the beef trade this week, until we can get product cheap enough to spur demand.
Futures Market Situation and Outlook:
For the week, October live cattle lost $.60 to settle at $100.95, December live cattle lost $.45 to settle at $102.80, and the February live cattle lost $.10 to settle at $103.07. In the feeder cattle pit, October feeder cattle lost $.05 to settle at $105.80, November feeder cattle gained $.27 to settle at $105.57, and the January feeder cattle gained $.73 to settle at $105.80.
Live and feeder cattle futures ended the week under pressure again on further liquidation due to financial concerns and ideas cash markets would drift this week. This week isn’t going to start out any better, with concerns over whether or not the Federal Governments bail out plan will get passed or even work, and more bank failures looming and a further tightening of credit. With most other commodity markets lower this morning, cattle aren’t going to fare much better. We will be down testing support from the major sell off two Thursday’s ago at $100.05 on the October live cattle and $101.05 on December live cattle. Feeder cattle will gravitate towards lows set the same day at $103.30 on the October contract and $102.87 on the November contract. Failure of the above mentioned support areas on any of these cattle contracts will likely open the door for further liquidation to contract lows. Look for a $.25-$.50 lower start to live and feeder cattle futures this morning. Trade Well!!!
Any one wanting a more detailed report on the cattle and beef markets including fundamental, chart and technical analysis, plus spec/hedge recommendations for packers, processors, producers, and meat buyers feel free to contact me by phone or e-mail to set up a free trial.
There is risk in trading futures and options.
Have a Good Day,
Troy Vetterkind
Vetterkind Cattle Brokerage, LLC
Chicago Board of Trade
141 West Jackson Blvd.
Suite 1220A
Chicago, IL 60604
1-888-299-1477 Toll Free
1-312-896-2068 Direct
1-708-224-5985 Mobile
tvetterkind@linngroup.com
Reproduction or rebroadcast of any portion of this information is strictly prohibited without the written permission of the Linn Group, Inc. the information reflected herein is derived from sources believed to be reliable; however, this information is not guaranteed as to its accuracy or completeness. Opinions expressed are subject to change without notice. This material and any view expressed herein are provided for informational purposes only and should not be construed in any way as an inducement to buy or sell commodity futures or options contracts. The Linn Group and its officers, directors, employees and affiliates may take positions for their own accounts in contracts referred to herein. Trading futures involves risk of loss. Past performance is not indicative of future results.
Good Morning from the Chicago Board of Trade,
Cash Cattle Situation and Outlook:
We left last week with a fed cattle market that trades mostly $99 live and $1.56 dressed on the southern plains, steady with the previous week and $97-$99 live and $1.50-$1.52 dressed on the northern plains. Movement looked to be moderate and I will report on weekly totals once everything is counted and reported to the USDA this morning. For the week feeder cattle were mostly $1-$3 lower, however some sales were reporting slightly higher by the end of the week. Slaughter cows were mostly lower on the week. Looking into this week, I am going to call for lower cash cattle markets across the board. Probably not a lot lower, but I think we can take $1-$2 off fats, feeders, and cows by Friday. With all the uncertainty in the financial markets and the beef market dipping lower by the end of last week, I think packers will be hard to do business with.
Cash Beef Situation and Outlook:
Last weeks kill was estimated at 647,000 head, which would be 39,000 head below the previous week and 9,000 head below the same week a year ago. The beef market was $1.80 lower on the choice cutout last week and $2.41 lower on the select cutout through last Thursday on moderate movement of 972 loads of fabricated cuts sold. Friday saw another lower day in the beef market with the choice cutout closing $2.58 lower to settle at $155.42 and the select cutout closing $.72 lower to settle at $149.95. Sales volume on Friday was light with 257 loads of beef sold (90.96 loads of choice fab cuts, 86.43 loads of select fab cuts, 22.31 loads of trim, 57.21 loads of grinds). The choice/select spread settled at $5.47 a loss of $1.86.
The beef market held steady for the first part of the week however began to capitulate late in the week as demand for middle meats really grew weak and buyers backed away from the market. Ribs and loins were lower most of the week and there was some strength in the chucks and rounds, however that strength in the end meats began to fade late in the week as well, and it was becoming obvious that packers were over killing given the level of demand. As such we saw packers cut kills late in the week in an attempt to stabilize the market. I would look for a lower start to the beef trade this week, until we can get product cheap enough to spur demand.
Futures Market Situation and Outlook:
For the week, October live cattle lost $.60 to settle at $100.95, December live cattle lost $.45 to settle at $102.80, and the February live cattle lost $.10 to settle at $103.07. In the feeder cattle pit, October feeder cattle lost $.05 to settle at $105.80, November feeder cattle gained $.27 to settle at $105.57, and the January feeder cattle gained $.73 to settle at $105.80.
Live and feeder cattle futures ended the week under pressure again on further liquidation due to financial concerns and ideas cash markets would drift this week. This week isn’t going to start out any better, with concerns over whether or not the Federal Governments bail out plan will get passed or even work, and more bank failures looming and a further tightening of credit. With most other commodity markets lower this morning, cattle aren’t going to fare much better. We will be down testing support from the major sell off two Thursday’s ago at $100.05 on the October live cattle and $101.05 on December live cattle. Feeder cattle will gravitate towards lows set the same day at $103.30 on the October contract and $102.87 on the November contract. Failure of the above mentioned support areas on any of these cattle contracts will likely open the door for further liquidation to contract lows. Look for a $.25-$.50 lower start to live and feeder cattle futures this morning. Trade Well!!!
Any one wanting a more detailed report on the cattle and beef markets including fundamental, chart and technical analysis, plus spec/hedge recommendations for packers, processors, producers, and meat buyers feel free to contact me by phone or e-mail to set up a free trial.
There is risk in trading futures and options.
Have a Good Day,
Troy Vetterkind
Vetterkind Cattle Brokerage, LLC
Chicago Board of Trade
141 West Jackson Blvd.
Suite 1220A
Chicago, IL 60604
1-888-299-1477 Toll Free
1-312-896-2068 Direct
1-708-224-5985 Mobile
tvetterkind@linngroup.com
Reproduction or rebroadcast of any portion of this information is strictly prohibited without the written permission of the Linn Group, Inc. the information reflected herein is derived from sources believed to be reliable; however, this information is not guaranteed as to its accuracy or completeness. Opinions expressed are subject to change without notice. This material and any view expressed herein are provided for informational purposes only and should not be construed in any way as an inducement to buy or sell commodity futures or options contracts. The Linn Group and its officers, directors, employees and affiliates may take positions for their own accounts in contracts referred to herein. Trading futures involves risk of loss. Past performance is not indicative of future results.
Friday, September 26, 2008
September 26, 2008
Good Morning from the Chicago Board of Trade,
Cash Cattle Situation and Outlook:
We saw further trade in the nation’s feedlots yesterday at steady to slightly higher money when compared to earlier in the week. Texas and Kansas feedlots reported selling more cattle yesterday morning at $99 live, steady with the day before, and Nebraska feedlots reported selling several thousand head of cattle yesterday at $97 live and $1.52 dressed, which would be about a dollar higher when compared to Wednesday afternoon’s dressed transactions. That should about clean things up for the week and if there is any more cleanup trade it should take place at steady money with yesterday. Looking into next week, I am going to look for a little softer tone to the fed cattle market, especially if the beef wants to keep acting sloppy. Going home for the weekend, feeder cattle are actually firming up a bit in certain sales throughout the country and slaughter cows continue to trade a little lower. Look for a little lower in both markets early next week.
Cash Beef Situation and Outlook:
Yesterdays kill was estimated at 127,000 head, which would be 1,000 head above last week and 4,000 head above the same day a year ago. The week-to-date kill stands at 508,000 head, which would be 1,000 head above the same period a week ago with the industry looking for a 670,000 head production week. The boxed beef market was lower yesterday with the choice cutout closing $1.61 lower to settle at $158.00 and the select cutout closing $1.29 lower to settle at $150.67. Sales volume was moderate with 343 loads of beef sold (106.04 loads of choice fab cuts, 118.32 loads of select fab cuts, 56.00 loads of trim, and 63.04 loads of grinds). The choice/select spread settled at $7.33 a loss of $.32.
The beef market was lower yesterday as building inventories of rib and loin meat forced some packers to offer deep discounts on ribeye’s and PSMO’s. End meats for the most part traded steady to instances of moderately lower, however the weakness in the rib primal outweighed any kind of price support for the chucks or rounds. Thin meats were lower yesterday along with boneless beef markets and this helped in lower cutout values as well. There was an uptick in sales volume on the lower trade and it was felt that packers were getting problem inventories cleaned up at the lower money. We just haven’t seen the seasonal buying for middle meats kick in yet and this will keep rallies in the cutout value in check until we see better demand for rib and loin meat. An increase in middle meat buying should start in another couple of weeks. Look for a sideways to lower beef trade early next week.
Futures Market Situation and Outlook:
October live cattle settled at $100.95 a loss of $1.22, December live cattle settled at $102.62 a loss of $1.57, and the February live cattle settled at $103.50 a loss of $.82. In the feeder cattle pit, September feeder cattle expired at $107.87 a gain of $.17, October feeder cattle settled at $106.85 a loss of $.75, and the November feeder cattle settled at $106.37 a loss of $1.07. The reported CME feeder cattle index for 9/24/08 was $107.63 a loss of $.43.
Yesterdays live cattle volume saw 32,048 contracts trade in the pit and 15,261 contracts trade on Globex. Live cattle open interest declined 2,707 contracts to come in this morning at 253,536. Yesterday’s feeder cattle volume saw 2,594 contracts trade in the pit and 901 contracts trade on Globex. Feeder cattle open interest gained 21 contracts to come in this morning at 27,332.
Live and feeder cattle futures values came under pressure yesterday on profit taking from the recent rally off of last Thursday’s lows. The market was anticipating a steady to higher cash fed cattle trade for this week, and once that came to fruition, traders decided to take some money off of the table ahead of the weekend. I think we could possibly take a dollar or two off the cash fed cattle market next week as well, which also could have been part of the reason we sold off yesterday. I don’t think the cash market will be a wreck, however we have traded cattle basically steady for the last 4 weeks and I would suspect the market will move one way or the other and I just think we could move lower before we end up going higher into November. I would like to see the cash market trade a couple of dollars lower next week and get some of these heavier cattle cleaned up in the north, break the futures $1-$2, and then I think we can see the market make a pretty good move higher into the first of November. Closing October live cattle under $102 and December live cattle under $103 looks a little bearish technically for the near term and we can probably expect to see a retest of last weeks lows as a result by early next week. Feeder cattle managed to hold $106 in both Oct and Nov, and that will act as support for today. Taking $106 out will likely push us down to $105 real quick, where I think feeders would find some value again. Look for a $.10-$.20 lower open to live and feeder cattle futures this morning. Trade Well!!!
Any one wanting a more detailed report on the cattle and beef markets including fundamental, chart and technical analysis, plus spec/hedge recommendations for packers, processors, producers, and meat buyers feel free to contact me by phone or e-mail to set up a free trial.
There is risk in trading futures and options.
Have a Good Day,
Troy Vetterkind
Vetterkind Cattle Brokerage, LLC
Chicago Board of Trade
141 West Jackson Blvd.
Suite 1220A
Chicago, IL 60604
1-888-299-1477 Toll Free
1-312-896-2068 Direct
1-708-224-5985 Mobile
tvetterkind@linngroup.com
Reproduction or rebroadcast of any portion of this information is strictly prohibited without the written permission of the Linn Group, Inc. the information reflected herein is derived from sources believed to be reliable; however, this information is not guaranteed as to its accuracy or completeness. Opinions expressed are subject to change without notice. This material and any view expressed herein are provided for informational purposes only and should not be construed in any way as an inducement to buy or sell commodity futures or options contracts. The Linn Group and its officers, directors, employees and affiliates may take positions for their own accounts in contracts referred to herein. Trading futures involves risk of loss. Past performance is not indicative of future results.
Good Morning from the Chicago Board of Trade,
Cash Cattle Situation and Outlook:
We saw further trade in the nation’s feedlots yesterday at steady to slightly higher money when compared to earlier in the week. Texas and Kansas feedlots reported selling more cattle yesterday morning at $99 live, steady with the day before, and Nebraska feedlots reported selling several thousand head of cattle yesterday at $97 live and $1.52 dressed, which would be about a dollar higher when compared to Wednesday afternoon’s dressed transactions. That should about clean things up for the week and if there is any more cleanup trade it should take place at steady money with yesterday. Looking into next week, I am going to look for a little softer tone to the fed cattle market, especially if the beef wants to keep acting sloppy. Going home for the weekend, feeder cattle are actually firming up a bit in certain sales throughout the country and slaughter cows continue to trade a little lower. Look for a little lower in both markets early next week.
Cash Beef Situation and Outlook:
Yesterdays kill was estimated at 127,000 head, which would be 1,000 head above last week and 4,000 head above the same day a year ago. The week-to-date kill stands at 508,000 head, which would be 1,000 head above the same period a week ago with the industry looking for a 670,000 head production week. The boxed beef market was lower yesterday with the choice cutout closing $1.61 lower to settle at $158.00 and the select cutout closing $1.29 lower to settle at $150.67. Sales volume was moderate with 343 loads of beef sold (106.04 loads of choice fab cuts, 118.32 loads of select fab cuts, 56.00 loads of trim, and 63.04 loads of grinds). The choice/select spread settled at $7.33 a loss of $.32.
The beef market was lower yesterday as building inventories of rib and loin meat forced some packers to offer deep discounts on ribeye’s and PSMO’s. End meats for the most part traded steady to instances of moderately lower, however the weakness in the rib primal outweighed any kind of price support for the chucks or rounds. Thin meats were lower yesterday along with boneless beef markets and this helped in lower cutout values as well. There was an uptick in sales volume on the lower trade and it was felt that packers were getting problem inventories cleaned up at the lower money. We just haven’t seen the seasonal buying for middle meats kick in yet and this will keep rallies in the cutout value in check until we see better demand for rib and loin meat. An increase in middle meat buying should start in another couple of weeks. Look for a sideways to lower beef trade early next week.
Futures Market Situation and Outlook:
October live cattle settled at $100.95 a loss of $1.22, December live cattle settled at $102.62 a loss of $1.57, and the February live cattle settled at $103.50 a loss of $.82. In the feeder cattle pit, September feeder cattle expired at $107.87 a gain of $.17, October feeder cattle settled at $106.85 a loss of $.75, and the November feeder cattle settled at $106.37 a loss of $1.07. The reported CME feeder cattle index for 9/24/08 was $107.63 a loss of $.43.
Yesterdays live cattle volume saw 32,048 contracts trade in the pit and 15,261 contracts trade on Globex. Live cattle open interest declined 2,707 contracts to come in this morning at 253,536. Yesterday’s feeder cattle volume saw 2,594 contracts trade in the pit and 901 contracts trade on Globex. Feeder cattle open interest gained 21 contracts to come in this morning at 27,332.
Live and feeder cattle futures values came under pressure yesterday on profit taking from the recent rally off of last Thursday’s lows. The market was anticipating a steady to higher cash fed cattle trade for this week, and once that came to fruition, traders decided to take some money off of the table ahead of the weekend. I think we could possibly take a dollar or two off the cash fed cattle market next week as well, which also could have been part of the reason we sold off yesterday. I don’t think the cash market will be a wreck, however we have traded cattle basically steady for the last 4 weeks and I would suspect the market will move one way or the other and I just think we could move lower before we end up going higher into November. I would like to see the cash market trade a couple of dollars lower next week and get some of these heavier cattle cleaned up in the north, break the futures $1-$2, and then I think we can see the market make a pretty good move higher into the first of November. Closing October live cattle under $102 and December live cattle under $103 looks a little bearish technically for the near term and we can probably expect to see a retest of last weeks lows as a result by early next week. Feeder cattle managed to hold $106 in both Oct and Nov, and that will act as support for today. Taking $106 out will likely push us down to $105 real quick, where I think feeders would find some value again. Look for a $.10-$.20 lower open to live and feeder cattle futures this morning. Trade Well!!!
Any one wanting a more detailed report on the cattle and beef markets including fundamental, chart and technical analysis, plus spec/hedge recommendations for packers, processors, producers, and meat buyers feel free to contact me by phone or e-mail to set up a free trial.
There is risk in trading futures and options.
Have a Good Day,
Troy Vetterkind
Vetterkind Cattle Brokerage, LLC
Chicago Board of Trade
141 West Jackson Blvd.
Suite 1220A
Chicago, IL 60604
1-888-299-1477 Toll Free
1-312-896-2068 Direct
1-708-224-5985 Mobile
tvetterkind@linngroup.com
Reproduction or rebroadcast of any portion of this information is strictly prohibited without the written permission of the Linn Group, Inc. the information reflected herein is derived from sources believed to be reliable; however, this information is not guaranteed as to its accuracy or completeness. Opinions expressed are subject to change without notice. This material and any view expressed herein are provided for informational purposes only and should not be construed in any way as an inducement to buy or sell commodity futures or options contracts. The Linn Group and its officers, directors, employees and affiliates may take positions for their own accounts in contracts referred to herein. Trading futures involves risk of loss. Past performance is not indicative of future results.
Thursday, September 25, 2008
September 25, 2008
Good Morning from the Chicago Board of Trade,
Cash Cattle Situation and Outlook:
The cash cattle market turned active on the southern plains and Colorado yesterday with prices coming in fully steady at $99 live and $1.56 dressed in Texas and Kansas, and $1 higher in Colorado at $99 live. There were a couple thousand head of fed cattle that traded in Nebraska at $98 live in the east and $99 live in the west. Trade volumes look to be about 20,000 head apiece between Texas and Kansas and 2,000-4,000 head in Colorado and Nebraska. Once again packers are a little harder to do business with this week as they continue to pull from contract and formula supplies. It was reported yesterday that some packers were pulling their bids after getting moderate numbers of fed cattle bought yesterday. I would look for further trade to develop today at steady money with yesterday. Fat cattle selling through the upper Midwest auction markets were higher yesterday as well, with both Sioux Falls and Yankton, SD calling their markets steady to $1 higher at $92-$95. Slaughter cows remain mostly lower throughout the country as do cash feeder cattle sales. Cows and feeders should stay under pressure for the rest of the week.
Cash Beef Situation and Outlook:
Yesterdays kill was estimated at 128,000 head, which would be 1,000 head above last week and 1,000 head above the same day a year ago. The week-to-date kill now stands at 381,000 head, which would be steady with last weeks pace with the industry looking for a 670,000 head production week. The boxed beef market was lower yesterday with the choice cutout closing $.80 lower to settle at $159.61 and the select cutout closing $.28 lower to settle at $151.96. Sales volume was good with 305 loads of beef sold (97.93 loads of choice fab cuts, 100.19 loads of select fab cuts, 41.76 loads of trim, 65.23 loads of grinds). The choice/select spread settled at $7.65 a loss of $.52.
The beef market was lower yesterday as buyer demand for middle meats continues to be soft. With the kill running even with last week many are of the opinion that there will be discounts surfacing for rib and loin meat given the softer demand for these items and this keeps buyers procuring meat in a hand-to-mouth fashion. This is especially true given a larger hog slaughter the last couple of weeks. There were also a few instances of price markdowns in round cuts, which added weight to overall cutout values. Coarse ground values were under some moderate pressure yesterday, which kept boneless beef values pressured. I don’t think we will see a big drop in beef values in the near term, as buyers seem to turn into willing purchasers on any price declines. However, given the level of demand currently the beef market may drift sideways going into early next week.
Futures Market Situation and Outlook:
October live cattle settled at $102.17 a loss of $.02, December live cattle settled at $104.20 a gain of $.75, and the February live cattle settled at $104.32 a gain of $.65. In the feeder cattle pit, September feeder cattle settled at $107.70 a gain of $.10, October feeder cattle settled at $107.60 a gain of $1.00, and the November feeder cattle settled at $107.45 a gain of $1.50. The reported CME feeder cattle index for 9/23/08 was $108.06 a loss of $.10.
Yesterdays live cattle volume saw 24,182 contracts trade in the pit and 14,808 contracts trade on Globex. Live cattle open interest gained 295 contracts to come in this morning at 256,294. Yesterday’s feeder cattle volume saw 2,922 contracts trade in the pit and 1,121 contracts trade on Globex. Feeder cattle open interest gained 527 contracts to come in this morning at 27,318.
Live and feeder cattle futures settled higher yesterday on a continuation of the rally that started late last week. Short covering and technical buying were the main features of the day, with most of the strength showing up in the feeder cattle market. The market perceives that the CME feeder index in going to find some support around $103-$104 for the October/November time frame, and the futures have had a nice rally from that price level since last Thursday. Another supporting factor to the live cattle futures yesterday was that cash fed cattle were trading steady in Texas and Kansas yesterday and $1 higher in Colorado and Nebraska. The cattle futures market has went through some huge liquidation the last several weeks and I think with friendly fundamentals going into October and November that the market has further upside. I continue to want to use breaks in the market as buying opportunities. In the near term October feeder cattle will find some resistance at $109 and December live cattle will find some resistance at $105. These would be price targets on the upside for the rest of this week. Support on the downside today will be found at $103 in the December live cattle and $106 in the October feeder cattle. Look for a $.10-$.20 lower open to trading this morning. Trade Well!!!
Any one wanting a more detailed report on the cattle and beef markets including fundamental, chart and technical analysis, plus spec/hedge recommendations for packers, processors, producers, and meat buyers feel free to contact me by phone or e-mail to set up a free trial.
There is risk in trading futures and options.
Have a Good Day,
Troy Vetterkind
Vetterkind Cattle Brokerage, LLC
Chicago Board of Trade
141 West Jackson Blvd.
Suite 1220A
Chicago, IL 60604
1-888-299-1477 Toll Free
1-312-896-2068 Direct
1-708-224-5985 Mobile
tvetterkind@linngroup.com
Reproduction or rebroadcast of any portion of this information is strictly prohibited without the written permission of the Linn Group, Inc. the information reflected herein is derived from sources believed to be reliable; however, this information is not guaranteed as to its accuracy or completeness. Opinions expressed are subject to change without notice. This material and any view expressed herein are provided for informational purposes only and should not be construed in any way as an inducement to buy or sell commodity futures or options contracts. The Linn Group and its officers, directors, employees and affiliates may take positions for their own accounts in contracts referred to herein. Trading futures involves risk of loss. Past performance is not indicative of future results.
Good Morning from the Chicago Board of Trade,
Cash Cattle Situation and Outlook:
The cash cattle market turned active on the southern plains and Colorado yesterday with prices coming in fully steady at $99 live and $1.56 dressed in Texas and Kansas, and $1 higher in Colorado at $99 live. There were a couple thousand head of fed cattle that traded in Nebraska at $98 live in the east and $99 live in the west. Trade volumes look to be about 20,000 head apiece between Texas and Kansas and 2,000-4,000 head in Colorado and Nebraska. Once again packers are a little harder to do business with this week as they continue to pull from contract and formula supplies. It was reported yesterday that some packers were pulling their bids after getting moderate numbers of fed cattle bought yesterday. I would look for further trade to develop today at steady money with yesterday. Fat cattle selling through the upper Midwest auction markets were higher yesterday as well, with both Sioux Falls and Yankton, SD calling their markets steady to $1 higher at $92-$95. Slaughter cows remain mostly lower throughout the country as do cash feeder cattle sales. Cows and feeders should stay under pressure for the rest of the week.
Cash Beef Situation and Outlook:
Yesterdays kill was estimated at 128,000 head, which would be 1,000 head above last week and 1,000 head above the same day a year ago. The week-to-date kill now stands at 381,000 head, which would be steady with last weeks pace with the industry looking for a 670,000 head production week. The boxed beef market was lower yesterday with the choice cutout closing $.80 lower to settle at $159.61 and the select cutout closing $.28 lower to settle at $151.96. Sales volume was good with 305 loads of beef sold (97.93 loads of choice fab cuts, 100.19 loads of select fab cuts, 41.76 loads of trim, 65.23 loads of grinds). The choice/select spread settled at $7.65 a loss of $.52.
The beef market was lower yesterday as buyer demand for middle meats continues to be soft. With the kill running even with last week many are of the opinion that there will be discounts surfacing for rib and loin meat given the softer demand for these items and this keeps buyers procuring meat in a hand-to-mouth fashion. This is especially true given a larger hog slaughter the last couple of weeks. There were also a few instances of price markdowns in round cuts, which added weight to overall cutout values. Coarse ground values were under some moderate pressure yesterday, which kept boneless beef values pressured. I don’t think we will see a big drop in beef values in the near term, as buyers seem to turn into willing purchasers on any price declines. However, given the level of demand currently the beef market may drift sideways going into early next week.
Futures Market Situation and Outlook:
October live cattle settled at $102.17 a loss of $.02, December live cattle settled at $104.20 a gain of $.75, and the February live cattle settled at $104.32 a gain of $.65. In the feeder cattle pit, September feeder cattle settled at $107.70 a gain of $.10, October feeder cattle settled at $107.60 a gain of $1.00, and the November feeder cattle settled at $107.45 a gain of $1.50. The reported CME feeder cattle index for 9/23/08 was $108.06 a loss of $.10.
Yesterdays live cattle volume saw 24,182 contracts trade in the pit and 14,808 contracts trade on Globex. Live cattle open interest gained 295 contracts to come in this morning at 256,294. Yesterday’s feeder cattle volume saw 2,922 contracts trade in the pit and 1,121 contracts trade on Globex. Feeder cattle open interest gained 527 contracts to come in this morning at 27,318.
Live and feeder cattle futures settled higher yesterday on a continuation of the rally that started late last week. Short covering and technical buying were the main features of the day, with most of the strength showing up in the feeder cattle market. The market perceives that the CME feeder index in going to find some support around $103-$104 for the October/November time frame, and the futures have had a nice rally from that price level since last Thursday. Another supporting factor to the live cattle futures yesterday was that cash fed cattle were trading steady in Texas and Kansas yesterday and $1 higher in Colorado and Nebraska. The cattle futures market has went through some huge liquidation the last several weeks and I think with friendly fundamentals going into October and November that the market has further upside. I continue to want to use breaks in the market as buying opportunities. In the near term October feeder cattle will find some resistance at $109 and December live cattle will find some resistance at $105. These would be price targets on the upside for the rest of this week. Support on the downside today will be found at $103 in the December live cattle and $106 in the October feeder cattle. Look for a $.10-$.20 lower open to trading this morning. Trade Well!!!
Any one wanting a more detailed report on the cattle and beef markets including fundamental, chart and technical analysis, plus spec/hedge recommendations for packers, processors, producers, and meat buyers feel free to contact me by phone or e-mail to set up a free trial.
There is risk in trading futures and options.
Have a Good Day,
Troy Vetterkind
Vetterkind Cattle Brokerage, LLC
Chicago Board of Trade
141 West Jackson Blvd.
Suite 1220A
Chicago, IL 60604
1-888-299-1477 Toll Free
1-312-896-2068 Direct
1-708-224-5985 Mobile
tvetterkind@linngroup.com
Reproduction or rebroadcast of any portion of this information is strictly prohibited without the written permission of the Linn Group, Inc. the information reflected herein is derived from sources believed to be reliable; however, this information is not guaranteed as to its accuracy or completeness. Opinions expressed are subject to change without notice. This material and any view expressed herein are provided for informational purposes only and should not be construed in any way as an inducement to buy or sell commodity futures or options contracts. The Linn Group and its officers, directors, employees and affiliates may take positions for their own accounts in contracts referred to herein. Trading futures involves risk of loss. Past performance is not indicative of future results.
Wednesday, September 24, 2008
September 24, 2008
Good Morning from the Chicago Board of Trade,
Cash Cattle Situation and Outlook:
The cash fed cattle market was quiet again yesterday with a few $97/$1.48 packer bids being put out with most feedlots remaining priced at $102-$103/$1.60-$1.61. Another late week trade is expected with prices no worse than steady with last week (i.e. $99 live in the south/$98 live and $1.51 dressed in the north). There isn’t a whole lot new to report about the market as showlists remain a touch smaller in the south and larger in the north. Packers have a lot of contract and formula cattle to work through in the north and this keeps them bidding the market in that part of the country lower. The opposite is the case in the southern feeding states with packers not having as many contract cattle to work off of and overall numbers in the south are a lot more current than in the north. This will keep premiums in that part of the country running above that being paid on cattle in the north. We should continue to see a general tightening of numbers in the weeks to come per our placement patterns in the last several cattle on feed reports, which should be a supporting factor to the cash fed cattle market in the coming weeks. Coming into midweek, fed cattle selling through the auction markets are mostly steady, slaughter cows are mostly lower as are feeder cattle. Numbers of feeder cattle coming through northern plains sale barns continue to be heavy and I would look for this to continue for the next several weeks, which is going to be a limiting factor to the cash feeder cattle market.
Cash Beef Situation and Outlook:
Yesterdays kill was estimated at 127,000 head, which would be 1,000 head above last week and even with the same day a year ago. The USDA revised the Monday slaughter down to 126,000 head, which puts the new week-to-date slaughter at 253,000 head, 1,000 head below last weeks pace. The boxed beef market was $.86 higher on the choice cutout closing at $160.41 and $.36 higher on the select cutout closing at $152.24. Sales volume was moderate with 200 loads of beef sold (64.64 loads of choice fab cuts, 81.29 loads of select fab cuts, 10.58 loads of trim, 43.64 loads of grinds). The choice/select spread settled at $8.17 a gain of $.50.
The boxed beef market saw some moderate gains yesterday on better buying in the rib primal of the animal. Chuck items, as well as the certain cuts from the round cleared up a bit and higher transactions were taking place during yesterday’s session. The drag on the complex continues to be found in the loin section of the carcass where packers are forced to offer discounts on select strips and top butts to keep from backing product up. Thin meats and boneless beef items were also lower during the day yesterday. There is a little concern that packers could be over killing for the current demand in the market and as such many buyers are buying hand-to-mouth. Export demand remains in good shape and this should help support the market going forward. I will continue to look for a beef market that trades sideways to higher by the end of the week.
Futures Market Situation and Outlook:
October live cattle settled at $102.20 a loss of $.25, December live cattle settled at $103.45 a loss of $.45, and the February live cattle settled at $103.67 a loss of $.47. In the feeder cattle pit, September feeder cattle settled at $107.60 a loss of $.55, October feeder cattle settled at $106.60 a loss of $.45, and the November feeder cattle settled at $105.95 a loss of $.52. The reported CME feeder cattle index for 9/22/08 was $108.16 a loss of $.27.
Yesterdays live cattle volume saw 19,411 contracts trade in the pit and 10,193 contracts trade on Globex. Live cattle open interest declined 1,290 contracts to come in this morning at 256,310. Yesterday’s feeder cattle volume saw 1,368 contracts trade in the pit and 755 contracts trade on Globex. Feeder cattle open interest gained 88 contracts to come in this morning at 26,784.
Live and feeder cattle futures settled lower yesterday on a correction from the recent gains we saw from late last week. It was a rather slow trading day with the market trying to rally a couple of times throughout the session only to find willing sellers on any up tick in the market. Support was carved out early in the morning at $102 in Oct live and $106 in Oct feeders, and buyers were under these price levels whenever the market approached. Option activity slowed down a little yesterday, however there was some interest in the December $107 calls. It has been a pretty active month in the live cattle options with total option open interest increasing 13,968 contracts, with call open interest increasing 9,523 and put open interest increasing 4,445 since the first of the month. Option volatility has come down quite a bit the last several weeks as well with most at the money vol trading at 15.5% vs 18%-20% a couple of months ago. Whether you are bullish or bearish, with volatility being cheap it is time to buy options as opposed to selling them. For today, I think we could be a little higher as a bit more optimism seems to be coming back into the financial sector and grains are higher again overnight. If corn is going to get good again I think we are going to see investors come back into the backend of cattle, which is going to be supportive to April live cattle forward. This again likely means we will see another big bear spread program, selling the front and buying the back. The front month live cattle contracts should find some support from ideas of steady to higher cash fed cattle markets this week. October live cattle will find first support today at $102 and below that $101.50. December live cattle will find first support at $103 and below that $102.75. You could probably look at buying something against that support this morning. Feeder cattle could be under a little pressure early if corn wants to trade higher on the open. However, if we get a big rally in corn they will come after back month live cattle and this will be supportive to feeder cattle futures. Support in Oct feeders will be found from $106 down to $105.80. Look for a $.10-$.20 higher open to live cattle futures and $.10-$.20 lower to feeder cattle futures this morning. Trade Well!!!
Any one wanting a more detailed report on the cattle and beef markets including fundamental, chart and technical analysis, plus spec/hedge recommendations for packers, processors, producers, and meat buyers feel free to contact me by phone or e-mail to set up a free trial.
There is risk in trading futures and options.
Have a Good Day,
Troy Vetterkind
Vetterkind Cattle Brokerage, LLC
Chicago Board of Trade
141 West Jackson Blvd.
Suite 1220A
Chicago, IL 60604
1-888-299-1477 Toll Free
1-312-896-2068 Direct
1-708-224-5985 Mobile
tvetterkind@linngroup.com
Reproduction or rebroadcast of any portion of this information is strictly prohibited without the written permission of the Linn Group, Inc. the information reflected herein is derived from sources believed to be reliable; however, this information is not guaranteed as to its accuracy or completeness. Opinions expressed are subject to change without notice. This material and any view expressed herein are provided for informational purposes only and should not be construed in any way as an inducement to buy or sell commodity futures or options contracts. The Linn Group and its officers, directors, employees and affiliates may take positions for their own accounts in contracts referred to herein. Trading futures involves risk of loss. Past performance is not indicative of future results.
Good Morning from the Chicago Board of Trade,
Cash Cattle Situation and Outlook:
The cash fed cattle market was quiet again yesterday with a few $97/$1.48 packer bids being put out with most feedlots remaining priced at $102-$103/$1.60-$1.61. Another late week trade is expected with prices no worse than steady with last week (i.e. $99 live in the south/$98 live and $1.51 dressed in the north). There isn’t a whole lot new to report about the market as showlists remain a touch smaller in the south and larger in the north. Packers have a lot of contract and formula cattle to work through in the north and this keeps them bidding the market in that part of the country lower. The opposite is the case in the southern feeding states with packers not having as many contract cattle to work off of and overall numbers in the south are a lot more current than in the north. This will keep premiums in that part of the country running above that being paid on cattle in the north. We should continue to see a general tightening of numbers in the weeks to come per our placement patterns in the last several cattle on feed reports, which should be a supporting factor to the cash fed cattle market in the coming weeks. Coming into midweek, fed cattle selling through the auction markets are mostly steady, slaughter cows are mostly lower as are feeder cattle. Numbers of feeder cattle coming through northern plains sale barns continue to be heavy and I would look for this to continue for the next several weeks, which is going to be a limiting factor to the cash feeder cattle market.
Cash Beef Situation and Outlook:
Yesterdays kill was estimated at 127,000 head, which would be 1,000 head above last week and even with the same day a year ago. The USDA revised the Monday slaughter down to 126,000 head, which puts the new week-to-date slaughter at 253,000 head, 1,000 head below last weeks pace. The boxed beef market was $.86 higher on the choice cutout closing at $160.41 and $.36 higher on the select cutout closing at $152.24. Sales volume was moderate with 200 loads of beef sold (64.64 loads of choice fab cuts, 81.29 loads of select fab cuts, 10.58 loads of trim, 43.64 loads of grinds). The choice/select spread settled at $8.17 a gain of $.50.
The boxed beef market saw some moderate gains yesterday on better buying in the rib primal of the animal. Chuck items, as well as the certain cuts from the round cleared up a bit and higher transactions were taking place during yesterday’s session. The drag on the complex continues to be found in the loin section of the carcass where packers are forced to offer discounts on select strips and top butts to keep from backing product up. Thin meats and boneless beef items were also lower during the day yesterday. There is a little concern that packers could be over killing for the current demand in the market and as such many buyers are buying hand-to-mouth. Export demand remains in good shape and this should help support the market going forward. I will continue to look for a beef market that trades sideways to higher by the end of the week.
Futures Market Situation and Outlook:
October live cattle settled at $102.20 a loss of $.25, December live cattle settled at $103.45 a loss of $.45, and the February live cattle settled at $103.67 a loss of $.47. In the feeder cattle pit, September feeder cattle settled at $107.60 a loss of $.55, October feeder cattle settled at $106.60 a loss of $.45, and the November feeder cattle settled at $105.95 a loss of $.52. The reported CME feeder cattle index for 9/22/08 was $108.16 a loss of $.27.
Yesterdays live cattle volume saw 19,411 contracts trade in the pit and 10,193 contracts trade on Globex. Live cattle open interest declined 1,290 contracts to come in this morning at 256,310. Yesterday’s feeder cattle volume saw 1,368 contracts trade in the pit and 755 contracts trade on Globex. Feeder cattle open interest gained 88 contracts to come in this morning at 26,784.
Live and feeder cattle futures settled lower yesterday on a correction from the recent gains we saw from late last week. It was a rather slow trading day with the market trying to rally a couple of times throughout the session only to find willing sellers on any up tick in the market. Support was carved out early in the morning at $102 in Oct live and $106 in Oct feeders, and buyers were under these price levels whenever the market approached. Option activity slowed down a little yesterday, however there was some interest in the December $107 calls. It has been a pretty active month in the live cattle options with total option open interest increasing 13,968 contracts, with call open interest increasing 9,523 and put open interest increasing 4,445 since the first of the month. Option volatility has come down quite a bit the last several weeks as well with most at the money vol trading at 15.5% vs 18%-20% a couple of months ago. Whether you are bullish or bearish, with volatility being cheap it is time to buy options as opposed to selling them. For today, I think we could be a little higher as a bit more optimism seems to be coming back into the financial sector and grains are higher again overnight. If corn is going to get good again I think we are going to see investors come back into the backend of cattle, which is going to be supportive to April live cattle forward. This again likely means we will see another big bear spread program, selling the front and buying the back. The front month live cattle contracts should find some support from ideas of steady to higher cash fed cattle markets this week. October live cattle will find first support today at $102 and below that $101.50. December live cattle will find first support at $103 and below that $102.75. You could probably look at buying something against that support this morning. Feeder cattle could be under a little pressure early if corn wants to trade higher on the open. However, if we get a big rally in corn they will come after back month live cattle and this will be supportive to feeder cattle futures. Support in Oct feeders will be found from $106 down to $105.80. Look for a $.10-$.20 higher open to live cattle futures and $.10-$.20 lower to feeder cattle futures this morning. Trade Well!!!
Any one wanting a more detailed report on the cattle and beef markets including fundamental, chart and technical analysis, plus spec/hedge recommendations for packers, processors, producers, and meat buyers feel free to contact me by phone or e-mail to set up a free trial.
There is risk in trading futures and options.
Have a Good Day,
Troy Vetterkind
Vetterkind Cattle Brokerage, LLC
Chicago Board of Trade
141 West Jackson Blvd.
Suite 1220A
Chicago, IL 60604
1-888-299-1477 Toll Free
1-312-896-2068 Direct
1-708-224-5985 Mobile
tvetterkind@linngroup.com
Reproduction or rebroadcast of any portion of this information is strictly prohibited without the written permission of the Linn Group, Inc. the information reflected herein is derived from sources believed to be reliable; however, this information is not guaranteed as to its accuracy or completeness. Opinions expressed are subject to change without notice. This material and any view expressed herein are provided for informational purposes only and should not be construed in any way as an inducement to buy or sell commodity futures or options contracts. The Linn Group and its officers, directors, employees and affiliates may take positions for their own accounts in contracts referred to herein. Trading futures involves risk of loss. Past performance is not indicative of future results.
Tuesday, September 23, 2008
September 23, 2008
Good Morning from the Chicago Board of Trade,
Cash Cattle Situation and Outlook:
The cash cattle market was quiet as is usual for a Monday with showlist distribution the main feature of the day. Numbers of fed cattle for sale this week look to be larger in Nebraska and Kansas, and smaller in Texas. Packer bids were few and far between yesterday with feedlot offering prices beginning the week at $102-$103 live and $1.60-$1.62 dressed. A look at last weeks trade volumes shows Texas/Oklahoma feedlots selling 50,940 head of fed cattle for $99 live, Kansas feedlots selling 32,595 head of fed cattle for $99 live and $1.55-$1.56 dressed, Nebraska feedlots selling 61,944 head of fed cattle for $98 live and $1.50-$1.51 dressed, Colorado feedlots selling 4,341 head of fed cattle for $98 live and $1.52 dressed, and Iowa/MN feedlots selling 25,219 head of fed cattle for $93-$95 live and $1.50-$1.51 dressed. All weekly totals are negotiated cash and negotiated grid sales as reported to the USDA. Movement for the week looks pretty good in Texas and Nebraska and moderate in Kansas, which is why Kansas is showing more cattle for sale this week. Nebraska feedlots look to have more cattle for sale this week as well, simply because they have more cattle to market in the next couple weeks. I still think we can see a steady/better fed cattle trade for this week, especially in the south, as beef demand isn’t all that terribly bad and packers seem to have some demand for cattle as is evidenced by last weeks decent 686,000 head kill. The beef market was a little softer yesterday and I think it will stay that way until midweek, but I also think packers have some beef sold out in front of them that they will need to harvest cattle for. So that’s what we will call for early in the week, no worse than $99 live in the south and $98/$1.51 in the north.
Cash cattle selling in the country sale barns are bringing mostly steady on the fat cattle and lower on the feeders and cows. Fat cattle selling in Zumbrota, MN yesterday were bringing $90-$93 on the beef fats and $82-$86 on the Holsteins, all of which would be steady with last week’s market. Slaughter cows were steady to a little higher at $49-$62 on the cutter’s and boner’s, with the fat cows bringing $63-$68. Feeder cattle markets were mostly lower yesterday with both Oklahoma City and Joplin, MO calling their markets off $1-$3. Oklahoma City had an estimated run of 10,000 head with the bulk of the medium/large frame #1-#2 feeder steers weighing 650 lbs-850 lbs bringing $103-$112, with some calves falling into the same weight group bringing under $100. I would look for a lower trend in the feeder cattle market to continue for most of this week, as we see more numbers coming off grass and coming to market, especially in the northern plains.
Cash Beef Situation and Outlook:
Yesterdays kill was estimated at 129,000 head, which would be 1,000 head above last week and even with the same day year ago. The industry will be looking for another 670,000 head production week. The boxed beef market was mostly lower yesterday with the choice cutout closing $.25 lower to settle at $159.55 and the select cutout closing $1.20 lower to settle at $151.88. Sales volume was moderate with 309 loads of beef sold (100.54 loads of choice fab cuts, 94.56 loads of select fab cuts, 24.20 loads of trim, 89.32 loads of grinds). The choice/select spread settled at $7.66 a gain of $.95.
The beef market was under a degree of pressure yesterday as it was said that packers perhaps carried some product over into this week, which along with lackluster demand for ribeyes, short loins, and PSMO’s had them offering discounts on choice and select grades of the above mentioned product. There were a few instances of some lower transactions taking place on briskets, clods, and inside rounds yesterday also and this helped to weigh on cutout values as well. Ground beef markets were said to be in pretty good shape and this lent support to the boneless beef markets. I think overall, the beef market is in good shape and we may see some further weakness in this next day or two, but we should be able to hold right around this $158-$159 area basis the choice cutout and move higher by the end of the week. The USDA released cold storage figures yesterday, with beef stocks in the nations coolers pegged at 433.971 mil lbs, which would be 10.058 mil lbs or 2% above last month, however 46.973 mil lbs or 11% less when compared to a year ago. The report also showed a 2% decrease in pork stocks compared to last month; however a 5% increase when compared to last year, and poultry stocks showed an increase of 1.5% and 17% of a month ago and year ago respectively. So beef will still have some competition with competing proteins in the near future.
Futures Market Situation and Outlook:
October live cattle settled at $102.45 a gain of $.90, December live cattle settled at $103.90 a gain of $.65, and the February live cattle settled at $104.15 a gain of $.97. In the feeder cattle pit, September feeder cattle settled at $108.15 a loss of $.10, October feeder cattle settled at $107.05 a gain of $1.20, and the November feeder cattle settled at $106.47 a gain of $1.17. The reported CME feeder cattle index for 9/19/08 was $108.43 a loss of $.85.
Yesterdays live cattle volume saw 28,240 contracts trade in the pit and 14,834 contracts trade on Globex. Live cattle open interest declined 2,098 contracts to come in this morning at 257,621. Yesterday’s feeder cattle volume saw 2,953 contracts trade in the pit and 1,531 contracts trade on Globex. Feeder cattle open interest gained 208 contracts to come in this morning at 26,743.
It was another day of short covering in the CME cattle pits yesterday, which kept prices supported for most of the session. The latest commitment of traders report showed commodity funds net long 9,373 contracts live cattle futures and options a decline of 3,759, commercials were net long 24,127 contracts of live cattle f/o a gain of 2,286, and small specs were net short 33,500 contracts of live cattle f/o a decline of 1,473. In the feeder cattle, funds were net short 246 contracts of F/O a gain of 1,182 from the previous report, commercials were net long 5,496 contracts of F/O a gain of 1,660, and the small specs were net short 5,250 contracts of F/O a gain of 478. As we can see there has been a pretty good transfer of ownership in the last several weeks, with the funds trimming their live cattle long position by about 16,000 contracts since the first of August and actually going from net long 7,389 contracts of feeder cattle futures and options to net short 246 contracts during the same time period. The commercial category has taken the majority of these long positions on the way down. This is another reason why I am going to stay with my theme of putting in a near term low in live and feeder cattle futures, as we are on a $13-$15 break in the market, the last two days of which ended in complete and utter capitulation resulting in limit down moves (i.e. Wednesday and Thursday of last week). We have a big transfer of ownership in the long side of futures from spec’s to commercials, the fundamentals of the market aren’t that bad (at least the fed cattle fundamentals), and everybody in the world in bearish the market. I think you want to be very careful about being short in this type of environment at these price levels, and do so only if you are fading extreme type moves like we saw yesterday when the market is $2 plus higher in the backend of the board for a day or overnight trade. I don’t think the commodity story is over with as there are still supply/demand issues in all these markets going forward, especially the cattle and hogs. I think we saw forced liquidation the last couple of weeks out of commodities because of what was going on in New York, I think there is a plethora of money sitting on the sidelines looking for a home, and I think there is a general lack of confidence in the equities markets right now, which is still going to make tangible investments like commodities look attractive, especially if that commodity has a story behind it.
Yesterday saw a lot of spreading in the fat cattle market with buying the backs and selling the fronts due to less than expected placements in the cattle on feed reports and strength in the corn. The placement story in the on feed report simply showed less lightweight cattle placements for the first quarter of next year, however we all know we have an abundance of big cattle coming off grass in the next several weeks that will be placed into the first quarter of next year. However, here is where the next trap could be, as all the fundamental and numbers guy’s including myself, will be looking at the increase in tonnage we will have for the first quarter of next year and will want to be selling rallies out there, and all of the sudden commodities will get good again, or corn will get good again, and money will be looking for a home and they come and buy the back end of the board like they did earlier in the year. So we all need to be a little careful getting too bearish the cattle market right now. For today I would look for a little lower start to futures trading due to lower overnight markets and a correction from yesterday’s big rally. Support in Oct live cattle should be found at $102, December at $103, and Oct feeders at $106. However, I am not so convinced feeder cattle can hold much strength until the cash feeder market turns around. Call option trading was pretty heavy again in the December live cattle $104-$108 calls, with open interest going up. Option volatility has come down quite a bit the last several weeks, and this might be a good way to play an upside move. Look for a $.10-$.20 lower start to cattle futures trading this morning. Trade Well!!!
Any one wanting a more detailed report on the cattle and beef markets including fundamental, chart and technical analysis, plus spec/hedge recommendations for packers, processors, producers, and meat buyers feel free to contact me by phone or e-mail to set up a free trial.
There is risk in trading futures and options.
Have a Good Day,
Troy Vetterkind
Vetterkind Cattle Brokerage, LLC
Chicago Board of Trade
141 West Jackson Blvd.
Suite 1220A
Chicago, IL 60604
1-888-299-1477 Toll Free
1-312-896-2068 Direct
1-708-224-5985 Mobile
tvetterkind@linngroup.com
Reproduction or rebroadcast of any portion of this information is strictly prohibited without the written permission of the Linn Group, Inc. the information reflected herein is derived from sources believed to be reliable; however, this information is not guaranteed as to its accuracy or completeness. Opinions expressed are subject to change without notice. This material and any view expressed herein are provided for informational purposes only and should not be construed in any way as an inducement to buy or sell commodity futures or options contracts. The Linn Group and its officers, directors, employees and affiliates may take positions for their own accounts in contracts referred to herein. Trading futures involves risk of loss. Past performance is not indicative of future results.
Good Morning from the Chicago Board of Trade,
Cash Cattle Situation and Outlook:
The cash cattle market was quiet as is usual for a Monday with showlist distribution the main feature of the day. Numbers of fed cattle for sale this week look to be larger in Nebraska and Kansas, and smaller in Texas. Packer bids were few and far between yesterday with feedlot offering prices beginning the week at $102-$103 live and $1.60-$1.62 dressed. A look at last weeks trade volumes shows Texas/Oklahoma feedlots selling 50,940 head of fed cattle for $99 live, Kansas feedlots selling 32,595 head of fed cattle for $99 live and $1.55-$1.56 dressed, Nebraska feedlots selling 61,944 head of fed cattle for $98 live and $1.50-$1.51 dressed, Colorado feedlots selling 4,341 head of fed cattle for $98 live and $1.52 dressed, and Iowa/MN feedlots selling 25,219 head of fed cattle for $93-$95 live and $1.50-$1.51 dressed. All weekly totals are negotiated cash and negotiated grid sales as reported to the USDA. Movement for the week looks pretty good in Texas and Nebraska and moderate in Kansas, which is why Kansas is showing more cattle for sale this week. Nebraska feedlots look to have more cattle for sale this week as well, simply because they have more cattle to market in the next couple weeks. I still think we can see a steady/better fed cattle trade for this week, especially in the south, as beef demand isn’t all that terribly bad and packers seem to have some demand for cattle as is evidenced by last weeks decent 686,000 head kill. The beef market was a little softer yesterday and I think it will stay that way until midweek, but I also think packers have some beef sold out in front of them that they will need to harvest cattle for. So that’s what we will call for early in the week, no worse than $99 live in the south and $98/$1.51 in the north.
Cash cattle selling in the country sale barns are bringing mostly steady on the fat cattle and lower on the feeders and cows. Fat cattle selling in Zumbrota, MN yesterday were bringing $90-$93 on the beef fats and $82-$86 on the Holsteins, all of which would be steady with last week’s market. Slaughter cows were steady to a little higher at $49-$62 on the cutter’s and boner’s, with the fat cows bringing $63-$68. Feeder cattle markets were mostly lower yesterday with both Oklahoma City and Joplin, MO calling their markets off $1-$3. Oklahoma City had an estimated run of 10,000 head with the bulk of the medium/large frame #1-#2 feeder steers weighing 650 lbs-850 lbs bringing $103-$112, with some calves falling into the same weight group bringing under $100. I would look for a lower trend in the feeder cattle market to continue for most of this week, as we see more numbers coming off grass and coming to market, especially in the northern plains.
Cash Beef Situation and Outlook:
Yesterdays kill was estimated at 129,000 head, which would be 1,000 head above last week and even with the same day year ago. The industry will be looking for another 670,000 head production week. The boxed beef market was mostly lower yesterday with the choice cutout closing $.25 lower to settle at $159.55 and the select cutout closing $1.20 lower to settle at $151.88. Sales volume was moderate with 309 loads of beef sold (100.54 loads of choice fab cuts, 94.56 loads of select fab cuts, 24.20 loads of trim, 89.32 loads of grinds). The choice/select spread settled at $7.66 a gain of $.95.
The beef market was under a degree of pressure yesterday as it was said that packers perhaps carried some product over into this week, which along with lackluster demand for ribeyes, short loins, and PSMO’s had them offering discounts on choice and select grades of the above mentioned product. There were a few instances of some lower transactions taking place on briskets, clods, and inside rounds yesterday also and this helped to weigh on cutout values as well. Ground beef markets were said to be in pretty good shape and this lent support to the boneless beef markets. I think overall, the beef market is in good shape and we may see some further weakness in this next day or two, but we should be able to hold right around this $158-$159 area basis the choice cutout and move higher by the end of the week. The USDA released cold storage figures yesterday, with beef stocks in the nations coolers pegged at 433.971 mil lbs, which would be 10.058 mil lbs or 2% above last month, however 46.973 mil lbs or 11% less when compared to a year ago. The report also showed a 2% decrease in pork stocks compared to last month; however a 5% increase when compared to last year, and poultry stocks showed an increase of 1.5% and 17% of a month ago and year ago respectively. So beef will still have some competition with competing proteins in the near future.
Futures Market Situation and Outlook:
October live cattle settled at $102.45 a gain of $.90, December live cattle settled at $103.90 a gain of $.65, and the February live cattle settled at $104.15 a gain of $.97. In the feeder cattle pit, September feeder cattle settled at $108.15 a loss of $.10, October feeder cattle settled at $107.05 a gain of $1.20, and the November feeder cattle settled at $106.47 a gain of $1.17. The reported CME feeder cattle index for 9/19/08 was $108.43 a loss of $.85.
Yesterdays live cattle volume saw 28,240 contracts trade in the pit and 14,834 contracts trade on Globex. Live cattle open interest declined 2,098 contracts to come in this morning at 257,621. Yesterday’s feeder cattle volume saw 2,953 contracts trade in the pit and 1,531 contracts trade on Globex. Feeder cattle open interest gained 208 contracts to come in this morning at 26,743.
It was another day of short covering in the CME cattle pits yesterday, which kept prices supported for most of the session. The latest commitment of traders report showed commodity funds net long 9,373 contracts live cattle futures and options a decline of 3,759, commercials were net long 24,127 contracts of live cattle f/o a gain of 2,286, and small specs were net short 33,500 contracts of live cattle f/o a decline of 1,473. In the feeder cattle, funds were net short 246 contracts of F/O a gain of 1,182 from the previous report, commercials were net long 5,496 contracts of F/O a gain of 1,660, and the small specs were net short 5,250 contracts of F/O a gain of 478. As we can see there has been a pretty good transfer of ownership in the last several weeks, with the funds trimming their live cattle long position by about 16,000 contracts since the first of August and actually going from net long 7,389 contracts of feeder cattle futures and options to net short 246 contracts during the same time period. The commercial category has taken the majority of these long positions on the way down. This is another reason why I am going to stay with my theme of putting in a near term low in live and feeder cattle futures, as we are on a $13-$15 break in the market, the last two days of which ended in complete and utter capitulation resulting in limit down moves (i.e. Wednesday and Thursday of last week). We have a big transfer of ownership in the long side of futures from spec’s to commercials, the fundamentals of the market aren’t that bad (at least the fed cattle fundamentals), and everybody in the world in bearish the market. I think you want to be very careful about being short in this type of environment at these price levels, and do so only if you are fading extreme type moves like we saw yesterday when the market is $2 plus higher in the backend of the board for a day or overnight trade. I don’t think the commodity story is over with as there are still supply/demand issues in all these markets going forward, especially the cattle and hogs. I think we saw forced liquidation the last couple of weeks out of commodities because of what was going on in New York, I think there is a plethora of money sitting on the sidelines looking for a home, and I think there is a general lack of confidence in the equities markets right now, which is still going to make tangible investments like commodities look attractive, especially if that commodity has a story behind it.
Yesterday saw a lot of spreading in the fat cattle market with buying the backs and selling the fronts due to less than expected placements in the cattle on feed reports and strength in the corn. The placement story in the on feed report simply showed less lightweight cattle placements for the first quarter of next year, however we all know we have an abundance of big cattle coming off grass in the next several weeks that will be placed into the first quarter of next year. However, here is where the next trap could be, as all the fundamental and numbers guy’s including myself, will be looking at the increase in tonnage we will have for the first quarter of next year and will want to be selling rallies out there, and all of the sudden commodities will get good again, or corn will get good again, and money will be looking for a home and they come and buy the back end of the board like they did earlier in the year. So we all need to be a little careful getting too bearish the cattle market right now. For today I would look for a little lower start to futures trading due to lower overnight markets and a correction from yesterday’s big rally. Support in Oct live cattle should be found at $102, December at $103, and Oct feeders at $106. However, I am not so convinced feeder cattle can hold much strength until the cash feeder market turns around. Call option trading was pretty heavy again in the December live cattle $104-$108 calls, with open interest going up. Option volatility has come down quite a bit the last several weeks, and this might be a good way to play an upside move. Look for a $.10-$.20 lower start to cattle futures trading this morning. Trade Well!!!
Any one wanting a more detailed report on the cattle and beef markets including fundamental, chart and technical analysis, plus spec/hedge recommendations for packers, processors, producers, and meat buyers feel free to contact me by phone or e-mail to set up a free trial.
There is risk in trading futures and options.
Have a Good Day,
Troy Vetterkind
Vetterkind Cattle Brokerage, LLC
Chicago Board of Trade
141 West Jackson Blvd.
Suite 1220A
Chicago, IL 60604
1-888-299-1477 Toll Free
1-312-896-2068 Direct
1-708-224-5985 Mobile
tvetterkind@linngroup.com
Reproduction or rebroadcast of any portion of this information is strictly prohibited without the written permission of the Linn Group, Inc. the information reflected herein is derived from sources believed to be reliable; however, this information is not guaranteed as to its accuracy or completeness. Opinions expressed are subject to change without notice. This material and any view expressed herein are provided for informational purposes only and should not be construed in any way as an inducement to buy or sell commodity futures or options contracts. The Linn Group and its officers, directors, employees and affiliates may take positions for their own accounts in contracts referred to herein. Trading futures involves risk of loss. Past performance is not indicative of future results.
Monday, September 22, 2008
September 22, 2008
Good Morning from the Chicago Board of Trade,
Cash Cattle Situation and Outlook:
We left last week with a mostly neutral to slightly friendly cattle on feed report and a cash fed cattle market that trade steady to $1-$2 lower in the north at $98/$1.50-$1.52 and steady in the south at $99/$1.56. First we will look at the cattle on feed report, where the USDA estimated the number of cattle on feed in the nations feedlots as of Sep 1 at 9.997 mil head or 97% of a year ago (97.9%), placements of cattle during the month of August at 2.061 mil head or 97% of a year ago (100.2%), and fed cattle marketing’s during the month of August at 1.884 mil head or 91% of a year ago (90.3%). Pre-report estimates are in parenthesis. The report is regarded as neutral to slightly friendly as the marketing number came in a little higher than expected (however it was the lowest marketing number for the month of August since the new reporting series began in 1996) and the placement figure came in below most pre-report expectations. Part of the reason for the lower marketing figure can be found in a couple less slaughter days this year when compared to next and we overall have less cattle on feed compared to last year and we are seeing less Canadian fed cattle imports recently when compared to last year. It’s not to say that marketing’s couldn’t be a little more current though, as we are seeing plenty of heavy cattle in the slaughter mix in the northern feeding sections of the country. Looking at the placement numbers, we see placements of cattle weighing 700 lbs and under at 930,000 head, which would be a decline of 155,000 head or 17% from last year, and placements of cattle weighing 700 lbs and over at 1.189 mil head or an increase of 97,000 head or 8% from last year. The increase in heavier weight placements last month would make some sense as we begin to see yearling cattle coming off of grass enter the feedlot mix and the market is still giving incentives to keep light weight cattle out of feedyards and on some sort of back grounding program to put cheap gain on before entering a finishing yard. The report also showed on feed numbers in KS, OK, and TX running 98%, 98%, and 94% of a year ago respectively and numbers on feed in NE running 102% of a year ago, confirming we still need to be marketing cattle more aggressively in the north. I believe most of the report should have been priced in last week, however we could see them come in and bear spread the futures market early this morning due to the light marketing number and the lower lightweight cattle placement number. This would likely present an opportunity, as if we have any kind of marketing hole ahead of us I think it is going to come in late October/early November, and we still have plenty of big cattle coming off of grass to place into the first quarter of next year.
Last weeks cash fed cattle market was considered a victory for the feeder in my opinion given all the concerns over the economy and the wild gyrations in the futures market. Fed cattle trade no worse than steady with the previous week on the southern plains on moderate movement at $99 live and $1.56 dressed. The Nebraska, Colorado, and Iowa market was mostly $1-$2 lower at $97-$98 live and $1.50-$1.51, with a few $1.52 early in the week. Numbers of fed cattle remain very manageable in the southern feeding sections of the country and this helps to support that market. There was a light cleanup trade on Friday at the above mentioned prices and I will report on actual trade volumes tomorrow morning once everything is counted and reported to the USDA. Last weeks feeder cattle market was mostly $2-$5 lower as ample numbers coming to market and worries over the credit crisis kept replacement buyers bidding lower all week long. The slaughter cow market was mostly $1-$2 lower as well, with increased marketing’s and a drop in boneless beef markets weighing on that market. Looking into this week, I would look for a mostly steady to higher cash fed cattle market, with southern values leading the market higher. Showlists will likely be a little smaller in the south and steady to larger in the north. Steady demand for beef and manageable numbers should help to support the fed cattle market again this week. The feeder cattle and cow markets will likely be under some pressure as ample numbers coming to market keeps those markets in check.
Cash Beef Situation and Outlook:
Last weeks cattle slaughter was estimated at 686,000 head, which was 32,000 head above the previous week and 39,000 head above the same week a year ago. The weekly slaughter included a Friday kill of 121,000 head and a Saturday kill of 58,000 head and produced an estimated 537 mil lbs of beef. The boxed beef market was $.20 higher on the choice cutout last week to settle at $160.77 and $.72 higher on the select cutout to settle at $154.33 through Thursday. Sales volume backed off a bit with 956 loads of fabricated cuts sold. Friday saw a lower day in the beef market with the choice cutout closing $.97 lower to settle at $159.80 and the select cutout closing $1.25 lower to settle at $153.08. Sales volume on Friday was light with 258 loads of beef sold (104.83 loads of choice fab cuts, 103.32 loads of select fab cuts, 18.53 loads of trim, 31.28 loads of grinds). The choice/select spread settled at $6.72 a gain of $.28.
The beef market was mostly steady to higher last week on continued buyer support for end meats. There are a couple of things at play here the first being the normal seasonal of more chuck and round meat featuring at the retail level through the fall of the year. Along with that is the fact that the consumer spending dollar is getting stretched and they are looking for lower priced beef items to cook at home as opposed to eating out. Export demand is a supporting factor for the chuck complex as well. Packers are still having problems moving middle meats and this is a drag on the entire carcass value right now, however packers did offer enough discounts on rib and loin meat last week to come into this week with a manageable position to sell. Boneless beef markets were mostly lower last week as grinder demand and ample supplies of 90’s and 50’s kept values under pressure. Look for a modestly lower beef market early this week and steady to higher by the end of the week.
Futures Market Situation and Outlook:
For the week, October live cattle lost $.60 to settle at $101.55, December live cattle lost $.52 to settle at $103.25, and the February live cattle lost $2.37 to settle at $103.17. In the feeder cattle pit last week, September feeder cattle lost $1.65 to settle at $108.25, October feeder cattle lost $3.07 to settle at $105.85, and the November feeder cattle lost $3.47 to settle at $105.30. The reported CME feeder cattle index for 9/18/08 was $109.28 a loss of $.47 for the day and a loss of $1.70 for the week.
Fridays live cattle volume saw 26,975 contracts trade in the pit and 15,883 contracts trade on Globex. Live cattle open interest declined 4,080 contracts to come in this morning at 259,820. Friday’s feeder cattle volume saw 3,340 contracts trade in the pit and 1,778 contracts trade on Globex. Feeder cattle open interest gained 353 contracts to come in this morning at 26,547.
It was a wild week of trading in the CME cattle pits, which was characterized by massive long liquidation linked to fund problems on Wall Street. It was good to see the cash market trade no worse than steady in the south and $1-$2 lower in the north, all of which I think was a supporting factor to the futures market late in the week. We could have put in a near term low in the futures market last week as we forced a lot of people out of the market last week because of money problems and the fundamentals of the market aren’t in all that bad of shape going forward. We might not be out of the woods yet, however we have taken quite a bit of premium out of the market and if we were to trade fed cattle steady to higher this week, last weeks lows should hold. Last weeks low in October live cattle was $100.05 and the low in October feeder cattle was $103.30. I would look to buy something on an early week test of those lows and risk a new low close. If they come out with a big bear spreading program early this week because of the placement and marketing breakdown in the on feed report, I wouldn’t mind taking the other side of that, as I think the best of our fed cattle market will be in Oct/Nov, and we will still be placing a lot of cattle into Jan-April of next year. Look for a $.10-$.20 higher open to live and feeder cattle markets this morning. Trade Well!!!
Any one wanting a more detailed report on the cattle and beef markets including fundamental, chart and technical analysis, plus spec/hedge recommendations for packers, processors, producers, and meat buyers feel free to contact me by phone or e-mail to set up a free trial.
There is risk in trading futures and options.
Have a Good Day,
Troy Vetterkind
Vetterkind Cattle Brokerage, LLC
Chicago Board of Trade
141 West Jackson Blvd.
Suite 1220A
Chicago, IL 60604
1-888-299-1477 Toll Free
1-312-896-2068 Direct
1-708-224-5985 Mobile
tvetterkind@linngroup.com
Reproduction or rebroadcast of any portion of this information is strictly prohibited without the written permission of the Linn Group, Inc. the information reflected herein is derived from sources believed to be reliable; however, this information is not guaranteed as to its accuracy or completeness. Opinions expressed are subject to change without notice. This material and any view expressed herein are provided for informational purposes only and should not be construed in any way as an inducement to buy or sell commodity futures or options contracts. The Linn Group and its officers, directors, employees and affiliates may take positions for their own accounts in contracts referred to herein. Trading futures involves risk of loss. Past performance is not indicative of future results.
Good Morning from the Chicago Board of Trade,
Cash Cattle Situation and Outlook:
We left last week with a mostly neutral to slightly friendly cattle on feed report and a cash fed cattle market that trade steady to $1-$2 lower in the north at $98/$1.50-$1.52 and steady in the south at $99/$1.56. First we will look at the cattle on feed report, where the USDA estimated the number of cattle on feed in the nations feedlots as of Sep 1 at 9.997 mil head or 97% of a year ago (97.9%), placements of cattle during the month of August at 2.061 mil head or 97% of a year ago (100.2%), and fed cattle marketing’s during the month of August at 1.884 mil head or 91% of a year ago (90.3%). Pre-report estimates are in parenthesis. The report is regarded as neutral to slightly friendly as the marketing number came in a little higher than expected (however it was the lowest marketing number for the month of August since the new reporting series began in 1996) and the placement figure came in below most pre-report expectations. Part of the reason for the lower marketing figure can be found in a couple less slaughter days this year when compared to next and we overall have less cattle on feed compared to last year and we are seeing less Canadian fed cattle imports recently when compared to last year. It’s not to say that marketing’s couldn’t be a little more current though, as we are seeing plenty of heavy cattle in the slaughter mix in the northern feeding sections of the country. Looking at the placement numbers, we see placements of cattle weighing 700 lbs and under at 930,000 head, which would be a decline of 155,000 head or 17% from last year, and placements of cattle weighing 700 lbs and over at 1.189 mil head or an increase of 97,000 head or 8% from last year. The increase in heavier weight placements last month would make some sense as we begin to see yearling cattle coming off of grass enter the feedlot mix and the market is still giving incentives to keep light weight cattle out of feedyards and on some sort of back grounding program to put cheap gain on before entering a finishing yard. The report also showed on feed numbers in KS, OK, and TX running 98%, 98%, and 94% of a year ago respectively and numbers on feed in NE running 102% of a year ago, confirming we still need to be marketing cattle more aggressively in the north. I believe most of the report should have been priced in last week, however we could see them come in and bear spread the futures market early this morning due to the light marketing number and the lower lightweight cattle placement number. This would likely present an opportunity, as if we have any kind of marketing hole ahead of us I think it is going to come in late October/early November, and we still have plenty of big cattle coming off of grass to place into the first quarter of next year.
Last weeks cash fed cattle market was considered a victory for the feeder in my opinion given all the concerns over the economy and the wild gyrations in the futures market. Fed cattle trade no worse than steady with the previous week on the southern plains on moderate movement at $99 live and $1.56 dressed. The Nebraska, Colorado, and Iowa market was mostly $1-$2 lower at $97-$98 live and $1.50-$1.51, with a few $1.52 early in the week. Numbers of fed cattle remain very manageable in the southern feeding sections of the country and this helps to support that market. There was a light cleanup trade on Friday at the above mentioned prices and I will report on actual trade volumes tomorrow morning once everything is counted and reported to the USDA. Last weeks feeder cattle market was mostly $2-$5 lower as ample numbers coming to market and worries over the credit crisis kept replacement buyers bidding lower all week long. The slaughter cow market was mostly $1-$2 lower as well, with increased marketing’s and a drop in boneless beef markets weighing on that market. Looking into this week, I would look for a mostly steady to higher cash fed cattle market, with southern values leading the market higher. Showlists will likely be a little smaller in the south and steady to larger in the north. Steady demand for beef and manageable numbers should help to support the fed cattle market again this week. The feeder cattle and cow markets will likely be under some pressure as ample numbers coming to market keeps those markets in check.
Cash Beef Situation and Outlook:
Last weeks cattle slaughter was estimated at 686,000 head, which was 32,000 head above the previous week and 39,000 head above the same week a year ago. The weekly slaughter included a Friday kill of 121,000 head and a Saturday kill of 58,000 head and produced an estimated 537 mil lbs of beef. The boxed beef market was $.20 higher on the choice cutout last week to settle at $160.77 and $.72 higher on the select cutout to settle at $154.33 through Thursday. Sales volume backed off a bit with 956 loads of fabricated cuts sold. Friday saw a lower day in the beef market with the choice cutout closing $.97 lower to settle at $159.80 and the select cutout closing $1.25 lower to settle at $153.08. Sales volume on Friday was light with 258 loads of beef sold (104.83 loads of choice fab cuts, 103.32 loads of select fab cuts, 18.53 loads of trim, 31.28 loads of grinds). The choice/select spread settled at $6.72 a gain of $.28.
The beef market was mostly steady to higher last week on continued buyer support for end meats. There are a couple of things at play here the first being the normal seasonal of more chuck and round meat featuring at the retail level through the fall of the year. Along with that is the fact that the consumer spending dollar is getting stretched and they are looking for lower priced beef items to cook at home as opposed to eating out. Export demand is a supporting factor for the chuck complex as well. Packers are still having problems moving middle meats and this is a drag on the entire carcass value right now, however packers did offer enough discounts on rib and loin meat last week to come into this week with a manageable position to sell. Boneless beef markets were mostly lower last week as grinder demand and ample supplies of 90’s and 50’s kept values under pressure. Look for a modestly lower beef market early this week and steady to higher by the end of the week.
Futures Market Situation and Outlook:
For the week, October live cattle lost $.60 to settle at $101.55, December live cattle lost $.52 to settle at $103.25, and the February live cattle lost $2.37 to settle at $103.17. In the feeder cattle pit last week, September feeder cattle lost $1.65 to settle at $108.25, October feeder cattle lost $3.07 to settle at $105.85, and the November feeder cattle lost $3.47 to settle at $105.30. The reported CME feeder cattle index for 9/18/08 was $109.28 a loss of $.47 for the day and a loss of $1.70 for the week.
Fridays live cattle volume saw 26,975 contracts trade in the pit and 15,883 contracts trade on Globex. Live cattle open interest declined 4,080 contracts to come in this morning at 259,820. Friday’s feeder cattle volume saw 3,340 contracts trade in the pit and 1,778 contracts trade on Globex. Feeder cattle open interest gained 353 contracts to come in this morning at 26,547.
It was a wild week of trading in the CME cattle pits, which was characterized by massive long liquidation linked to fund problems on Wall Street. It was good to see the cash market trade no worse than steady in the south and $1-$2 lower in the north, all of which I think was a supporting factor to the futures market late in the week. We could have put in a near term low in the futures market last week as we forced a lot of people out of the market last week because of money problems and the fundamentals of the market aren’t in all that bad of shape going forward. We might not be out of the woods yet, however we have taken quite a bit of premium out of the market and if we were to trade fed cattle steady to higher this week, last weeks lows should hold. Last weeks low in October live cattle was $100.05 and the low in October feeder cattle was $103.30. I would look to buy something on an early week test of those lows and risk a new low close. If they come out with a big bear spreading program early this week because of the placement and marketing breakdown in the on feed report, I wouldn’t mind taking the other side of that, as I think the best of our fed cattle market will be in Oct/Nov, and we will still be placing a lot of cattle into Jan-April of next year. Look for a $.10-$.20 higher open to live and feeder cattle markets this morning. Trade Well!!!
Any one wanting a more detailed report on the cattle and beef markets including fundamental, chart and technical analysis, plus spec/hedge recommendations for packers, processors, producers, and meat buyers feel free to contact me by phone or e-mail to set up a free trial.
There is risk in trading futures and options.
Have a Good Day,
Troy Vetterkind
Vetterkind Cattle Brokerage, LLC
Chicago Board of Trade
141 West Jackson Blvd.
Suite 1220A
Chicago, IL 60604
1-888-299-1477 Toll Free
1-312-896-2068 Direct
1-708-224-5985 Mobile
tvetterkind@linngroup.com
Reproduction or rebroadcast of any portion of this information is strictly prohibited without the written permission of the Linn Group, Inc. the information reflected herein is derived from sources believed to be reliable; however, this information is not guaranteed as to its accuracy or completeness. Opinions expressed are subject to change without notice. This material and any view expressed herein are provided for informational purposes only and should not be construed in any way as an inducement to buy or sell commodity futures or options contracts. The Linn Group and its officers, directors, employees and affiliates may take positions for their own accounts in contracts referred to herein. Trading futures involves risk of loss. Past performance is not indicative of future results.
Friday, September 19, 2008
September 19, 2008
Good Morning from the Chicago Board of Trade,
Cash Cattle Situation and Outlook:
The cash fed cattle market turned active yesterday at mostly steady money with the week before. Cash cattle ended up trading at $99 live and $1.56 dressed in Texas/Oklahoma and Kansas yesterday afternoon. The market was mostly $98 live in Colorado and they finished up selling cattle in Nebraska at $98-$99 live and $1.50-$1.51 dressed. Sales volumes look pretty good and given everything that was going on in the financial markets this week, a steady market should be considered a victory for the cattle feeder. Going home for the weekend feeder cattle and slaughter cow markets are on the defensive and I would look for that trend to continue into early next week. As far as the fed cattle market goes, I will look for a steady to higher market for next week.
Cash Beef Situation and Outlook:
Yesterday’s cattle kill was estimated at 122,000 head, which would be 6,000 head below last week and the same day a year ago. The week-to-date kill now stands at 503,000 head, which would be 7,000 head below the same period a week ago with the industry looking for a 670,000 head production week. The boxed beef market was mixed yesterday with the choice cutout closing $.44 lower to settle at $160.77 and the select cutout closing $.06 higher to settle at $154.33. Sales volume was light with 269 loads of beef sold (113.74 loads of choice fab cuts, 77.39 loads of select fab cuts, 23.55 loads of trim, 53.83 loads of grinds). The choice/select spread settled at $6.44 a loss of $.50.
The beef market was mostly steady yesterday as weakness in middle meats was offset by strength in end meats. There is a good steady call for chuck and round meat going into domestic and retail channels. Choice rib cuts were higher yesterday, however packer cite they still have a little problem moving loin meat. The beef market feels in pretty good shape for the time being and I will call for steady to higher prices into early next week.
Futures Market Situation and Outlook:
October live cattle settled at $100.50 a loss of $2.10, December live cattle settled at $101.72 a loss of $2.32, and the February live cattle settled at $101.70 a loss of $2.05. In the feeder cattle pit, September feeder cattle settled at $107.30 a loss of $.70, October feeder cattle settled at $104.17 a loss of $2.12, and the November feeder cattle settled at $103.82 a loss of $2.05. The reported CME feeder cattle index for 9/17/08 was $109.75 a loss of $.18.
Yesterdays live cattle volume saw 52,613 contracts trade in the pit and 24,107 contracts trade on Globex. Live cattle open interest declined 9,149 contracts yesterday to come in this morning at 263,963. Yesterday’s feeder cattle volume saw 6,973 contracts trade in the pit and 1,164 contracts trade on Globex. Feeder cattle open interest declined 376 contracts to come in this morning at 26,190.
Massive fund liquidation yesterday linked to further problems with Wall Street firms sent some live and most feeder cattle contracts limit down yesterday. Live cattle open interest was down 9,000 contracts after yesterday’s session as fund accounts were being forced out of the market. As I said earlier in the week, cash traders shouldn’t worry about what the futures were doing this week as problems in the financial world were dictating cattle futures price direction and not fundamentals. The fundamentals of the fed cattle market are actually in fairly good shape, and it was good to see both packers and feeders agree to mostly steady pricing on cattle inventories this week. The futures certainly got too cheap in my opinion yesterday, and with the Government bail out being proposed early this morning, the stock is trading sharply higher this morning and we can expect to see the same in live and feeder cattle futures. The market will now focus on the cattle on feed report set to be released after the close of trading today. Estimates for the report are as follows, on feed Sep 1, 97.9%, placed during August 100.2%, and marketed during August 90.3%. I would think that the market has most of this priced in already, and if anything I think the placement number and the marketing number could be a little light. Look for a $.50-$1.00 higher open to the futures market today and we will see if we can hold onto the rally today, I think we should be able to. Have a Good Weekend and Trade Well!!!
Any one wanting a more detailed report on the cattle and beef markets including fundamental, chart and technical analysis, plus spec/hedge recommendations for packers, processors, producers, and meat buyers feel free to contact me by phone or e-mail to set up a free trial.
There is risk in trading futures and options.
Have a Good Day,
Troy Vetterkind
Vetterkind Cattle Brokerage, LLC
Chicago Board of Trade
141 West Jackson Blvd.
Suite 1220A
Chicago, IL 60604
1-888-299-1477 Toll Free
1-312-896-2068 Direct
1-708-224-5985 Mobile
tvetterkind@linngroup.com
Reproduction or rebroadcast of any portion of this information is strictly prohibited without the written permission of the Linn Group, Inc. the information reflected herein is derived from sources believed to be reliable; however, this information is not guaranteed as to its accuracy or completeness. Opinions expressed are subject to change without notice. This material and any view expressed herein are provided for informational purposes only and should not be construed in any way as an inducement to buy or sell commodity futures or options contracts. The Linn Group and its officers, directors, employees and affiliates may take positions for their own accounts in contracts referred to herein. Trading futures involves risk of loss. Past performance is not indicative of future results.
Good Morning from the Chicago Board of Trade,
Cash Cattle Situation and Outlook:
The cash fed cattle market turned active yesterday at mostly steady money with the week before. Cash cattle ended up trading at $99 live and $1.56 dressed in Texas/Oklahoma and Kansas yesterday afternoon. The market was mostly $98 live in Colorado and they finished up selling cattle in Nebraska at $98-$99 live and $1.50-$1.51 dressed. Sales volumes look pretty good and given everything that was going on in the financial markets this week, a steady market should be considered a victory for the cattle feeder. Going home for the weekend feeder cattle and slaughter cow markets are on the defensive and I would look for that trend to continue into early next week. As far as the fed cattle market goes, I will look for a steady to higher market for next week.
Cash Beef Situation and Outlook:
Yesterday’s cattle kill was estimated at 122,000 head, which would be 6,000 head below last week and the same day a year ago. The week-to-date kill now stands at 503,000 head, which would be 7,000 head below the same period a week ago with the industry looking for a 670,000 head production week. The boxed beef market was mixed yesterday with the choice cutout closing $.44 lower to settle at $160.77 and the select cutout closing $.06 higher to settle at $154.33. Sales volume was light with 269 loads of beef sold (113.74 loads of choice fab cuts, 77.39 loads of select fab cuts, 23.55 loads of trim, 53.83 loads of grinds). The choice/select spread settled at $6.44 a loss of $.50.
The beef market was mostly steady yesterday as weakness in middle meats was offset by strength in end meats. There is a good steady call for chuck and round meat going into domestic and retail channels. Choice rib cuts were higher yesterday, however packer cite they still have a little problem moving loin meat. The beef market feels in pretty good shape for the time being and I will call for steady to higher prices into early next week.
Futures Market Situation and Outlook:
October live cattle settled at $100.50 a loss of $2.10, December live cattle settled at $101.72 a loss of $2.32, and the February live cattle settled at $101.70 a loss of $2.05. In the feeder cattle pit, September feeder cattle settled at $107.30 a loss of $.70, October feeder cattle settled at $104.17 a loss of $2.12, and the November feeder cattle settled at $103.82 a loss of $2.05. The reported CME feeder cattle index for 9/17/08 was $109.75 a loss of $.18.
Yesterdays live cattle volume saw 52,613 contracts trade in the pit and 24,107 contracts trade on Globex. Live cattle open interest declined 9,149 contracts yesterday to come in this morning at 263,963. Yesterday’s feeder cattle volume saw 6,973 contracts trade in the pit and 1,164 contracts trade on Globex. Feeder cattle open interest declined 376 contracts to come in this morning at 26,190.
Massive fund liquidation yesterday linked to further problems with Wall Street firms sent some live and most feeder cattle contracts limit down yesterday. Live cattle open interest was down 9,000 contracts after yesterday’s session as fund accounts were being forced out of the market. As I said earlier in the week, cash traders shouldn’t worry about what the futures were doing this week as problems in the financial world were dictating cattle futures price direction and not fundamentals. The fundamentals of the fed cattle market are actually in fairly good shape, and it was good to see both packers and feeders agree to mostly steady pricing on cattle inventories this week. The futures certainly got too cheap in my opinion yesterday, and with the Government bail out being proposed early this morning, the stock is trading sharply higher this morning and we can expect to see the same in live and feeder cattle futures. The market will now focus on the cattle on feed report set to be released after the close of trading today. Estimates for the report are as follows, on feed Sep 1, 97.9%, placed during August 100.2%, and marketed during August 90.3%. I would think that the market has most of this priced in already, and if anything I think the placement number and the marketing number could be a little light. Look for a $.50-$1.00 higher open to the futures market today and we will see if we can hold onto the rally today, I think we should be able to. Have a Good Weekend and Trade Well!!!
Any one wanting a more detailed report on the cattle and beef markets including fundamental, chart and technical analysis, plus spec/hedge recommendations for packers, processors, producers, and meat buyers feel free to contact me by phone or e-mail to set up a free trial.
There is risk in trading futures and options.
Have a Good Day,
Troy Vetterkind
Vetterkind Cattle Brokerage, LLC
Chicago Board of Trade
141 West Jackson Blvd.
Suite 1220A
Chicago, IL 60604
1-888-299-1477 Toll Free
1-312-896-2068 Direct
1-708-224-5985 Mobile
tvetterkind@linngroup.com
Reproduction or rebroadcast of any portion of this information is strictly prohibited without the written permission of the Linn Group, Inc. the information reflected herein is derived from sources believed to be reliable; however, this information is not guaranteed as to its accuracy or completeness. Opinions expressed are subject to change without notice. This material and any view expressed herein are provided for informational purposes only and should not be construed in any way as an inducement to buy or sell commodity futures or options contracts. The Linn Group and its officers, directors, employees and affiliates may take positions for their own accounts in contracts referred to herein. Trading futures involves risk of loss. Past performance is not indicative of future results.
Thursday, September 18, 2008
September 18, 2008
Good Morning from the Chicago Board of Trade,
Cash Cattle Situation and Outlook:
There was nothing going on in the cash fed cattle trade yesterday as the first real packer bids of the week came out at $97 in the south and $96/$1.51 in the north with feedlot offering prices remaining dollars higher at $102-$103 live and $1.60 plus dressed. There were a few cattle that have changed hands in eastern Nebraska and western Iowa for $1.51-$1.52 dressed. Not much has changed fundamentally on the cash side, showlists are mostly smaller in the south and a little larger in the north. Packers have ample contract and formula cattle in their northern plants and not as many in their southern plants. The futures have been all over the place since the first of the week, which keeps a lot of uncertainty in the market, however it is my opinion that the futures shouldn’t have all that much bearing on this weeks cash market as the futures market is dealing with fund liquidity problems linked to problems on Wall Street. As a matter of fact, we could still lose another $1-$2 in the futures and still not hurt the cash market as we would just be narrowing an already wide basis. Holding October futures above $102 keep a positive spin on the cash market for this week, where we should be able to trade fat cattle at $99 in the south and $98/$1.52 in the north.
Fed cattle selling through the sale barns are bringing mostly steady money with Sioux Falls, SD calling their market that way yesterday. Tops on the beef fat yesterday in Sioux Falls were noted at $92-$94 and on the Holstein steers at $82-$85. Slaughter cows have been lower for much of the week and they were off $1-$2 in Sioux Falls yesterday with the cutter and boning utility cows bringing $50-$60 and the breakers and whites bringing $60-$64. Feeder cattle are lower in just about every sale throughout the country and La Junta, CO was no exception where they were calling their market $2-$3 lower yesterday. The bulk of the medium/large frame #1-#2 feeder steers weighing 600 lbs-800 lbs in La Junta yesterday were bringing $104-$113. There are several large strings of yearling cattle coming off grass hitting many northern plains sale barns and this is, and will continue to keep pressure on the cash feeder cattle market and the CME feeder cattle index for several weeks to come. Wild swings in the commodity, equity, and credit markets doesn’t help cash feeder cattle values right now either.
Cash Beef Situation and Outlook:
Yesterday’s cattle kill was estimated at 127,000 head, which would be 1,000 head below last week and 8,000 head above the same day a year ago. The week-to-date kill now stands at 381,000 head, which would be 1,000 head below the same period a week ago with the industry looking for a 670,000 head production week. The boxed beef market was higher yesterday with the choice cutout closing $.46 higher to settle at $161.21 and the select cutout closing $.25 higher to settle at $154.27. Sales volume was moderate with 281 loads of beef sold (86.79 loads of choice fab cuts, 107.52 loads of select fab cuts, 14.87 loads of trim, 71.52 loads of grinds). The choice/select spread settled at $6.94 a gain of $.21.
The beef market was higher yesterday on what was said to be solid demand for end meats from domestic retail buyers. Most items throughout the chuck and round primal were trading at higher money; some instances sharply higher, as seasonal factors have kicked in demand for end meats. There is also continued export buying of chuck rolls and short ribs, which helps keep the chuck complex supported. Middle meats continue to lag as buying interest for ribs and loins for end of the year holidays has yet to kick in. Boneless beef markets were lower yesterday with increasing supplies weighing down prices there. Given everything that is going on in the economy, the beef market and demand are holding up pretty good and I will continue to look for a steady to higher market going into next week. Export sales for the week of September 5-11, 2008 are as follows:
Beef: Net sales of 9,900 MT were primarily for South Korea (3,100 MT), Canada (1,700 MT), Vietnam (1,600 MT), Japan (1,300 MT), and Mexico (700 MT). Exports of 13,600 MT were mainly to Mexico (5,100 MT), South Korea (4,400 MT), Canada (1,400 MT), Japan (1,000 MT), Vietnam (700 MT), and Russia (400 MT).
Futures Market Situation and Outlook:
October live cattle settled at $102.60 a loss of $.15, December live cattle settled at $104.05 a loss of $.57, and the February live cattle settled at $103.75 a gain of $.02. In the feeder cattle pit, September feeder cattle settled at $108.00 a loss of $.90, October feeder cattle settled at $106.30 a loss of $1.37, and the November feeder cattle settled at $105.87 a loss of $1.72. The reported CME feeder cattle index for 9/16/08 was $109.93 a loss of $.11.
Yesterday’s live cattle volume saw 37,430 contracts trade in the pit and 15,366 contracts trade on Globex. Live cattle open interest declined 2,375 contracts to come in this morning at 274,229. Yesterday’s feeder cattle volume saw 4,701 contract trade in the pit and 1,477 contracts trade on Globex. Feeder cattle open interest declined 187 contracts to come in this morning at 26,625.
It was another wild day in the CME cattle pits yesterday as more liquidity problems throughout the financial industry took futures from a higher early trade to sharply lower on the day only to come back late in the session on short covering and bargain hunting. It was a big spread day with accounts buying April and June live cattle and selling December. There was also quite a bit of short Dec and long Feb positions being put on yesterday. With all the wild moves this week, we are basically right back where we started on Monday morning, and in the case of the October live cattle contract, we are actually $.45 higher on the week, which makes one think that cash fed cattle should be no worse than steady this week. As outlined above, the cash fundamentals of the market (i.e. numbers of fed cattle (with the exception of a few more cattle up north) and the beef) aren’t in all that bad of shape. There is a big competition down here in Chicago to see who can be the most bearish on the cattle market; however despite everyone’s best efforts they can’t seem to break the market really hard from current price levels. It’s not to say it can’t happen at some point in time, but I think if it did it would be short lived. Perhaps a scenario like the cash market coming in a couple dollars lower on a week when we all think it should be higher and you break the futures really hard, that’s when it would be time to buy it with both hands. For the rest of this week, $102 in October live cattle and $103 in December live cattle will be big areas of support. Taking them out on a closing basis would certainly open the door for another $1-$3 lower in my opinion. Feeder cattle were a mess yesterday and we are now approaching contract lows of $104 in both Oct and Nov. As mentioned yesterday, this would probably be a good place to take some profits on short positions and roll them into cheap puts. October puts seem pretty reasonably priced at the current time. You could also buy some cheap October feeder cattle puts and use them as protection to buy futures against contract lows. The CME index will probably find some support at $105 and the futures are already there. Estimates for this Friday’s cattle on feed report were released yesterday with the market looking for on feed Sep 1, 97.9%, placed during the month of August at 100.2%, and marketed during the month of August at 90.3%. If anything the placement number maybe looks a little light as does the marketing number. Look for a $.10-$.20 higher open to live and feeder cattle futures this morning. Trade Well!!!
Any one wanting a more detailed report on the cattle and beef markets including fundamental, chart and technical analysis, plus spec/hedge recommendations for packers, processors, producers, and meat buyers feel free to contact me by phone or e-mail to set up a free trial.
There is risk in trading futures and options.
Have a Good Day,
Troy Vetterkind
Vetterkind Cattle Brokerage, LLC
Chicago Board of Trade
141 West Jackson Blvd.
Suite 1220A
Chicago, IL 60604
1-888-299-1477 Toll Free
1-312-896-2068 Direct
1-708-224-5985 Mobile
tvetterkind@linngroup.com
Reproduction or rebroadcast of any portion of this information is strictly prohibited without the written permission of the Linn Group, Inc. the information reflected herein is derived from sources believed to be reliable; however, this information is not guaranteed as to its accuracy or completeness. Opinions expressed are subject to change without notice. This material and any view expressed herein are provided for informational purposes only and should not be construed in any way as an inducement to buy or sell commodity futures or options contracts. The Linn Group and its officers, directors, employees and affiliates may take positions for their own accounts in contracts referred to herein. Trading futures involves risk of loss. Past performance is not indicative of future results.
Good Morning from the Chicago Board of Trade,
Cash Cattle Situation and Outlook:
There was nothing going on in the cash fed cattle trade yesterday as the first real packer bids of the week came out at $97 in the south and $96/$1.51 in the north with feedlot offering prices remaining dollars higher at $102-$103 live and $1.60 plus dressed. There were a few cattle that have changed hands in eastern Nebraska and western Iowa for $1.51-$1.52 dressed. Not much has changed fundamentally on the cash side, showlists are mostly smaller in the south and a little larger in the north. Packers have ample contract and formula cattle in their northern plants and not as many in their southern plants. The futures have been all over the place since the first of the week, which keeps a lot of uncertainty in the market, however it is my opinion that the futures shouldn’t have all that much bearing on this weeks cash market as the futures market is dealing with fund liquidity problems linked to problems on Wall Street. As a matter of fact, we could still lose another $1-$2 in the futures and still not hurt the cash market as we would just be narrowing an already wide basis. Holding October futures above $102 keep a positive spin on the cash market for this week, where we should be able to trade fat cattle at $99 in the south and $98/$1.52 in the north.
Fed cattle selling through the sale barns are bringing mostly steady money with Sioux Falls, SD calling their market that way yesterday. Tops on the beef fat yesterday in Sioux Falls were noted at $92-$94 and on the Holstein steers at $82-$85. Slaughter cows have been lower for much of the week and they were off $1-$2 in Sioux Falls yesterday with the cutter and boning utility cows bringing $50-$60 and the breakers and whites bringing $60-$64. Feeder cattle are lower in just about every sale throughout the country and La Junta, CO was no exception where they were calling their market $2-$3 lower yesterday. The bulk of the medium/large frame #1-#2 feeder steers weighing 600 lbs-800 lbs in La Junta yesterday were bringing $104-$113. There are several large strings of yearling cattle coming off grass hitting many northern plains sale barns and this is, and will continue to keep pressure on the cash feeder cattle market and the CME feeder cattle index for several weeks to come. Wild swings in the commodity, equity, and credit markets doesn’t help cash feeder cattle values right now either.
Cash Beef Situation and Outlook:
Yesterday’s cattle kill was estimated at 127,000 head, which would be 1,000 head below last week and 8,000 head above the same day a year ago. The week-to-date kill now stands at 381,000 head, which would be 1,000 head below the same period a week ago with the industry looking for a 670,000 head production week. The boxed beef market was higher yesterday with the choice cutout closing $.46 higher to settle at $161.21 and the select cutout closing $.25 higher to settle at $154.27. Sales volume was moderate with 281 loads of beef sold (86.79 loads of choice fab cuts, 107.52 loads of select fab cuts, 14.87 loads of trim, 71.52 loads of grinds). The choice/select spread settled at $6.94 a gain of $.21.
The beef market was higher yesterday on what was said to be solid demand for end meats from domestic retail buyers. Most items throughout the chuck and round primal were trading at higher money; some instances sharply higher, as seasonal factors have kicked in demand for end meats. There is also continued export buying of chuck rolls and short ribs, which helps keep the chuck complex supported. Middle meats continue to lag as buying interest for ribs and loins for end of the year holidays has yet to kick in. Boneless beef markets were lower yesterday with increasing supplies weighing down prices there. Given everything that is going on in the economy, the beef market and demand are holding up pretty good and I will continue to look for a steady to higher market going into next week. Export sales for the week of September 5-11, 2008 are as follows:
Beef: Net sales of 9,900 MT were primarily for South Korea (3,100 MT), Canada (1,700 MT), Vietnam (1,600 MT), Japan (1,300 MT), and Mexico (700 MT). Exports of 13,600 MT were mainly to Mexico (5,100 MT), South Korea (4,400 MT), Canada (1,400 MT), Japan (1,000 MT), Vietnam (700 MT), and Russia (400 MT).
Futures Market Situation and Outlook:
October live cattle settled at $102.60 a loss of $.15, December live cattle settled at $104.05 a loss of $.57, and the February live cattle settled at $103.75 a gain of $.02. In the feeder cattle pit, September feeder cattle settled at $108.00 a loss of $.90, October feeder cattle settled at $106.30 a loss of $1.37, and the November feeder cattle settled at $105.87 a loss of $1.72. The reported CME feeder cattle index for 9/16/08 was $109.93 a loss of $.11.
Yesterday’s live cattle volume saw 37,430 contracts trade in the pit and 15,366 contracts trade on Globex. Live cattle open interest declined 2,375 contracts to come in this morning at 274,229. Yesterday’s feeder cattle volume saw 4,701 contract trade in the pit and 1,477 contracts trade on Globex. Feeder cattle open interest declined 187 contracts to come in this morning at 26,625.
It was another wild day in the CME cattle pits yesterday as more liquidity problems throughout the financial industry took futures from a higher early trade to sharply lower on the day only to come back late in the session on short covering and bargain hunting. It was a big spread day with accounts buying April and June live cattle and selling December. There was also quite a bit of short Dec and long Feb positions being put on yesterday. With all the wild moves this week, we are basically right back where we started on Monday morning, and in the case of the October live cattle contract, we are actually $.45 higher on the week, which makes one think that cash fed cattle should be no worse than steady this week. As outlined above, the cash fundamentals of the market (i.e. numbers of fed cattle (with the exception of a few more cattle up north) and the beef) aren’t in all that bad of shape. There is a big competition down here in Chicago to see who can be the most bearish on the cattle market; however despite everyone’s best efforts they can’t seem to break the market really hard from current price levels. It’s not to say it can’t happen at some point in time, but I think if it did it would be short lived. Perhaps a scenario like the cash market coming in a couple dollars lower on a week when we all think it should be higher and you break the futures really hard, that’s when it would be time to buy it with both hands. For the rest of this week, $102 in October live cattle and $103 in December live cattle will be big areas of support. Taking them out on a closing basis would certainly open the door for another $1-$3 lower in my opinion. Feeder cattle were a mess yesterday and we are now approaching contract lows of $104 in both Oct and Nov. As mentioned yesterday, this would probably be a good place to take some profits on short positions and roll them into cheap puts. October puts seem pretty reasonably priced at the current time. You could also buy some cheap October feeder cattle puts and use them as protection to buy futures against contract lows. The CME index will probably find some support at $105 and the futures are already there. Estimates for this Friday’s cattle on feed report were released yesterday with the market looking for on feed Sep 1, 97.9%, placed during the month of August at 100.2%, and marketed during the month of August at 90.3%. If anything the placement number maybe looks a little light as does the marketing number. Look for a $.10-$.20 higher open to live and feeder cattle futures this morning. Trade Well!!!
Any one wanting a more detailed report on the cattle and beef markets including fundamental, chart and technical analysis, plus spec/hedge recommendations for packers, processors, producers, and meat buyers feel free to contact me by phone or e-mail to set up a free trial.
There is risk in trading futures and options.
Have a Good Day,
Troy Vetterkind
Vetterkind Cattle Brokerage, LLC
Chicago Board of Trade
141 West Jackson Blvd.
Suite 1220A
Chicago, IL 60604
1-888-299-1477 Toll Free
1-312-896-2068 Direct
1-708-224-5985 Mobile
tvetterkind@linngroup.com
Reproduction or rebroadcast of any portion of this information is strictly prohibited without the written permission of the Linn Group, Inc. the information reflected herein is derived from sources believed to be reliable; however, this information is not guaranteed as to its accuracy or completeness. Opinions expressed are subject to change without notice. This material and any view expressed herein are provided for informational purposes only and should not be construed in any way as an inducement to buy or sell commodity futures or options contracts. The Linn Group and its officers, directors, employees and affiliates may take positions for their own accounts in contracts referred to herein. Trading futures involves risk of loss. Past performance is not indicative of future results.
Wednesday, September 17, 2008
September 17, 2008
Good Morning from the Chicago Board of Trade,
Cash Cattle Situation and Outlook:
The cash cattle market was quiet yesterday with trade confined to that of contract cattle and sale barn cattle. There were no packer bids being reported as of late last night with cattle feeders remaining priced at $102-$103 live and $1.62 dressed. A late week trade is expected with prices no worse than steady in the south and steady to a little lower in the north. Showlist numbers are a little larger in some of the northern feeding states and smaller in the south, which will give southern feeders some bargaining power in this week’s price negotiation and should make that market premium to the north. For right now I will still call for a $99 live trade in the south and $98/$1.52 in the north. Fat cattle selling in the auction markets are mostly steady with last week with $93-$94 tops noted on the beef fats. Feeder cattle markets are mostly $1-$2 lower across the country as we work our way through the end of summer grass run of yearling cattle. Slaughter cow markets are steady to a little lower as we start to see more cows coming to market towards the end of summer. Continue to look for a softer trend in the feeder cattle and slaughter cow markets for another couple of weeks.
Cash Beef Situation and Outlook:
Yesterday’s kill was estimated at 126,000 head, which would be 1,000 head below last week and 4,000 head below the same day a year ago. The week-to-date cattle slaughter stands at 254,000 head, which would be steady with the same period last week. The boxed beef market was mixed with the choice cutout closing $.08 lower to settle at $160.75 and the select cutout closing $.50 higher to settle at $154.02. Sales volume was light with 224 loads of beef sold (72.05 loads of choice fab cuts, 101.41 loads of select fab cuts, 5.47 loads of trim, 45.27 loads of grinds). The choice/select spread settled at $6.73 a loss of $.58.
The beef market was pretty quiet again yesterday as participants try to gauge demand given what is going on with the latest news about the economy and the aftermath of the weekend storm. Given both scenarios, spot market demand is rather light, however wherever discounts are offered from the packing plant on certain items, buyers seem eager to take advantage. During yesterday’s session there was some active trading taking place on choice, select, and no-roll rib, chuck, and round items all of which appeared to take place at higher money. The drag on the market was loin cuts, where short loins, strip loins, and PSMO’s were all under pressure. The boneless beef market was moderately lower yesterday, with 50’s losing more than the 90’s. There will be a little more pressure in the boneless market in weeks to come, as an increase in the domestic cow kill, along with the higher U.S. dollar the last couple of weeks, which will entice more imports of boneless manufacturing beef, will keep pressure on that market. The rest of the complex should be in fairly good shape going forward, as dwindling fed cattle supplies and increased demand, both foreign and domestic, should support beef values going into November. Continue to look for steady to higher in the beef market for the rest of the week.
Futures Market Situation and Outlook:
October live cattle settled at $102.75 a loss of $1.00, December live cattle settled at $104.62 a loss of $.70, and the February live cattle settled at $103.72 a loss of $2.02. In the feeder cattle pit, September feeder cattle settled at $108.90 a loss of $.80, October feeder cattle settled at $107.67 a loss of $1.15, and the November feeder cattle settled at $107.60 a loss of $1.27. The reported CME feeder cattle index for 9/15/08 was $110.04 a loss of $.39.
Yesterdays live cattle volume saw 44,150 contracts trade in the pit and 21,197 contracts trade on Globex. Live cattle open interest declined 1,759 contracts to come in this morning at 276,655. Yesterday’s feeder cattle volume saw 4,090 contracts trade in the pit and 1,494 trade on Globex. Feeder cattle open interest declined 337 contracts to come in this morning at 26,824.
The futures market was under a lot of turmoil again yesterday; too which I think most of it was linked to what was going on in the financial sectors of the market. We had a huge short covering rally on Monday as the futures opened sharply lower and couldn’t get through last weeks low’s, and probably rallied too much going into the close as participant’s couldn’t figure out why the market was rallying and wanted out. With that said, and all of the bearish news out about the world coming to an end yesterday morning, the market opened sharply lower and never looked back until the end of the day when we saw a pretty good short covering rally develop again. The bottom line to this erratic behavior of the live and feeder cattle futures market the last couple of day’s is that more of these fund guy’s are in trouble with there other investment’s in the equity world, and are being forced out of their commodity trade’s, (trade’s by the way that were making them money), in order to finance what they lost in the other sectors of the economy. We are on a huge break in price and open interest in both live and feeder cattle futures (i.e. –20,000 plus in LC open interest, -5,000 plus in feeder cattle open interest, and - $10-$15 cwt plus in flat price on both). The point being if you are selling this stuff because of what’s going on in unrelated markets, you’re probably going to be wrong in the long run. But when you are in a liquidating market, whether its corn, beans, oil, or cattle you have to get out of the way and let the market settle out before you can come back to trading fundamentals. For the rest of this week, it looks like perhaps the stock market might have found a little stability as the government seems to be going to step in and save AIG from bankruptcy. This had both Dow and S&P futures rallying late in the day yesterday and closing higher. So far this week we have managed to hold last week’s low of $101.35 in October live cattle and $102.40 in December live cattle and these will be very important price points for the rest of this week’s trading. If you’re bullish I would buy down against this support and risk a new low close for the week, and if you’re bearish I would have sell stops underneath these price points to get short. The feeder cattle are a different story as this market looks weak closing into new lows for the latest move down. Anymore in the feeder cattle it appears like we are not going to get any kind of short covering bounce and instead will go and test old contract lows of $104.30 in the October and $103.80 in the November. For those of you still short from the $118-$119 area basis Oct and Nov feeders, I would look to cover shorts on any $1-$2 move lower from yesterday’s settlements, and wouldn’t mind taking a shot at the long side against the above mentioned contract lows, risking a new contract low on a closing basis. Look for a $.10-$.20 higher open this morning in live and feeder cattle futures and we will see if we can hold onto any early strength. Trade Well!!!
Any one wanting a more detailed report on the cattle and beef markets including fundamental, chart and technical analysis, plus spec/hedge recommendations for packers, processors, producers, and meat buyers feel free to contact me by phone or e-mail to set up a free trial.
There is risk in trading futures and options.
Have a Good Day,
Troy Vetterkind
Vetterkind Cattle Brokerage, LLC
Chicago Board of Trade
141 West Jackson Blvd.
Suite 1220A
Chicago, IL 60604
1-888-299-1477 Toll Free
1-312-896-2068 Direct
1-708-224-5985 Mobile
tvetterkind@linngroup.com
Reproduction or rebroadcast of any portion of this information is strictly prohibited without the written permission of the Linn Group, Inc. the information reflected herein is derived from sources believed to be reliable; however, this information is not guaranteed as to its accuracy or completeness. Opinions expressed are subject to change without notice. This material and any view expressed herein are provided for informational purposes only and should not be construed in any way as an inducement to buy or sell commodity futures or options contracts. The Linn Group and its officers, directors, employees and affiliates may take positions for their own accounts in contracts referred to herein. Trading futures involves risk of loss. Past performance is not indicative of future results.
Good Morning from the Chicago Board of Trade,
Cash Cattle Situation and Outlook:
The cash cattle market was quiet yesterday with trade confined to that of contract cattle and sale barn cattle. There were no packer bids being reported as of late last night with cattle feeders remaining priced at $102-$103 live and $1.62 dressed. A late week trade is expected with prices no worse than steady in the south and steady to a little lower in the north. Showlist numbers are a little larger in some of the northern feeding states and smaller in the south, which will give southern feeders some bargaining power in this week’s price negotiation and should make that market premium to the north. For right now I will still call for a $99 live trade in the south and $98/$1.52 in the north. Fat cattle selling in the auction markets are mostly steady with last week with $93-$94 tops noted on the beef fats. Feeder cattle markets are mostly $1-$2 lower across the country as we work our way through the end of summer grass run of yearling cattle. Slaughter cow markets are steady to a little lower as we start to see more cows coming to market towards the end of summer. Continue to look for a softer trend in the feeder cattle and slaughter cow markets for another couple of weeks.
Cash Beef Situation and Outlook:
Yesterday’s kill was estimated at 126,000 head, which would be 1,000 head below last week and 4,000 head below the same day a year ago. The week-to-date cattle slaughter stands at 254,000 head, which would be steady with the same period last week. The boxed beef market was mixed with the choice cutout closing $.08 lower to settle at $160.75 and the select cutout closing $.50 higher to settle at $154.02. Sales volume was light with 224 loads of beef sold (72.05 loads of choice fab cuts, 101.41 loads of select fab cuts, 5.47 loads of trim, 45.27 loads of grinds). The choice/select spread settled at $6.73 a loss of $.58.
The beef market was pretty quiet again yesterday as participants try to gauge demand given what is going on with the latest news about the economy and the aftermath of the weekend storm. Given both scenarios, spot market demand is rather light, however wherever discounts are offered from the packing plant on certain items, buyers seem eager to take advantage. During yesterday’s session there was some active trading taking place on choice, select, and no-roll rib, chuck, and round items all of which appeared to take place at higher money. The drag on the market was loin cuts, where short loins, strip loins, and PSMO’s were all under pressure. The boneless beef market was moderately lower yesterday, with 50’s losing more than the 90’s. There will be a little more pressure in the boneless market in weeks to come, as an increase in the domestic cow kill, along with the higher U.S. dollar the last couple of weeks, which will entice more imports of boneless manufacturing beef, will keep pressure on that market. The rest of the complex should be in fairly good shape going forward, as dwindling fed cattle supplies and increased demand, both foreign and domestic, should support beef values going into November. Continue to look for steady to higher in the beef market for the rest of the week.
Futures Market Situation and Outlook:
October live cattle settled at $102.75 a loss of $1.00, December live cattle settled at $104.62 a loss of $.70, and the February live cattle settled at $103.72 a loss of $2.02. In the feeder cattle pit, September feeder cattle settled at $108.90 a loss of $.80, October feeder cattle settled at $107.67 a loss of $1.15, and the November feeder cattle settled at $107.60 a loss of $1.27. The reported CME feeder cattle index for 9/15/08 was $110.04 a loss of $.39.
Yesterdays live cattle volume saw 44,150 contracts trade in the pit and 21,197 contracts trade on Globex. Live cattle open interest declined 1,759 contracts to come in this morning at 276,655. Yesterday’s feeder cattle volume saw 4,090 contracts trade in the pit and 1,494 trade on Globex. Feeder cattle open interest declined 337 contracts to come in this morning at 26,824.
The futures market was under a lot of turmoil again yesterday; too which I think most of it was linked to what was going on in the financial sectors of the market. We had a huge short covering rally on Monday as the futures opened sharply lower and couldn’t get through last weeks low’s, and probably rallied too much going into the close as participant’s couldn’t figure out why the market was rallying and wanted out. With that said, and all of the bearish news out about the world coming to an end yesterday morning, the market opened sharply lower and never looked back until the end of the day when we saw a pretty good short covering rally develop again. The bottom line to this erratic behavior of the live and feeder cattle futures market the last couple of day’s is that more of these fund guy’s are in trouble with there other investment’s in the equity world, and are being forced out of their commodity trade’s, (trade’s by the way that were making them money), in order to finance what they lost in the other sectors of the economy. We are on a huge break in price and open interest in both live and feeder cattle futures (i.e. –20,000 plus in LC open interest, -5,000 plus in feeder cattle open interest, and - $10-$15 cwt plus in flat price on both). The point being if you are selling this stuff because of what’s going on in unrelated markets, you’re probably going to be wrong in the long run. But when you are in a liquidating market, whether its corn, beans, oil, or cattle you have to get out of the way and let the market settle out before you can come back to trading fundamentals. For the rest of this week, it looks like perhaps the stock market might have found a little stability as the government seems to be going to step in and save AIG from bankruptcy. This had both Dow and S&P futures rallying late in the day yesterday and closing higher. So far this week we have managed to hold last week’s low of $101.35 in October live cattle and $102.40 in December live cattle and these will be very important price points for the rest of this week’s trading. If you’re bullish I would buy down against this support and risk a new low close for the week, and if you’re bearish I would have sell stops underneath these price points to get short. The feeder cattle are a different story as this market looks weak closing into new lows for the latest move down. Anymore in the feeder cattle it appears like we are not going to get any kind of short covering bounce and instead will go and test old contract lows of $104.30 in the October and $103.80 in the November. For those of you still short from the $118-$119 area basis Oct and Nov feeders, I would look to cover shorts on any $1-$2 move lower from yesterday’s settlements, and wouldn’t mind taking a shot at the long side against the above mentioned contract lows, risking a new contract low on a closing basis. Look for a $.10-$.20 higher open this morning in live and feeder cattle futures and we will see if we can hold onto any early strength. Trade Well!!!
Any one wanting a more detailed report on the cattle and beef markets including fundamental, chart and technical analysis, plus spec/hedge recommendations for packers, processors, producers, and meat buyers feel free to contact me by phone or e-mail to set up a free trial.
There is risk in trading futures and options.
Have a Good Day,
Troy Vetterkind
Vetterkind Cattle Brokerage, LLC
Chicago Board of Trade
141 West Jackson Blvd.
Suite 1220A
Chicago, IL 60604
1-888-299-1477 Toll Free
1-312-896-2068 Direct
1-708-224-5985 Mobile
tvetterkind@linngroup.com
Reproduction or rebroadcast of any portion of this information is strictly prohibited without the written permission of the Linn Group, Inc. the information reflected herein is derived from sources believed to be reliable; however, this information is not guaranteed as to its accuracy or completeness. Opinions expressed are subject to change without notice. This material and any view expressed herein are provided for informational purposes only and should not be construed in any way as an inducement to buy or sell commodity futures or options contracts. The Linn Group and its officers, directors, employees and affiliates may take positions for their own accounts in contracts referred to herein. Trading futures involves risk of loss. Past performance is not indicative of future results.
Tuesday, September 16, 2008
September 16, 2008
Good Morning from the Chicago Board of Trade,
Cash Cattle Situation and Outlook:
Yesterday’s cash fed cattle market was at a standstill as participants spent the day assembling this week’s showlist. Packer bids were not being posted with asking prices form feedlot managers starting the week firm at $102-$103 live and $1.60 dressed. A look at last weeks cash trade shows Texas/Oklahoma feedlots selling 39,407 head of fat cattle for $99 live, Kansas feedlots selling 41,680 head of fed cattle for $99 live and $1.55/$1.56 dressed, Nebraska feedlots selling 56,333 head of fed cattle for $98-$98.50 live and $1.51-$1.52 dressed, Colorado feedlots selling 4,931 head of fed cattle for $98 live and $1.53 dressed, and Iowa/MN feedlots selling 23,698 head of fed cattle for $95-$96 live and $1.50-$1.52 dressed. Feedlot showlists are coming in mostly smaller in the south and a little larger in the north, reflecting the ample supplies of cattle in that part of the country that need to be sold the last couple of weeks. I believe this to be a short term bump in numbers in the north and I would expect market ready cattle to become more manageable in the coming weeks as in the south due to reduced first quarter feedlot placements. The beef market remains in fairly good shape in terms of demand, and this should be a supportive factor in the coming weeks as well, as there should be a seasonal increase in beef buying ahead of us. For right now, I will call for a cash fed cattle trade that is no worse than steady with last week at $99 live in the south and $98/$1.52 in the north.
Cash Beef Situation and Outlook:
Yesterdays kill was estimated at 128,000 head, which would be 1,000 head below last week and even with the same day a year ago. The industry will look for a 670,000 head production week. The boxed beef market was mixed yesterday with the choice cutout closing $.26 higher to settle at $160.83 and the select cutout closing $.09 lower to settle at $153.52. Sales volume was light with 195 loads of beef sold (80.74 loads of choice fab cuts, 80.85 loads of select fab cuts, 9.25 loads of trim, 23.72 loads of grinds). The choice/select spread settled at $7.32 a gain of $.17.
The beef market was mostly steady yesterday as packer inventories and retail/wholesale demand seem to be in balance. Buyers spent most of the day going over inventory positions and assessing demand from over the weekend, where the storm hampered some beef purchasing. I will continue to look for a mostly steady to higher beef market by the end of the week.
Futures Market Situation and Outlook:
October live cattle settled at $103.75 a gain of $1.60, December live cattle settled at $105.32 a gain of $1.55, and the February live cattle settled at $105.75 a gain of $.20. In the feeder cattle pit, September feeder cattle settled at $109.70 a loss of $.20, October feeder cattle settled at $108.82 a loss of $.10, and the November feeder cattle settled at $108.87 a gain of $.10. The reported CME feeder cattle index for 9/12/08 was $110.43 a loss of $.55.
Yesterdays live cattle volume saw 42,032 contracts trade in the pit and 20,792 contracts trade on Globex. Live cattle open interest gained 2,976 contracts to come in this morning at 278,427. Yesterday’s feeder cattle volume saw 3,301 contracts trade in the pit and 1,616 contracts trade on Globex. Feeder cattle open interest declined 275 contracts to come in this morning at 27,161.
Live cattle futures settled sharply higher yesterday on short covering after we couldn’t push through support at yesterday morning’s low. The market is going to be sharply lower on the open on further economic worries and ideas yesterday’s market was overdone. Look for support to come into the market at last week’s low of $101.35 in October live cattle and $102.40 in the December live cattle. Feeder cattle will follow live cattle lower early today, and pushing through $108 basis Oct and Nov feeders will attract more technical selling. Look for a $.50-$.75 lower open to live and feeder cattle futures this morning. Trade Well!!!
Any one wanting a more detailed report on the cattle and beef markets including fundamental, chart and technical analysis, plus spec/hedge recommendations for packers, processors, producers, and meat buyers feel free to contact me by phone or e-mail to set up a free trial.
There is risk in trading futures and options.
Have a Good Day,
Troy Vetterkind
Vetterkind Cattle Brokerage, LLC
Chicago Board of Trade
141 West Jackson Blvd.
Suite 1220A
Chicago, IL 60604
1-888-299-1477 Toll Free
1-312-896-2068 Direct
1-708-224-5985 Mobile
tvetterkind@linngroup.com
Reproduction or rebroadcast of any portion of this information is strictly prohibited without the written permission of the Linn Group, Inc. the information reflected herein is derived from sources believed to be reliable; however, this information is not guaranteed as to its accuracy or completeness. Opinions expressed are subject to change without notice. This material and any view expressed herein are provided for informational purposes only and should not be construed in any way as an inducement to buy or sell commodity futures or options contracts. The Linn Group and its officers, directors, employees and affiliates may take positions for their own accounts in contracts referred to herein. Trading futures involves risk of loss. Past performance is not indicative of future results.
Good Morning from the Chicago Board of Trade,
Cash Cattle Situation and Outlook:
Yesterday’s cash fed cattle market was at a standstill as participants spent the day assembling this week’s showlist. Packer bids were not being posted with asking prices form feedlot managers starting the week firm at $102-$103 live and $1.60 dressed. A look at last weeks cash trade shows Texas/Oklahoma feedlots selling 39,407 head of fat cattle for $99 live, Kansas feedlots selling 41,680 head of fed cattle for $99 live and $1.55/$1.56 dressed, Nebraska feedlots selling 56,333 head of fed cattle for $98-$98.50 live and $1.51-$1.52 dressed, Colorado feedlots selling 4,931 head of fed cattle for $98 live and $1.53 dressed, and Iowa/MN feedlots selling 23,698 head of fed cattle for $95-$96 live and $1.50-$1.52 dressed. Feedlot showlists are coming in mostly smaller in the south and a little larger in the north, reflecting the ample supplies of cattle in that part of the country that need to be sold the last couple of weeks. I believe this to be a short term bump in numbers in the north and I would expect market ready cattle to become more manageable in the coming weeks as in the south due to reduced first quarter feedlot placements. The beef market remains in fairly good shape in terms of demand, and this should be a supportive factor in the coming weeks as well, as there should be a seasonal increase in beef buying ahead of us. For right now, I will call for a cash fed cattle trade that is no worse than steady with last week at $99 live in the south and $98/$1.52 in the north.
Cash Beef Situation and Outlook:
Yesterdays kill was estimated at 128,000 head, which would be 1,000 head below last week and even with the same day a year ago. The industry will look for a 670,000 head production week. The boxed beef market was mixed yesterday with the choice cutout closing $.26 higher to settle at $160.83 and the select cutout closing $.09 lower to settle at $153.52. Sales volume was light with 195 loads of beef sold (80.74 loads of choice fab cuts, 80.85 loads of select fab cuts, 9.25 loads of trim, 23.72 loads of grinds). The choice/select spread settled at $7.32 a gain of $.17.
The beef market was mostly steady yesterday as packer inventories and retail/wholesale demand seem to be in balance. Buyers spent most of the day going over inventory positions and assessing demand from over the weekend, where the storm hampered some beef purchasing. I will continue to look for a mostly steady to higher beef market by the end of the week.
Futures Market Situation and Outlook:
October live cattle settled at $103.75 a gain of $1.60, December live cattle settled at $105.32 a gain of $1.55, and the February live cattle settled at $105.75 a gain of $.20. In the feeder cattle pit, September feeder cattle settled at $109.70 a loss of $.20, October feeder cattle settled at $108.82 a loss of $.10, and the November feeder cattle settled at $108.87 a gain of $.10. The reported CME feeder cattle index for 9/12/08 was $110.43 a loss of $.55.
Yesterdays live cattle volume saw 42,032 contracts trade in the pit and 20,792 contracts trade on Globex. Live cattle open interest gained 2,976 contracts to come in this morning at 278,427. Yesterday’s feeder cattle volume saw 3,301 contracts trade in the pit and 1,616 contracts trade on Globex. Feeder cattle open interest declined 275 contracts to come in this morning at 27,161.
Live cattle futures settled sharply higher yesterday on short covering after we couldn’t push through support at yesterday morning’s low. The market is going to be sharply lower on the open on further economic worries and ideas yesterday’s market was overdone. Look for support to come into the market at last week’s low of $101.35 in October live cattle and $102.40 in the December live cattle. Feeder cattle will follow live cattle lower early today, and pushing through $108 basis Oct and Nov feeders will attract more technical selling. Look for a $.50-$.75 lower open to live and feeder cattle futures this morning. Trade Well!!!
Any one wanting a more detailed report on the cattle and beef markets including fundamental, chart and technical analysis, plus spec/hedge recommendations for packers, processors, producers, and meat buyers feel free to contact me by phone or e-mail to set up a free trial.
There is risk in trading futures and options.
Have a Good Day,
Troy Vetterkind
Vetterkind Cattle Brokerage, LLC
Chicago Board of Trade
141 West Jackson Blvd.
Suite 1220A
Chicago, IL 60604
1-888-299-1477 Toll Free
1-312-896-2068 Direct
1-708-224-5985 Mobile
tvetterkind@linngroup.com
Reproduction or rebroadcast of any portion of this information is strictly prohibited without the written permission of the Linn Group, Inc. the information reflected herein is derived from sources believed to be reliable; however, this information is not guaranteed as to its accuracy or completeness. Opinions expressed are subject to change without notice. This material and any view expressed herein are provided for informational purposes only and should not be construed in any way as an inducement to buy or sell commodity futures or options contracts. The Linn Group and its officers, directors, employees and affiliates may take positions for their own accounts in contracts referred to herein. Trading futures involves risk of loss. Past performance is not indicative of future results.
Monday, September 15, 2008
September 15, 2008
Good Morning from the Chicago Board of Trade,
Cash Cattle Situation and Outlook:
We left last week with a fed cattle market that trades mostly $2-$3 lower on a dressed basis in the north at $1.52 and mostly steady in the rest of the country at $98 to mostly $99 live in Texas, Kansas, and Colorado. Sales volume for the week looks moderate and I will report on weekly totals once everything is counted and reported to the USDA in the morning. Packers having ample supplies of contract and formula cattle in the north, an increase in country marketing’s in that part of the country, and lower futures boards early in the week were all catalysts for the lower northern trade this week. Conversely, numbers in the southern feeding states remain more manageable and packers don’t have as many contract cattle down there and this helped to promote a steady trade in that part of the country. Last weeks feeder cattle market was mostly $2-$3 lower as an increase in receipts due to more cattle coming off of summer pasture weighed on prices. Slaughter cow markets were mixed last week with steady to $1 higher and steady to $1 lower being the call depending on what sale you were at in the country. Looking into this week, I would say that showlists will be a little larger in the north and steady to a little smaller in the south. The beef market, while not a run away to the upside, does seem to have a level of support underneath it. Numbers of market ready fed cattle will remain manageable going forward and we should see a gradual increase in domestic and international beef demand going forward as well. We will call for a mostly steady fed cattle trade this week depending on how well early week beef demand and futures perform. Feeder cattle markets should be steady to a little lower early this week along with slaughter cow values.
Cash Beef Situation and Outlook:
Last weeks cattle kill was estimated at 657,000 head, which would be 64,000 head below the previous week and 12,000 head below the same week a year ago. The weekly slaughter included a Friday kill of 111,000 and a Saturday kill of 36,000, and produced an estimated 513.7 mil lbs of beef. Last week the boxed beef market gained $1.78 on the choice cutout to settle at $160.08 and $1.79 on the select cutout to settle at $153.84 on decent movement of 1,296 loads of fabricated beef cuts sold. Friday saw a mixed day in the beef market with the choice cutout closing $.49 higher to settle at $160.57 and the select cutout closing $.23 lower to settle at $153.61. Sales volume on Friday was good with 295 loads of beef sold (127.38 loads of choice fab cuts, 107.69 loads of select fab cuts, 20.63 loads of trim, 39.36 loads of grinds). The choice/select spread on Friday settled at $6.96 a gain of $.72.
Last weeks beef market was led higher by decent export demand for chuck items in particular the chuck roll. Higher thin meat markets (briskets, plate, flanks, etc) also lent support to higher cutout values. Middle meats were again under pressure for most of the week, however interest and demand were said to be improving by the end of the week. There was also some active interest in short loins and strip loins to deliver into October, which helped stave off further losses in that complex. Boneless beef markets were mostly steady last week, however 50% fed cattle trim was starting to firm up late in the week on concern over deliver on product in certain spots of the country due to the impending hurricane. I will look for a mostly steady to higher beef market by the end of this week.
Futures Market Situation and Outlook:
For the week, October live cattle lost $.80 to settle at $102.15, December live cattle lost $1.18 to settle at $103.77, and the February live cattle lost $.25 to settle at $105.55. In the feeder cattle pit for the week, September feeder cattle lost $1.22 to settle at $109.90, October feeder cattle lost $1.75 to settle at $108.92, and the November feeder cattle lost $1.45 to settle at $108.77. The reported CME feeder cattle index for 9/11/08 was $110.98 a loss of $.34.
Fridays live cattle volume saw 39,687 contracts trade in the pit and 20,179 contracts trade on Globex. Live cattle open interest gained 6,180 contracts to come in this morning at 275,592. Friday’s feeder cattle volume saw 4,739 contracts trade in the pit and 1,273 contracts trade on Globex. Feeder cattle open interest gained 267 contracts to come in this morning at 27,426.
Live and feeder cattle futures settled mostly higher on Friday as late week short covering and ideas of a steady southern fed cattle trade supported values going into the close. The Goldman Roll concluded on Friday with an estimated 5,000 contracts of October live cattle rolled into deferred months and 1,000 contracts of October feeder cattle rolled into deferred month contracts. The Texas Farm Bureau over the weekend is reporting that thousands of head of cattle were lost due to hurricane Ike, and that thousands more on running loose in search of feed and water. News of Lehman Brothers filing bankruptcy over the weekend has the stock market sharply lower this morning, and some of this weakness is likely to spill over into the commodity complex this morning, especially the meats. Look for a $.10-$.20 lower open to live and feeder cattle futures this morning and look for some support at last weeks lows of $101.35 in October live cattle and $107.50 in October feeder cattle. Trade Well!!!
Any one wanting a more detailed report on the cattle and beef markets including fundamental, chart and technical analysis, plus spec/hedge recommendations for packers, processors, producers, and meat buyers feel free to contact me by phone or e-mail to set up a free trial.
There is risk in trading futures and options.
Have a Good Day,
Troy Vetterkind
Vetterkind Cattle Brokerage, LLC
Chicago Board of Trade
141 West Jackson Blvd.
Suite 1220A
Chicago, IL 60604
1-888-299-1477 Toll Free
1-312-896-2068 Direct
1-708-224-5985 Mobile
tvetterkind@linngroup.com
Reproduction or rebroadcast of any portion of this information is strictly prohibited without the written permission of the Linn Group, Inc. the information reflected herein is derived from sources believed to be reliable; however, this information is not guaranteed as to its accuracy or completeness. Opinions expressed are subject to change without notice. This material and any view expressed herein are provided for informational purposes only and should not be construed in any way as an inducement to buy or sell commodity futures or options contracts. The Linn Group and its officers, directors, employees and affiliates may take positions for their own accounts in contracts referred to herein. Trading futures involves risk of loss. Past performance is not indicative of future results.
Good Morning from the Chicago Board of Trade,
Cash Cattle Situation and Outlook:
We left last week with a fed cattle market that trades mostly $2-$3 lower on a dressed basis in the north at $1.52 and mostly steady in the rest of the country at $98 to mostly $99 live in Texas, Kansas, and Colorado. Sales volume for the week looks moderate and I will report on weekly totals once everything is counted and reported to the USDA in the morning. Packers having ample supplies of contract and formula cattle in the north, an increase in country marketing’s in that part of the country, and lower futures boards early in the week were all catalysts for the lower northern trade this week. Conversely, numbers in the southern feeding states remain more manageable and packers don’t have as many contract cattle down there and this helped to promote a steady trade in that part of the country. Last weeks feeder cattle market was mostly $2-$3 lower as an increase in receipts due to more cattle coming off of summer pasture weighed on prices. Slaughter cow markets were mixed last week with steady to $1 higher and steady to $1 lower being the call depending on what sale you were at in the country. Looking into this week, I would say that showlists will be a little larger in the north and steady to a little smaller in the south. The beef market, while not a run away to the upside, does seem to have a level of support underneath it. Numbers of market ready fed cattle will remain manageable going forward and we should see a gradual increase in domestic and international beef demand going forward as well. We will call for a mostly steady fed cattle trade this week depending on how well early week beef demand and futures perform. Feeder cattle markets should be steady to a little lower early this week along with slaughter cow values.
Cash Beef Situation and Outlook:
Last weeks cattle kill was estimated at 657,000 head, which would be 64,000 head below the previous week and 12,000 head below the same week a year ago. The weekly slaughter included a Friday kill of 111,000 and a Saturday kill of 36,000, and produced an estimated 513.7 mil lbs of beef. Last week the boxed beef market gained $1.78 on the choice cutout to settle at $160.08 and $1.79 on the select cutout to settle at $153.84 on decent movement of 1,296 loads of fabricated beef cuts sold. Friday saw a mixed day in the beef market with the choice cutout closing $.49 higher to settle at $160.57 and the select cutout closing $.23 lower to settle at $153.61. Sales volume on Friday was good with 295 loads of beef sold (127.38 loads of choice fab cuts, 107.69 loads of select fab cuts, 20.63 loads of trim, 39.36 loads of grinds). The choice/select spread on Friday settled at $6.96 a gain of $.72.
Last weeks beef market was led higher by decent export demand for chuck items in particular the chuck roll. Higher thin meat markets (briskets, plate, flanks, etc) also lent support to higher cutout values. Middle meats were again under pressure for most of the week, however interest and demand were said to be improving by the end of the week. There was also some active interest in short loins and strip loins to deliver into October, which helped stave off further losses in that complex. Boneless beef markets were mostly steady last week, however 50% fed cattle trim was starting to firm up late in the week on concern over deliver on product in certain spots of the country due to the impending hurricane. I will look for a mostly steady to higher beef market by the end of this week.
Futures Market Situation and Outlook:
For the week, October live cattle lost $.80 to settle at $102.15, December live cattle lost $1.18 to settle at $103.77, and the February live cattle lost $.25 to settle at $105.55. In the feeder cattle pit for the week, September feeder cattle lost $1.22 to settle at $109.90, October feeder cattle lost $1.75 to settle at $108.92, and the November feeder cattle lost $1.45 to settle at $108.77. The reported CME feeder cattle index for 9/11/08 was $110.98 a loss of $.34.
Fridays live cattle volume saw 39,687 contracts trade in the pit and 20,179 contracts trade on Globex. Live cattle open interest gained 6,180 contracts to come in this morning at 275,592. Friday’s feeder cattle volume saw 4,739 contracts trade in the pit and 1,273 contracts trade on Globex. Feeder cattle open interest gained 267 contracts to come in this morning at 27,426.
Live and feeder cattle futures settled mostly higher on Friday as late week short covering and ideas of a steady southern fed cattle trade supported values going into the close. The Goldman Roll concluded on Friday with an estimated 5,000 contracts of October live cattle rolled into deferred months and 1,000 contracts of October feeder cattle rolled into deferred month contracts. The Texas Farm Bureau over the weekend is reporting that thousands of head of cattle were lost due to hurricane Ike, and that thousands more on running loose in search of feed and water. News of Lehman Brothers filing bankruptcy over the weekend has the stock market sharply lower this morning, and some of this weakness is likely to spill over into the commodity complex this morning, especially the meats. Look for a $.10-$.20 lower open to live and feeder cattle futures this morning and look for some support at last weeks lows of $101.35 in October live cattle and $107.50 in October feeder cattle. Trade Well!!!
Any one wanting a more detailed report on the cattle and beef markets including fundamental, chart and technical analysis, plus spec/hedge recommendations for packers, processors, producers, and meat buyers feel free to contact me by phone or e-mail to set up a free trial.
There is risk in trading futures and options.
Have a Good Day,
Troy Vetterkind
Vetterkind Cattle Brokerage, LLC
Chicago Board of Trade
141 West Jackson Blvd.
Suite 1220A
Chicago, IL 60604
1-888-299-1477 Toll Free
1-312-896-2068 Direct
1-708-224-5985 Mobile
tvetterkind@linngroup.com
Reproduction or rebroadcast of any portion of this information is strictly prohibited without the written permission of the Linn Group, Inc. the information reflected herein is derived from sources believed to be reliable; however, this information is not guaranteed as to its accuracy or completeness. Opinions expressed are subject to change without notice. This material and any view expressed herein are provided for informational purposes only and should not be construed in any way as an inducement to buy or sell commodity futures or options contracts. The Linn Group and its officers, directors, employees and affiliates may take positions for their own accounts in contracts referred to herein. Trading futures involves risk of loss. Past performance is not indicative of future results.
Friday, September 12, 2008
September 12, 2008
Good Morning from the Chicago Board of Trade,
Cash Cattle Situation and Outlook:
We saw more cash fed cattle trade in the north yesterday at $1.52 dressed. Packers continue to bid cattle at $97 in the south but most feedlots remain priced at $101-$102 live, and the standoff continues. With the mini-rally on the board late yesterday producers in the south will be holding steadfast with higher offering prices. The lower Nebraska trade may make it hard for southern feeders to get higher money for their fed cattle this week, but considering we are only $.90 off of last Friday’s close on the October live cattle contract, the market in that part of the country shouldn’t be any worse than $.50-$1 lower at $98-$98.50. If we were to see further strength in the board today the market might be able to hold steady. So that’s how we will call it steady to $.50-$1 lower for the remainder of this week, and then we will have to reassess the situation early next week. I would still look for the market to be supported going into the end of September/first of October as fed cattle supplies will be shrinking and beef demand will be increasing.
Cash Beef Situation and Outlook:
Yesterdays kill was estimated at 128,000 head, which would be even with a week ago and 5,000 head above the same day a year ago. The week-to-date kill now stands at 510,000 head, which would be 123,000 head below the same period a week ago, with the industry looking for a 665,000 head production week. The boxed beef market was lower yesterday as we see the choice cutout closing $.01 lower to settle at $160.08 and the select cutout closing $.07 lower to settle at $153.84. Sales volume was good with 380 loads of beef sold (114.80 loads of choice fab cuts, 140.61 loads of select fab cuts, 46.23 loads of trim, 78.10 loads of grinds). The choice/select spread settled at $6.24 a gain of $.06.
The beef market held mostly steady yesterday with just a few price markdowns on bone-in and boneless ribeyes that kept the cutout values from settling higher. Chuck rolls continue to be supported by export interest from Asia and this keeps supplies of said cuts off the domestic market resulting in higher prices. Boneless beef markets were mixed with weakness in the 90% cow beef and strength in the 50% fed cattle trim. I will continue to look for a steady to higher beef market going into next week.
Futures Market Situation and Outlook:
October live cattle settled at $102.05 a gain of $.40, December live cattle settled at $103.25 a gain of $.22, and the February live cattle settled at $104.75 a gain of $.07. In the feeder cattle pit, September feeder cattle settled at $109.65 a loss of $.20, October feeder cattle settled at $108.57 a loss of $.32, and the November feeder cattle settled at $108.57 a loss of $.10. The reported CME feeder cattle index for 9/10/08 was $111.32 a loss of $.25.
Yesterday’s live cattle volume saw 39,558 contracts trade in the pit and 20,207 contracts trade on Globex. Live cattle open interest declined 2,046 contracts to come in this morning at 269,451. Yesterday’s feeder cattle volume saw 5,289 contracts trade in the pit and 1,369 contracts trade on Globex. Feeder cattle open interest declined 231 contracts to come in this morning at 27,171.
After an initial lower open and subsequent lower early trade, live and feeder cattle futures managed to claw their way back from early session lows to settle modestly lower, to instances of higher in terms of the front four live cattle futures contracts. Short covering and hedge lifting were the main reasons for the late rally yesterday, however there was some heavy call option buying in the December live cattle, which had option locals buying the board to cover the short calls they were selling. It seems like the pattern of last week is carrying over into this week, where we spent the first part of the week trading lower in anticipation of a lower Nebraska fed cattle trade and then higher on a steady southern trade. The USDA released new supply/demand data this morning, and the report looks a little friendly the grain market as they lower both corn and soybean yields to 152.3 bu acre and 40 bu acres respectively. For the most part the USDA left beef numbers alone with 2008 production estimated at 26.790 bil lbs and 2009 production estimated at 26.652 bil lbs. They did raise 2008 beef exports 116 mil lbs and 2009 beef exports 145 mil lbs, reflecting better than anticipated demand from Asia. Futures are going to be choppy here until the market gets better news regarding the cash markets. I think both the cash cattle and beef markets will find support in the near term and begin to trade higher into the end of this month and first of next month. This will give futures the shot in the arm they need to move higher. Look for a $.20-$.30 higher open to live and feeder cattle futures. Have a Good Weekend and Trade Well!!!
Any one wanting a more detailed report on the cattle and beef markets including fundamental, chart and technical analysis, plus spec/hedge recommendations for packers, processors, producers, and meat buyers feel free to contact me by phone or e-mail to set up a free trial.
There is risk in trading futures and options.
Have a Good Day,
Troy Vetterkind
Vetterkind Cattle Brokerage, LLC
Chicago Board of Trade
141 West Jackson Blvd.
Suite 1220A
Chicago, IL 60604
1-888-299-1477 Toll Free
1-312-896-2068 Direct
1-708-224-5985 Mobile
tvetterkind@linngroup.com
Reproduction or rebroadcast of any portion of this information is strictly prohibited without the written permission of the Linn Group, Inc. the information reflected herein is derived from sources believed to be reliable; however, this information is not guaranteed as to its accuracy or completeness. Opinions expressed are subject to change without notice. This material and any view expressed herein are provided for informational purposes only and should not be construed in any way as an inducement to buy or sell commodity futures or options contracts. The Linn Group and its officers, directors, employees and affiliates may take positions for their own accounts in contracts referred to herein. Trading futures involves risk of loss. Past performance is not indicative of future results.
Good Morning from the Chicago Board of Trade,
Cash Cattle Situation and Outlook:
We saw more cash fed cattle trade in the north yesterday at $1.52 dressed. Packers continue to bid cattle at $97 in the south but most feedlots remain priced at $101-$102 live, and the standoff continues. With the mini-rally on the board late yesterday producers in the south will be holding steadfast with higher offering prices. The lower Nebraska trade may make it hard for southern feeders to get higher money for their fed cattle this week, but considering we are only $.90 off of last Friday’s close on the October live cattle contract, the market in that part of the country shouldn’t be any worse than $.50-$1 lower at $98-$98.50. If we were to see further strength in the board today the market might be able to hold steady. So that’s how we will call it steady to $.50-$1 lower for the remainder of this week, and then we will have to reassess the situation early next week. I would still look for the market to be supported going into the end of September/first of October as fed cattle supplies will be shrinking and beef demand will be increasing.
Cash Beef Situation and Outlook:
Yesterdays kill was estimated at 128,000 head, which would be even with a week ago and 5,000 head above the same day a year ago. The week-to-date kill now stands at 510,000 head, which would be 123,000 head below the same period a week ago, with the industry looking for a 665,000 head production week. The boxed beef market was lower yesterday as we see the choice cutout closing $.01 lower to settle at $160.08 and the select cutout closing $.07 lower to settle at $153.84. Sales volume was good with 380 loads of beef sold (114.80 loads of choice fab cuts, 140.61 loads of select fab cuts, 46.23 loads of trim, 78.10 loads of grinds). The choice/select spread settled at $6.24 a gain of $.06.
The beef market held mostly steady yesterday with just a few price markdowns on bone-in and boneless ribeyes that kept the cutout values from settling higher. Chuck rolls continue to be supported by export interest from Asia and this keeps supplies of said cuts off the domestic market resulting in higher prices. Boneless beef markets were mixed with weakness in the 90% cow beef and strength in the 50% fed cattle trim. I will continue to look for a steady to higher beef market going into next week.
Futures Market Situation and Outlook:
October live cattle settled at $102.05 a gain of $.40, December live cattle settled at $103.25 a gain of $.22, and the February live cattle settled at $104.75 a gain of $.07. In the feeder cattle pit, September feeder cattle settled at $109.65 a loss of $.20, October feeder cattle settled at $108.57 a loss of $.32, and the November feeder cattle settled at $108.57 a loss of $.10. The reported CME feeder cattle index for 9/10/08 was $111.32 a loss of $.25.
Yesterday’s live cattle volume saw 39,558 contracts trade in the pit and 20,207 contracts trade on Globex. Live cattle open interest declined 2,046 contracts to come in this morning at 269,451. Yesterday’s feeder cattle volume saw 5,289 contracts trade in the pit and 1,369 contracts trade on Globex. Feeder cattle open interest declined 231 contracts to come in this morning at 27,171.
After an initial lower open and subsequent lower early trade, live and feeder cattle futures managed to claw their way back from early session lows to settle modestly lower, to instances of higher in terms of the front four live cattle futures contracts. Short covering and hedge lifting were the main reasons for the late rally yesterday, however there was some heavy call option buying in the December live cattle, which had option locals buying the board to cover the short calls they were selling. It seems like the pattern of last week is carrying over into this week, where we spent the first part of the week trading lower in anticipation of a lower Nebraska fed cattle trade and then higher on a steady southern trade. The USDA released new supply/demand data this morning, and the report looks a little friendly the grain market as they lower both corn and soybean yields to 152.3 bu acre and 40 bu acres respectively. For the most part the USDA left beef numbers alone with 2008 production estimated at 26.790 bil lbs and 2009 production estimated at 26.652 bil lbs. They did raise 2008 beef exports 116 mil lbs and 2009 beef exports 145 mil lbs, reflecting better than anticipated demand from Asia. Futures are going to be choppy here until the market gets better news regarding the cash markets. I think both the cash cattle and beef markets will find support in the near term and begin to trade higher into the end of this month and first of next month. This will give futures the shot in the arm they need to move higher. Look for a $.20-$.30 higher open to live and feeder cattle futures. Have a Good Weekend and Trade Well!!!
Any one wanting a more detailed report on the cattle and beef markets including fundamental, chart and technical analysis, plus spec/hedge recommendations for packers, processors, producers, and meat buyers feel free to contact me by phone or e-mail to set up a free trial.
There is risk in trading futures and options.
Have a Good Day,
Troy Vetterkind
Vetterkind Cattle Brokerage, LLC
Chicago Board of Trade
141 West Jackson Blvd.
Suite 1220A
Chicago, IL 60604
1-888-299-1477 Toll Free
1-312-896-2068 Direct
1-708-224-5985 Mobile
tvetterkind@linngroup.com
Reproduction or rebroadcast of any portion of this information is strictly prohibited without the written permission of the Linn Group, Inc. the information reflected herein is derived from sources believed to be reliable; however, this information is not guaranteed as to its accuracy or completeness. Opinions expressed are subject to change without notice. This material and any view expressed herein are provided for informational purposes only and should not be construed in any way as an inducement to buy or sell commodity futures or options contracts. The Linn Group and its officers, directors, employees and affiliates may take positions for their own accounts in contracts referred to herein. Trading futures involves risk of loss. Past performance is not indicative of future results.
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