October 31, 2008


Good Morning from the Chicago Board of Trade,

Cash Cattle Situation and Outlook:

We saw further cleanup trade in the fed cattle market yesterday with Kansas feedlots reporting 1,900 head of cattle sold for $89-$92.50, Texas feedlots selling 1,600 head of fed cattle for $92.50 ($.50 higher than Wednesday), Nebraska feedlots selling 6,300 head of fed cattle for $1.37-$1.42, and Iowa/MN feedlots selling 9,700 head of fed cattle for $1.36-$1.40. That should probably wrap things up for this week and we will now focus our attention towards next week’s trade. Feedlot showlists should continue to be manageable for the next couple of weeks and the market still anticipates some end of the year holiday beef buying coming into the first of November. This along with the fact that packers have pre-sold beef orders that they are delivering on now, should keep them in the market for fed cattle to kill. Providing we don’t see an extreme implosion in cattle futures between now and next Wednesday, chances are we could see another steady to higher fed cattle trade for next week. Heading home for the weekend, fed cattle selling through the sale barns are bringing mostly steady to $1 lower money. Slaughter cows are also trading at lower money, however as expected, feeder cattle markets have improved with most sales reporting $2-$3 higher money.

Cash Beef Situation and Outlook:

Yesterdays kill was estimated at 128,000 head which would be 2,000 head above last week and 2,000 head below the same day a year ago. The week-to-date kill now stands at 507,000 head, which would be 10,000 head below last weeks pace with the industry looking for a 635,000 head production week. The boxed beef market was higher yesterday with the choice cutout closing $.10 higher to settle at $141.81 and the select cutout closing $.26 higher to settle at $135.42. Sales volume was light with 273 loads of beef sold (97.10 loads of choice fab cuts, 89.24 loads of select fab cuts, 27.37 loads of trim, 59.28 loads of grinds). The choice/select spread settled at $6.39 a loss of $.16.

The beef market was mostly steady yesterday, however inquiry for beef into next week was said to be a little better. As mentioned in previous writing’s, market participants expect to see at least some holiday buying of rib and loin packages, and this is thought to be a supportive factor to cutout values going into the middle of November. I would look for a steady to higher trend to the boxed beef market going into next week.

Futures Market Situation and Outlook:

October live cattle settled at $93.50 a gain of $1.85, December live cattle settled at $91.45 a gain of $.45, and the February live cattle settled at $93.25 a gain of $.72. In the feeder cattle pit, October feeder cattle expired at $96.07 a gain of $.27, November feeder cattle settled at $97.85 a gain of $1.35, and the January feeder cattle settled at $97.25 a gain of $1.35. The reported CME feeder cattle index for 10/29/08 was $95.87 a loss of $.15.

Yesterdays live cattle volume saw 19,849 contracts trade in the pit and 12,314 contracts trade on Globex. Live cattle open interest declined 921 contracts to come in this morning at 211,000. Yesterday’s feeder cattle volume saw 2,234 contracts trade in the pit and 897 contracts trade on Globex. Feeder cattle open interest declined 196 contracts to come in this morning at 20,568.

Live and feeder cattle issues settled with solid gains yesterday on continued short covering linked to better cash cattle markets and ideas both beef and cash cattle markets could be higher again next week. It’s the end of the month and the outside markets are a little lower, so we have to be careful of a selloff today. With that said though, if we can keep the December live cattle above $90 and November feeder cattle above $96 by the close of trade today I think that would look a little positive on a weekly chart and could bode well for higher prices going into next week. I don’t think we will see any kind of runaway rally to the upside, but I do think we could get Dec, Feb, and April fats back into the middle $90’s and Nov and Jan feeders back up to $100. Unfortunately, given the current state of the economy and given the fact that we are living in a different world than we were a couple of months ago, we are likely going to want to sell rallies up against the above mentioned price targets. There were 3 new loads of cattle posted against the October live cattle contract last night. ADM delivered the cattle out of North Platte, NE and Newedge USA received them. Keep in mind that October live cattle will expire at noon today. Look for a $.10-$.20 higher open to live and feeder cattle futures this morning. 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.

October 30, 2008


Good Morning from the Chicago Board of Trade,

Cash Cattle Situation and Outlook:

We saw a moderate fed cattle trade develop yesterday at $1-$2 higher money with Texas feedlots selling 23,000 head of fat cattle for $89-$92.50, Kansas feedlots selling 16,000 head of fed cattle for $89-$92, Nebraska feedlots selling 11,000 head of fed cattle for $1.37-$1.40, Colorado feedlots selling 4,500 head of fed cattle for $90-$92 live, and Iowa feedlots selling 500 head of fed cattle for $1.40 dressed. I would expect to see further clean up of fed cattle sales today and tomorrow at fully steady money with yesterday. Sale barn cattle continue to trade on the defensive with fats, feeders, and slaughter cows off by $2-$3.

Cash Beef Situation and Outlook:

Yesterdays kill was estimated at 110,000 head, which would be 17,000 head below last week and 17,000 head below the same day a year ago. The week-to-date kill now stands at 365,000 head, which would be 16,000 head below the same period a week ago with the industry looking for a 635,000 head production week. The boxed beef market was lower yesterday with the choice cutout closing $1.24 lower to settle at $141.71 and the select cutout closing $.25 lower to settle at $135.16. Sales volume was good with 324 loads of beef sold (107.09 loads of choice fab cuts, 98.92 loads of select fab cuts, 44.62 loads of trim, 72.90 loads of grinds). The choice/select spread settled at $6.55 a loss of $.99.

The beef market was mostly lower yesterday with discounts being offered throughout much of the carcass primals. Near term demand remains an issue and this has buyers still standing on the sidelines waiting for packers to offer bargains. I would look for a mostly steady to slightly softer tone to the beef complex going into next week. Beef exports for the week of October 17-23, 2008 are as follows:

Beef: Net sales of 8,600 MT reported for South Korea (5,400 MT), Japan (1,900 MT), Vietnam (1,400 MT), and Canada (800 MT), were partially offset by decreases for Mexico (1,000 MT). Net Sales of 1,200 MT for delivery in 2009 were primarily for South Korea (600 MT) and Canada (500 MT). Exports of 8,500 MT were mainly to Mexico (2,800 MT), South Korea (2,000 MT), Canada (1,200 MT), Vietnam (800 MT), Japan (800 MT), and Taiwan (300 MT).


Futures Market Situation and Outlook:

October live cattle settled at $91.65 a gain of $1.90, December live cattle settled at $91.00 a gain of $2.12, and the February live cattle settled at $92.52 a gain of $2.20. In the feeder cattle pit, October feeder cattle settled at $95.80 a gain of $.25, November feeder cattle settled at $96.50 a gain of $1.07, and the January feeder cattle settled at $95.90 a gain of $1.80. The reported CME feeder cattle index for 10/28/08 was $96.02 a loss of $.39.

Yesterdays live cattle volume saw 23,516 contracts trade in the pit and 13,162 on Globex. Live cattle open interest declined 2,121contracts to come in this morning at 211,923. Yesterday’s feeder cattle volume saw 2,869 contracts trade in the pit and 547 contracts trade on Globex. Feeder cattle open interest declined 334 contracts to come in this morning at 20,759.

Live and feeder cattle futures settled yesterday with solid gains on short covering linked to the higher cash fed cattle trade. However, with that said packers are beginning to cut kills as the beef continues to be hard to move, which is likely going to keep rallies in check for the rest of the week. Again, keep an eye on the December live cattle contract as closing above $90 by the end of this week could keep the market moving higher into early next week. The same can be said for November feeder cattle closing above $96 by tomorrow afternoon. October feeder cattle expire today at noon and October live cattle expire tomorrow at noon. Deliveries last night saw Rosenthal retender the 28 loads of cattle they got Tuesday and Newedge demand them. Overnight stock market futures are trading higher, which should lead to a $.20-$.40 higher 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.

October 29, 2008


Good Morning from the Chicago Board of Trade,

Cash Cattle Situation and Outlook:

The cash fed cattle market was quiet yesterday with bids and poorly defined. There were a few loads of cattle reportedly sold in Nebraska at $1.37, which would be at the top end of last weeks trading range, however volume was too light to establish a trend. Most packer bids will start out at $88 live and $1.32-$1.34 dressed, with feedlot offering prices holding firm at $92-$93 live and $1.42-$1.43 dressed. We could see some short bought packers begin to enter the market as early as today in the south, however suspect that most of this week business won’t commence until Thursday or Friday. The way things look right now the trade shouldn’t be too much worse then last week’s $90-$91/$1.36-$1.37 trade. Packers in the south don’t have as many contract cattle around them as they do in the north, and this along with having some pre-sold beef orders to fill will keep them in the cash market for cattle to kill to fill those orders. Sale barn cattle continued to carry a mostly steady to lower undertone yesterday, however if we see the futures board hold onto some of their early week gains we could begin to see fat and feeder cattle values stabilize.

Cash Beef Situation and Outlook:

Yesterdays kill was estimated at 127,000 head, which would be even with a week ago and 5,000 head below the same day a year ago. The week-to-date kill now stands at 255,000 head, which would be 1,000 head above the same period a week ago with the industry looking for a 635,000 head production week. The boxed beef market was higher yesterday with the choice cutout closing $1.31 higher to settle at $142.95 and the select cutout closing $.16 higher to settle at $135.41. Sales volume was good with 293 loads of beef sold (101.48 loads of choice fab cuts, 93.12 loads of select fab cuts, 40.74 loads of trim, and 58.12 loads of grinds). The choice/select spread settled at $7.54 a gain of $1.15.

Near term demand for boxed beef continues to fall short of expectations; however we did see some accounts step in and secure some rib packages yesterday, which led to higher prices on choice rib roasts and ribeyes. Chuck items were under some pressure yesterday, especially select short ribs, which reflect the immediate lack of export business. Round items were mostly steady to higher yesterday as inventories of said cuts are reportedly well clear. Boneless beef markets were off just a little yesterday. Cutout values feel like they could at least stabilize at current price levels, and perhaps move modestly higher going into the first of November.

Futures Market Situation and Outlook:

October live cattle settled at $89.75 a gain of $.82, December live cattle settled at $88.87 a gain of $.10, and the February live cattle settled at $90.32 a gain of $.15. In the feeder cattle pit, October feeder cattle settled at $95.55 a loss of $.35, November feeder cattle settled at $95.42 a loss of $.12, and the January feeder cattle settled at $94.10 a loss of $.60. The reported CME feeder cattle index for 10/27/08 was $96.41 a loss of $.52.

Yesterdays live cattle volume saw 20,835 contracts trade in the pit and 13,817 trade on Globex. Live cattle open interest declined 40 contracts to come in this morning at 214,044. Yesterday’s feeder cattle volume saw 2,451 contracts trade in the pit and 1,503 contracts trade on Globex. Feeder cattle open interest declined 327 contracts to come in this morning at 21,109.

Live and feeder cattle settled mixed after a sharply higher open faded throughout the day on technical and spec selling. However, after the close of the pit trade yesterday afternoon, the Dow surged to over 800 points higher on the cash and 1,000 points higher on the futures, which had most live and feeder cattle issues rallying back to 100 points higher by the 4:00 pm close of electronic trading. Globex futures opened sharply higher last night because of the strength in the Dow Jones, and so far this morning have been able to hold onto those gains. Although the futures run into willing sellers on any rally attempts, they do feel like they have a little support under the market for the time being, and perhaps we could see a couple of dollar rally into the first part of next week. Especially if the Dow can hold onto its gains from yesterday and we trade cash fat cattle steady to higher this week. Support for December live cattle will come into play at $88 this morning with plenty of resistance being found at $90. As mentioned yesterday, December will need to close back above $90 by the end of the week in order to negate some of the recent bearishness. November feeder cattle should find some support at $94.50 this morning with resistance being found at $96.80. Closing November feeder cattle above $96 by the end of the week would keep rally potential alive going into next week. Keep in mind Oct feeders go off the board tomorrow and October fats expire Friday afternoon. Deliveries last night saw another 28 loads posted against the October live contract in Norfolk, NE. Cadent delivered 10 loads and RJO delivered 18 loads with Rosenthal receiving them. We will see if the loads are stopped tonight. Look for a $.50-$.75 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.

October 28, 2008


Good Morning from the Chicago Board of Trade,

Cash Cattle Situation and Outlook:

The cash fed cattle market was typically slow for a Monday with most of the day spent putting together this weeks showlist, which looks to be coming in smaller in Nebraska and Texas with just a few more cattle showing up for sale in Kansas. A look at last weeks sales volume shows Texas/OK/NM feedlots selling 44,287 (53,715 the week before) head of fed cattle for $90-$91 live, Kansas feedlots selling 27,831 (38,928) head of fed cattle for $90-$91 live or $1.43 ½ dressed, Nebraska feedlots selling 62,665 (55,479) head of fed cattle for $86-$90 live and $1.36-$1.37 dressed, Colorado feedlots selling 6,438 (6,683) head of fed cattle for $89-$90 live and $1.38-$1.39 dressed, and Iowa/MN feedlots selling 29,927 (25,938) head of fed cattle for $84-$86 live and $1.34-$1.36 dressed. Sales volume looked pretty good in Texas and Nebraska, however a little light in Kansas, which is leading to a few more cattle being offered for sale there this week. Packer bids were few and far between yesterday with most offering prices starting out at $93 live and $1.40-$1.42 dressed. A few packers, especially in the south, are said to be a little short on inventory, which could lead to a midweek trade in that part of the country. Beef demand remains on the defensive and that is going to remain a key issue in the cash markets for the next several months as we are going to need to see some stabilization in the economy and some confidence return to the beef trade in order to keep the cash market from moving lower into the first quarter of next year. For this week though, if we can see the stock market stabilize and hold together, which in turn would keep the futures market from capitulating any further, then we could likely see a fed cattle market that would trade no worse than steady with last weeks $90-$91/$1.36-$1.37 trade.

In the auction markets most classes of cattle are starting the week on a lower tone with tops in the fat cattle market at $81-$85 on the beef cattle and $77-$81 on the Holsteins. Slaughter cows are off with the bulk of the lean cows bringing $42-$52 and the fat cows bringing $52-$60. Feeder cattle markets are giving up almost all of last weeks gains early this week, with Oklahoma City trading yearling cattle $2-$4 lower and the calves $5-$10 lower. This is the case throughout many of the northern plains sale barns as well. A quick run down of prices in OKC yesterday shows 4-6 weight calves bringing $100-$120, 6-8 weight steers bringing $90-$100, and 8-10 weight steers bringing $85-$90. I would look for more pressure on sale barn cattle until at least midweek.

Cash Beef Situation and Outlook:

Yesterday’s cattle slaughter was estimated at 128,000 head, which would be 1,000 head above last week and even with the same day a year ago, with the industry looking for a 635,000 head production week. The boxed beef market was higher yesterday with the choice cutout closing $.12 higher to settle at $141.64 and the select cutout closing $.21 higher to settle at $135.25. Sales volume was light with 247 loads of beef sold (76.12 loads of choice fab cuts, 78.18 loads of select fab cuts, 5.66 loads of trim, 86.92 loads of grinds). The choice/select spread settled at $6.39 a loss of $.09.

The beef market was mostly steady yesterday with just a few price markdowns noted in the loin section of the animal, most notably the tenderloin butt and peeled tenders. Most of the rest of the complex appears to be in pretty good shape in terms of inventory at the packinghouse level and this had packers hold with firm offering prices on most cuts throughout the rib, chuck, and round. It is being reported that ground beef demand at retail is on solid footing and most coarse ground and boneless items were said to be moving at steady to higher price levels. There was more talk yesterday about import arrivals of Australian and South American beef in forward time slots given the recent strength of the U.S. dollar vs. foreign currencies. The market still anticipates some buying of holiday rib and loin packages coming into the first of November, which would be supportive to cutout values if such a scenario were to develop. I would look for a mostly steady beef market into the middle of the week, with some possible strength developing by late week into the first of next.

Futures Market Situation and Outlook:

October live cattle settled at $88.92 a gain of 1.07, December live cattle settled at $88.77 a gain of $1.22, and the February live cattle settled at $90.17 a gain of $1.77. In the feeder cattle pit, October feeder cattle settled at $95.90 a loss of $.25, November feeder cattle settled at $95.55 a gain of $1.72, and the January feeder cattle settled at $94.70 a gain of $1.60. The reported CME feeder cattle index for 10/24/08 was $96.93 a loss of $.68.

Yesterdays live cattle volume saw 19,183 contracts trade in the pit and 9,933 contracts trade on Globex. Live cattle open interest declined 2,493 contracts to come in this morning at 214,084. Yesterday’s feeder cattle volume saw 2,582 contracts trade in the pit and 886 contracts trade on Globex. Feeder cattle open interest gained 122 contracts to come in this morning at 21,543.

Live and feeder cattle futures ended the day on a higher market due to short covering and ideas last Friday’s selloff was overdone. On Friday there were 19 loads of cattle posted against the October contract and all 19 loads were retendered last night and demanded by Newedge in Norfolk, NE. The big news this morning is the USDA coming out with revised acreage numbers for the 08/09 corn and bean crop. They lowered corn acres 1 mil and bean acres 1.1 mil, giving us a projected corn production number of 12.033 bil bu down 167 mil bu and a projected carryout of 1.088 bil bu down 66 mil. They also lowered bean production 45 mil and lowered the bean carryout 15 mil. This had grains trading sharply higher overnight and will likely lead to a sharply higher grain open this morning. Overseas equity markets were sharply higher overnight, which has Dow futures pointing to a 200 point plus opening this morning. All of this should help support a higher cattle open. Front month live cattle futures will find resistance at $90 for the first part of this week, and we will need to see December live cattle close above $90 by the end of the week in order to negate some of the recent bearishness. Keep in mind that last trading day for October live cattle is this Friday at noon. You either have to be out of positions or deliver/take delivery of cattle by noon on Friday. October feeder cattle also expire this week on Thursday. Support for live and feeder cattle futures for the rest of this week will be found at last Friday’s lows. Hedger’s look for strength in the futures to buy some put option spreads on production that needs risk management. Speculators can buy live and feeder cattle futures when they are trading lower this week and pitch them when they are higher. Look for a $.25-$.50 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.

October 27, 2008


Good Morning from the Chicago Board of Trade,

Cash Cattle Situation and Outlook:

We left last week with a fat cattle that trades mostly $1-$2 higher at $90-$91 live and $1.43 dressed in the south and $87-$90 live and $1.36-$1.37 dressed in the north on moderate movement. Feeder cattle started the week on a firmer tone with many sales reporting $1-$3 higher on yearling cattle and $5-$10 higher on calves. However, as the futures market continued to capitulate late in the week many auctions started reporting steady to lower trades by Friday afternoon. Slaughter cows started the week a couple dollars higher as well, but fell off late. Beef demand has fallen off the last couple of weeks both domestically and internationally and this will be an overriding factor to fed cattle prices until we see demand pick back up. I wouldn’t expect to see much out of the cash markets this week unless we get a major rally in the futures market, as the futures are going to lead the cash lower until the market straightens out. Look for a lower tone to the cash cattle and beef markets early this week.

Cash Beef Situation and Outlook:

Last weeks cattle slaughter was estimated at 647,000 head, which would be 15,000 head above the previous week and 26,000 head below the same week a year ago. The weekly slaughter produced an estimated 511-mil lbs of beef. The ytd slaughter now runs .5% above last year at 28.087 mil head with ytd beef production running .9% above last year at 21.734 bil lbs. For the week, choice boxed beef lost $1.19 to settle at $143.30 and the select boxed beef lost $1.67 to settle at $135.82 on increased volume of 1,177 loads of fabricated cuts sold through Thursday. Friday saw similar losses in the beef complex with the choice cutout losing $1.78 to settle at $141.52 and the select cutout losing $.78 to settle at $135.04. Sales volume on Friday was good with 340 loads of beef sold (135.81 loads of choice fab cuts, 123.96 loads of select fab cuts, 34.30 loads of trim, and 45.85 loads of grinds). The choice/select spread settled at $6.48 a loss of $1.00 for the day and $.52 for the week.

The beef market was mostly lower all of last week, however we continue to see increased buying on the break in the market. This increase in sales volume is confined to immediate shipment of product as forward sales remain stagnant. All primal areas of the carcass were lower last week, with the biggest declines being found in the rib and loin sections of the animal. Until we see some better demand come into the beef market prices will remain under pressure, which in turn will continue to pressure fed cattle prices. Boneless beef markets were mostly steady on the 90’s and slightly lower on the 50’s. The larger fed cattle kill kept the fed cattle trim under pressure late in the week, and a lack of available slaughter cows in the country supported cow beef values. Imported beef markets were mostly steady last week, however Australian beef and South American beef are starting to price into domestic grinding formulations better than domestic beef, and with these countries currencies losing value to the U.S. dollar we can expect to see more imported beef coming into the U.S. in the coming months. Look for a softer trend to the beef market early this week.

Futures Market Situation and Outlook:

For the week, October live cattle lost $3.20 to settle at $87.85, December live cattle lost $5.00 to settle at $87.55, and the February live cattle lost $4.85 to settle at $88.40. In the feeder cattle pit, October feeder cattle lost $2.55 to settle at $96.15, November feeder cattle lost $4.82 to settle at $93.82, and the January feeder cattle lost $4.95 to settle at $93.10. The reported CME feeder cattle index for 10/23/08 was $97.61 a loss of $.32 on the day however a gain of $.29 for the week.

Fridays live cattle volume saw 18,043 contracts trade in the pit and 16,197 contracts trade on Globex. Live cattle open interest declined 7,441 contracts to come in this morning at 216,577. Friday’s feeder cattle volume saw 3,206 contracts trade in the pit and 1,589 contracts trade on Globex. Feeder cattle open interest declined 405 contracts to come in this morning at 21,416.

The latest commitment of traders report showed the small funds net short 13,643 contracts of live cattle a gain of 2,566, commercials were net short 71,607 a decline of 4,152, index funds were net long 115,063 a decline of 4,129, and the small spec was net short 29,815 a decline of 2,542. In the feeder cattle, small funds were net short 4,808 a decline of 388, commercials were net long 3,869 a decline of 520, index funds were net long 5,447 a decline of 135, and the small spec was net short 4,508 a decline of 267.

Live and feeder cattle futures continued their downtrend last week with sharp losses posted across the board by the close on Friday. Further capitulation in the U.S. and world stock markets drug down the entire commodity complex last week and we can expect to see more of the same until worldwide equity markets straighten out and investors find confidence in the financial system again. Current fundamentals of the livestock and grain markets mean nothing right now as the market goes to price in a worst case scenario in world demand for all commodity products. This type of thinking and technical factors in the cattle market could take futures prices down to the upper $70’s to lower $80’s in the fed cattle and upper $80’s to lower $90’s in the feeder cattle. For producers who have missed the boat in terms of hedging or have lifted hedges too soon, the best alternative right now would be to have coverage via put options, or if selling futures have some sort of call option protection on. Look for a $.10-$.20 higher open to live and feeder cattle futures, providing the Dow isn’t 300 lower by the open. 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.

October 24, 2008


Good Morning from the Chicago Board of Trade,

Cash Cattle Situation and Outlook:

We saw further clean up trading of fed cattle yesterday with prices generally steady with Wednesday’s market. There was 1,500 head of fed cattle reportedly sold in Kansas at $89-$90, 10,000 head of fed cattle sold in Nebraska at $1.34-$1.37, 3,000 head of fed cattle sold in Texas at $90-$91, and 10,000 head of fed cattle sold in Iowa at $1.34-$1.36. That is probably going to wrap things up for the week and any more cattle that need to be sold will likely take place at the bottom end of yesterdays range. Going home for the weekend fat cattle, feeder cattle, and slaughter cows are all trading higher in the auction markets, however if the stock futures and cattle futures don’t straighten out by early next week, prices for all classes of cattle will likely be lower.

Cash Beef Situation and Outlook:

Yesterday kill was estimated at 126,000 head, which would be 1,000 head below last week and 2,000 head below the same day a year ago. The week-to-date kill now stands at 507,000 head, which would be 14,000 head above the same period last week with the industry looking for a 630,000 head production week. The boxed beef market was lower yesterday with the choice cutout closing at $143.30 a loss of $1.08 and the select cutout closing at $135.82 a loss of $1.74. Sales volume was good with 390 loads of beef sold (159.74 loads of choice fab cuts, 162.30 loads of select fab cuts, 14.88 loads of trim, 52.73 loads of grinds). The choice/select spread settled at $7.48 a gain of $.66.

The beef market was lower yesterday on a lack of buyers due to a lack of demand. Packers are killing to many cattle given current spot market demand and with a lack of exports right now beef prices are going to be under pressure. We need to see the economic condition of the country straighten out before we can see any type of meaningful rally in the beef and as of right now we haven’t seen signs of that yet. Look for a softer tone to the beef market into next wee.

Futures Market Situation and Outlook:

October live cattle settled at $89.75 a loss of $1.40, December live cattle settled at $89.87 a loss of $2.00, and the February live cattle settled at $90.95 a loss of $1.82. In the feeder cattle pit, October feeder cattle settled at $97.77 a loss of $1.20, November feeder cattle settled at $96.77 a loss of $2.15, and the January feeder cattle settled at $96.07 a loss of $2.47. The reported CME feeder cattle index for 10/22/08 was $97.93 a gain of $.42.

Yesterdays live cattle volume saw 24,386 contracts trade in the pit and 11,976 contracts trade on Globex. Live cattle open interest declined 1,880 contracts to come in this morning at 224,044. Yesterday’s feeder cattle volume saw 3,057 contracts trade in the pit and 672 contracts trade on Globex. Feeder cattle open interest declined 614 contracts to come in this morning at 21,822.

Live and feeder cattle futures settled sharply lower on long liquidation and spec selling linked to economic concerns. Today doesn’t look much better with stock futures trading limit down ahead of the open of the equities trading. Overseas markets are all sharply along with most other commodities markets, which is pointing to a limit down open to cattle futures. Yesterday’s close in the cattle futures markets opens the door to the upper $70’s to lower $80’s basis front month live cattle and the upper $80’s to lower $90’s basis front month feeder cattle. The way the market is falling apart we should be there sooner rather than later, so again if I need to hedge cattle I would do so via put options and leave the upside open in the market for the time being, at which point you can either sell call options or futures on rallies. We are getting into some levels where rolling short futures hedges into put options might also make some sense and resell the futures on a rally. And no matter what start buying cheap breakevens!!! Look for a $2.00-$.300 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.

October 23, 2008


Good Morning from the Chicago Board of Trade,

Cash Cattle Situation and Outlook:

A fairly active fed cattle trade developed in the southern tier of feeding states yesterday with prices running generally $1 higher when compared to last week. USDA was reporting 16,144 head of fed cattle sold in Texas/Oklahoma for mostly $91 live, 4,079 head of fed cattle sold in Kansas for mostly $91 live and $1.43 ½ dressed, 7,465 head of fed cattle sold in Nebraska for $1.36-$1.37, 2,024 head of fed cattle sold in Colorado for $90 live, and 1,717 head of fed cattle sold in Iowa/MN for $1.35-$1.37 dressed. The northern fed cattle sales are running basically steady with last week’s cash sales. It was interesting to see packers come into the market bidding higher money for fed cattle so early in the week. Believe it was a combination of smaller showlists, attractive basis levels, and perhaps a little better demand scenario set to unfold in the coming weeks that led to such a move. Whatever the reason, a steady to $1 higher cash trade given the current climate of the market was certainly a victory for the producer. Trade volumes look pretty good in the south and a little light in the north, however all areas will need to sell more cattle today and tomorrow, which barring any kind of 500-700 pt drop in the Dow that would drag down cattle futures, should take place at steady money with yesterday.

Cattle selling in the sale barns are bringing mostly higher money this week as well. Sioux Falls, SD held their weekly slaughter cattle auction yesterday with prices running generally steady to $1 higher with the beef fats bringing $81-$85 and the Holsteins bringing $79-$82. Slaughter cows are higher with the bulk of the cutter cows bringing $44-$50 and the boners bringing $50-$59. Feeder cattle are mostly $1-$3 higher on the yearling steers and $4-$6 higher on the steer calves. The majority of the 700 lbs-900 lbs yearling steers around the country bring $90-$100, with the bulk of the northern plains steer calves weighing 500 lbs-700 lbs bringing $1.01-$1.16. The recent drop in corn prices in conjunction with the decline in feeder cattle values has feedlot operators wanting to take on some ownership. The recent precipitation on the southern plains has improved prospects for this year’s wheat crop and this has been a supporting factor to the calf market as winter grazers enter the market to take on inventory. I would continue to look for steady to higher money being paid for yearling cattle in the weeks ahead, providing the deferred live cattle futures don’t fall out of bed, as numbers of heavier yearling cattle become tight now that we have the biggest bulk of the fall grass run of cattle behind us. Margins still look positive for backgrounding calves, even after the recent increase in prices the last week or so, and this will be a supportive factor to lightweight cattle prices as long as they can be laid off in March and April feeder futures for a profit.

Cash Beef Situation and Outlook:

Yesterday’s cattle slaughter was estimated at 127,000 head, which would be 11,000 head above last week and 6,000 head below the same day a year ago. The week-to-date kill now stands at 381,000 head, which would be 13,000 head above the same period a week ago, with the industry looking for a 630,000 head production week. The boxed beef market was lower yesterday with the choice cutout closing $.66 lower to settle at $144.38 and the select cutout closing $.63 lower to settle at $137.56. Sales volume was good with 455 loads of beef sold (171.44 loads of choice fab cuts, 154.50 loads of select fab cuts, 48.18 loads of trim, and 81.02 loads of grinds). The choice/select spread settled at $6.82 a loss of $.03.

The beef market was lower again yesterday, however given the recent decline in prices buyers stepped into the market to take on some extra inventory. Choice and select middle meat were once again in need of discounting especially on boneless ribeyes, bone-in strips, top butts, and peeled tenders. There were a few instances of lower transactions taking place on chuck meat, rolls in particular, however for the most part round meat seemed to be in good shape. Boneless beef markets were mostly steady on the cow beef as there is a little better interest from the grinding sector and cow killers report manageable inventories of 90’s to sell. 50’s were under a little pressure yesterday as this weeks fed cattle slaughter is running 13,000 head above last week. The market still anticipates some buying of middle meats ahead of the end of year holiday celebrations, and this is expected to be a supportive factor to cutout prices in the coming weeks. The rally will be limited however given the recent economic turmoil. Exports, while being a little lax the last couple of weeks, are still expected to be supportive to end meats into December. Bottom line is choice cutout values should find some support in the lower $1.40’s and select cutout values should find some support in the mid $1.30’s for the next 30-45 days. Beef exports for the week of October 10-16, 2008 are as follows:

Beef: Net sales of 4,000 MT reported for Mexico (1,400 MT), Canada (1,300 MT), Japan (900 MT), and Taiwan (100 MT), were partially offset by decreases for South Korea (200 MT) and Vietnam (100 MT). Net Sales of 2,500 MT for delivery in 2009 were for South Korea. Exports of 7,700 MT were mainly to South Korea (2,900 MT), Mexico (1,500 MT), Canada (1,100 MT), Japan (900 MT), Vietnam (700 MT), Taiwan (300 MT), and Hong Kong (100 MT).

Futures Market Situation and Outlook:

October live cattle settled at $91.15 a loss of $.67, December live cattle settled at $91.87 a loss of $1.10, and the February live cattle settled at $92.77 a loss of $1.07. In the feeder cattle pit, October feeder cattle settled at $98.97 a loss of $.30, November feeder cattle settled at $98.92 a loss of $.52, and the January feeder cattle settled at $98.55 a loss of $.57. The reported CME feeder cattle index for 10/21/08 was $97.51 a gain of $.12.

Yesterdays live cattle volume saw 16,583 contracts trade in the pit and 10,548 contracts trade on Globex. Live cattle open interest gained 600 contracts to come in this morning at 225,973. Yesterday’s feeder cattle volume saw 2,019 contracts trade in the pit and 873 contracts trade on Globex. Feeder cattle open interest gained 34 contracts to come in this morning at 22,553.

Live and feeder cattle futures took it on the chin yesterday as the sharply lower stock market and outside commodity markets weighed on values. Had it not been for the meltdown in other markets, I feel we would have been higher due to the higher cash cattle trades in the country both feeders and fats. We did rally 200 points off our lows long about 10:30 yesterday morning once word of higher fed cattle sales down in Texas began hitting Chicago, however those gains were erased by the end of the day on general financial weakness in the rest of the markets. I thought we might be higher today because of the better tone to the cash markets, however the stock futures are all over the place again this morning, and I am getting sick of saying it but a lot is going to depend on how the Dow trades today to determine if we can see any kind of rally in the cattle futures. If those guys are so bearish the stock market they should go sell stocks and leave the rest of our markets alone, but that doesn’t seem to be the case just yet. For today, we should find some pretty good support in the October live contract at $90 and December at $91. Nov and Jan feeders should find some support this morning at $98, and taking that out would move us back down to $95. I like Jan/March feeders on a spread along with April and June fats vs. short Feb and August. I would continue to look at some of the back month crush spreads for opportunities to lock in some feeding margins. I also think it wouldn’t hurt to get a little feed coverage down here either via cash or upside option strategies in the corn market. Call or email if you have any questions on spread trades. There were no deliveries against the October live cattle contract last night and keep in mind that Oct feeders will go off the board next Thursday the 30th and Oct fats will go off the board next Friday the 31st. Look for a $.10-$.20 higher open to live and feeder cattle futures this morning providing the Dow isn’t 200 lower. 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.

October 22, 2008


Good Morning from the Chicago Board of Trade,

Cash Cattle Situation and Outlook:

The cash fed cattle market went largely untested yesterday; however there were a few hundred head of cattle that reportedly sold in the Nebraska dressed market at $1.37, though numbers were too small to establish a trend. Packer bids in the south start at $86-$87, with feeders offering cattle at $93-$94. In the north packer bids were hard to find, however suspect that if you were to call a packer he would bid you $1.30-$1.32 dressed. Feeders in the north will be priced at $90-$92 live and $1.44-$1.45 dressed. Another late week trade is expected with prices holding mostly steady with last week. Look for a $90-$91 live market in the south and $88-$90 live or $1.40-$1.42 dressed market in the north. Fat cattle selling through the sale barns are mostly steady to lower with last week at $81-$86. Feeder cattle sales are mostly $2-$3 higher across the board on calves and yearling’s, and slaughter cows are mostly $1-$2 better.

Cash Beef Situation and Outlook:

Yesterday’s cattle slaughter was estimated at 127,000 head, which would be 1,000 head above last week and 3,000 head below the same day a year ago. The week-to-date kill now stands at 254,000 head, which would be 2,000 head above the same period last week with the industry looking for a 630,000 head production week. The boxed beef market was mixed yesterday with the choice cutout closing $.52 lower to settle at $145.04 and the select cutout closing $.16 higher to settle at $138.19. Sales volume was light with 267 loads of beef sold (97.45 loads of choice fab cuts, 94.03 loads of select fab cuts, 20.03 loads of trim, and 55.69 loads of grinds). The choice/select spread settled at $6.85 a loss of $.68.

It was the same old story in the beef market yesterday with packers searching for a clearing level on most rib, loin, chuck, and round items. There is still a lot of uncertainty concerning forward beef demand, and as such major buyers of boxed beef are securing product for their most immediate needs. Look for the beef market to remain steady to soft until the end of the week, when we could see a little better demand unfold.

Futures Market Situation and Outlook:

October live cattle settled at $91.82 a gain of $1.00, December live cattle settled at $92.97 a gain of $.90, and the February live cattle settled at $93.85 a gain of $.70. In the feeder cattle pit, October feeder cattle settled at $99.27 a gain of $.62, November feeder cattle settled at $99.45 a gain of $.85, and the January feeder cattle settled at $99.12 a gain of $1.17. The reported CME feeder cattle index for 10/20/08 was $97.39 a loss of $.04.

Yesterday’s live cattle volume saw 18,083 contracts trade in the pit and 10,351 contracts trade on Globex. Live cattle open interest gained 922 contracts to come in this morning at 225,382. Yesterday’s feeder cattle volume saw 2,065 contracts trade in the pit and 596 contracts trade on Globex. Feeder cattle open interest gained 170 contracts to come in this morning at 22,519.

It was another slow day in the CME cattle pits; however prices managed to close higher by the closing bell on short covering and ideas of a stabilizing cash fed cattle market for this week. There were 24 new deliveries against the October live cattle contract last night with MF Global putting out 10 loads, RJO putting out 9 loads, and Rosenthal putting out 5 loads, all out of Norfolk, NE. Rosenthal received all 24 loads and I would imagine that he stops them all. This morning most all of the outside markets are lower along with the stock market so we are likely to see a lower open to cattle futures as well. We will continue to look for support in the October live cattle futures at $90 and in December at $91. Feeder cattle should find some support on an early morning break at $98. 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.

October 21, 2008


Good Morning from the Chicago Board of Trade,

Cash Cattle Situation and Outlook:

Yesterdays fed cattle trading was mostly non-existent, except for those cattle selling through auction. Bids from packers and offers from feedlots were poorly defined yesterday as participants spent the day putting together this weeks showlists and watching the futures board. A look at last weeks feedlot sales shows Texas, Oklahoma, and New Mexico feedlots selling 53,443 head of fed cattle for mostly $90 live, Kansas feedlots selling 38,790 head of fed cattle for $90 live and $1.42 dressed, Nebraska feedlots selling 55,479 head of fed cattle for $87-$90 live and $1.36-$1.37 dressed, Colorado feedlots selling 6,683 head of fed cattle for $89-$90 live and $1.39 dressed, and Iowa/MN feedlots selling 25,938 head of fed cattle for $83-$85 live and $1.35-$1.39 dressed. All the above-mentioned weekly totals include negotiated cash and negotiated grid sales as reported to the USDA. Sales volumes look pretty good in all trading areas, which is leading to a mostly smaller showlist offering in the south, with a slight increase in numbers for sale in the north.

So far this week both the stock market and the futures market seem to have found a little equilibrium, and as such we have yet to see the large volatile swings that we have been forced to deal with the last couple of weeks. Some of this stabilization has also seemed to show up in the beef market. While volume of beef sales was rather light yesterday, which is typical for a Monday, the market was some higher. With shorter numbers for sale in the south and fewer contract cattle in that part of the country, feeders may be able to hold the cash fed cattle market steady in Texas and Kansas this week. This of course barring the futures market doesn’t fall out of bed. As per our latest cattle on feed report numbers of available fed cattle are very manageable, except for the northern tier of feeding country. There still remain plenty of heavy fed cattle in that part of the country that still need to be marketed. Packer inventories of beef are said to be in better shape coming out of last week, however near term demand remains an issue. For these reasons though, I am going to call for a fed cattle market that trades steady to better in the south at $90-$91 and mostly steady in the north at $87-$90/$1.36-$1.37.

Fed cattle selling through the Midwest auction markets are mostly steady to $1 lower to begin the week, with tops on the beef fats ranging from $81-$86 and on the Holsteins from $78-$81. Slaughter cows are mostly steady at $42-$51, with numbers of cows said to be short in certain parts of the country. Feeder cattle markets are starting the week on a firmer tone, especially on the lightweight calves that are destined for some sort of winter backgrounding program. Oklahoma City, OK had approximately 6,500 head of cattle on offer with that market being called $1-$3 higher on the yearling cattle and $5-$10 higher on the calves. The bulk of the 600 lbs-900 lbs yearling feeder steers in OKC yesterday were bringing $95-$107, with the 4-6 weight steer calves bringing $105-$130. Faith, SD was reporting similar results on their 400 lbs – 600 lbs steer calves yesterday as well with a large offering of 6,700 head of cattle on hand. Better moisture prospects on the southern plains getting this years wheat crop off to a good start is the main reason behind the strength in the feeder cattle market. The lower corn market is a help in this regard also. Look for further strength in the cash feeder cattle market as the week wears on.

Cash Beef Situation and Outlook:

Yesterdays kill was estimated at 127,000 head, which would be 1,000 head above last week and 2,000 head below the same day a year ago. The industry will be looking for a 630,000 head production week. The boxed beef market was higher yesterday with the choice cutout closing $1.07 higher to settle at $145.56 and the select cutout closing $.54 higher to settle at $138.03. Sales volume was light with 217 loads of beef sold (84.15 loads of choice fab cuts, 69.99 loads of select fab cuts, 11.25 loads of trim, 52.02 loads of grinds). The choice/select spread settled at $7.53 a gain of $.53.

The boxed beef market was slow to develop yesterday as most participants spent the day going over inventory positions after the weekend. Weekend beef clearance was rated as slightly above average with most of the movement confined to cheaper cuts of beef namely ground beef and certain round and chuck items. With that said though, a lack of exports the last couple of weeks continues to put more chuck and round meat on our domestic market, which had packers discounting choice and select chuck rolls, shoulder clods, and gooseneck rounds during yesterday’s session. Choice boneless strip loins were also in need of some discounting yesterday, however select peeled tenderloins found a little better demand and higher pricing was the net result. Boneless beef markets were also a little higher yesterday as better ground beef movement over the weekend had grinders back in the market looking for product. Imported beef values were under some pressure as well as traders get imported product in line with domestic beef values. Packers still struggle trying to find a clearing level on choice and select middle meats. With that said though, many feel that with a better sold position coming into this week and the fact that many rib and loin items are at or below year ago levels that this will begin to spur some demand. Consumer spending habits remain a concern given the recent financial and credit woes, however many remain optimistic towards beef prices later this week. I will continue to call for stabilization in the beef market towards the end of this week and into the first part of next.

Futures Market Situation and Outlook:

October live cattle settled at $90.82 a loss of $.22, December live cattle settled at $92.07 a loss of $.47, and the February live cattle settled at $93.15 a loss of $.10. In the feeder cattle pit, October feeder cattle settled at $98.65 a gain of $.25, November feeder cattle settled at $98.60 a loss of $.05, and the January feeder cattle settled at $97.95 a loss of $.10. The reported CME feeder cattle index for 10/17/08 was $97.43 a gain of $.11.

Yesterdays live cattle volume saw 18,723 contracts trade in the pit and 9,915 contracts trade on Globex. Live cattle open interest declined 849 contracts to come in this morning at 224,647. Yesterday’s feeder cattle volume saw 3,502 contracts trade in the pit and 877 contracts trade on Globex. Feeder cattle open interest declined 800 contracts to come in this morning at 22,358.

Live and feeder cattle futures settled mostly lower yesterday as the market contended that the increase in heavy weight placements of cattle in Friday’s cattle on feed report was a little negative December and February cattle. October was under pressure due to liquidation ahead of the contracts expiration. The futures market still has a hard time holding a rally, and with most of the outside markets lower again this morning, we will likely see a lower open to live and feeder cattle futures. There was active spreading yesterday with accounts selling the front of the live cattle board and buying the back, I think mostly in response to the decline in lightweight cattle placements in the cattle on feed report and higher corn futures. Overnight news was rather quiet; however items of interest are the Justice Department trying to block the JBS Swift acquisition of National Beef Packing. Deliveries last night showed 8 new loads posted against the October live cattle contract out of Norfolk, NE, and 25 loads retendered from Friday in Norfolk, with all 25 loads being demanded for by Rosenthal. Delivering the 25 retenders was Mann Financial and delivering the 8 new loads were RJO 1, Rosenthal 5, and Oak 2. For today’s trade, October needs to hold support at $90 and below that $89. The $89 area really needs to hold by the end of the week to keep further losses in the entire cattle complex at bay. December should find a little support this morning at $91 and below that $90 needs to hold by the end of the week. Feeder cattle should find some support this morning at $98 down to $97.50, and a breach of the bottom support area would take the market down to test contract lows at $95. On a weekly basis, feeder cattle really need to close back above the $100 area in order to negate some of the recent bearishness. Look for a $.20-$.40 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.

October 20, 2008


Good Morning from the Chicago Board of Trade,

Cash Cattle Situation and Outlook:

We left last week with a fed cattle that trades mostly $2 lower live and $3-$4 lower dressed, and a cattle-on-feed report that should be construed as mildly friendly from a numbers standpoint. A quick look at the on feed report shows cattle on feed October 1, 2008 at 10.415 mil head or 95% of a year ago (pre-report estimate 95.5%), placed during the month of September, 2.281 mil head or 94.5% of a year ago (96.5%), and marketed during the month of September, 1.812 mil head or 106.8% of a year ago (106.4%). The report shows a continued supply friendly situation in the cattle market with placements coming in below expectations and marketing’s coming in slightly above expectations, with overall on feed numbers 5% below a year ago. The placement breakdown showed a 19% increase in cattle weighing over 800 lbs, which should have been expected and shows that we will have cattle to kill into the first quarter of 2009. The biggest declines in placements came in under 700 lbs category where we see a reduction in placements of 22% compared to a year ago. Numbers on feed and placements continue to run below year ago levels in the southern feeding states of Texas, Kansas, and Oklahoma, with numbers on feed and placements at or above year ago levels in the north. This continues to show us that we need to be doing a better job of marketing cattle in the north. The report along with the higher outside markets should prompt a $.25-$.50 higher open in cattle futures trading this morning.

Last weeks cash fed cattle market ended at mostly $90 live on the southern plains and $87-$90 live or $1.36-$1.37 dressed in the north, all of which would be $2-$3 lower live and $4-$5 lower dressed when compared to the week before. The cash feeder cattle market was mixed last week with early week declines of $3-$5 noted, however the market straightened out to trade as much as $4-$5 higher on the calves in the northern plains sale barns. The slaughter cow market was mostly $2-$4 lower last week as well. Looking into this week, we could possibly see a stabilization in the cash fed cattle market as movement last week seemed to be adequate in most trading areas, numbers of fed cattle remain manageable, the boxed beef market could be in the process of finding a bottom, and the futures might have put in a near term low last week. The feeder cattle market could find a little support as well, as a better outlook to winter wheat pastures down south and stabilization in fed cattle prices along with lower feed grain markets could be a supporting factor. Slaughter cows will likely be under a degree of pressure as we see more numbers coming to town in the coming weeks. We will look for steady markets early this week, with the chance of modestly higher by the end of the week.

Cash Beef Situation and Outlook:

Last weeks cattle slaughter was estimated at 628,000 head, which would be 27,000 head below the previous week. For the week, the choice cutout lost $3.90 and the select cutout lost $5.04 on reduced movement of 959 loads of fabricated cuts through last Thursday. Friday saw similar losses of $1.12 on the choice cutout to settle at $144.49 and $.71 on the select cutout to settle at $137.49. Sales volume was decent on Friday with 334 loads of beef sold (98.98 loads of choice fab cuts, 85.35 loads of select fab cuts, 82.92 loads of trim, 66.76 loads of grinds). The choice/select spread settled at $7.01 a loss of $.41 for the day, however a gain of $.74 for the week.

Last weeks beef market was once again characterized by concerns over the domestic and world economy and how it would affect beef demand. Export sales have slacked off in recent weeks because of this and that has been putting more product on the domestic market. All primal sections throughout the beef carcass saw losses of 1%-6% last week, however it is thought that with packers cutting kills late in the week and many items throughout the carcass trading at or below year ago levels, that this may spur some demand late this week or early next. Packers did get some back logged product moved last week, which has them coming into this week with a better sold inventory position. I will look for a steady to softer beef market early this week, with some stabilization late in the week.
Futures Market Situation and Outlook:
On Friday, October live cattle settled at $91.05 a gain of $1.60, December live cattle settled at $92.55 a gain of $1.72, and the February live cattle settled at $93.25 a gain of $1.70. In the feeder cattle pit, October feeder cattle settled at $98.40 a gain of $1.60, November feeder cattle settled at $98.65 a gain of $1.92, and the January feeder cattle settled at $98.05 a gain of $1.42. The reported CME feeder cattle index for 10/16/08 was $97.32 a gain of $.01.

Friday live cattle volume saw 18,544 contracts trade in the pit and 9,211 trade on Globex. Live cattle open interest declined 526 contracts to come in this morning at 225,548. Friday’s feeder cattle volume saw 2,745 contracts trade in the pit and 1,740 trade on Globex. Feeder cattle open interest declined 44 contracts to come in this morning at 23,158.

It was another week of the live and feeder cattle futures being led around (almost tick for tick) by the stock market. It was interesting to see on Friday though, that perhaps the live and feeder cattle futures were trading on their own merits, as stock futures spent most of Thursday night trading sharply lower with cattle futures trading $1 higher, and most of the strength in cattle futures carrying over into the day session on Friday. This morning we should see a better start to the stock market along with many other commodity markets, which along with a friendly on feed report and ideas that perhaps the cash markets may stabilize late this week should have cattle futures trading higher for the first part of this week. I think we could go and attempt to fill some chart gaps above the market at $97.50 basis December live cattle and $100.50 basis the November feeder cattle contract early this week, so you might want to trade it that way early. There is still going to be a lot of volatility so to protect long futures with put options or just outright trading some call options might not be a bad idea. Deliveries on Friday saw 26 new loads posted against the October live cattle contract out of Norfolk, NE. We will see if any of these are stopped tonight. Look for a $.25-$.50 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.

October 14, 2008


Good Morning from the Chicago Board of Trade,

Cash Cattle Situation and Outlook:

The cash fed cattle market was quiet as participants spent the day putting together showlists and distributing them. The offering looks a little larger in the north and smaller in the south as sales volumes were moderate at best in the northern sections of feeding country last week. There were no packer bids being put out yesterday with offering prices starting the week at $96/$1.46-$1.48. I would look for a late week fed cattle trade that develops at steady to slightly higher money with last week (i.e. $93-$94 in the south and $90-$92/$1.40-$1.42 in the north). Starting the week we see sale barn cattle all trading at $1-$2 lower money. This should continue to be the case until midweek when prices begin to stabilize.

Cash Beef Situation and Outlook:

Slaughter numbers were not released by the USDA yesterday due to the Columbus Day holiday. The boxed beef market was lower yesterday with the choice cutout closing $.43 lower to settle at $149.08 and the select cutout closing $2.01 lower to settle at $141.23. Sales volume was light with 181 loads of beef sold (56.29 loads of choice fab cuts, 83.26 loads of select fab cuts, 3.81 loads of trim, 37.30 loads of grinds). The choice/select spread settled at $7.84 a gain of $1.58.

The beef market was pretty quiet yesterday as participants spent the day going over inventory positions and trying to get a handle on demand. Weekend beef clearance was rated as below expectations. There remains a lot of uncertainty around the beef market and near term demand and many would like to see some sort of stabilization in the equity markets before making any major marketing decisions. Most middle meat and end meat items needed further discounting yesterday in the wake of last weeks larger kill. I would look for most beef items to begin stabilizing by midweek.
Futures Market Situation and Outlook:

October live cattle settled at $91.00 a gain of $1.87, December live cattle settled at $93.00 a gain of $1.70, and the February live cattle settled at $93.45 a gain of $1.62. In the feeder cattle pit, October feeder cattle settled at $96.95 a gain of $1.50, November feeder cattle settled at $96.17 a gain of $1.12, January feeder cattle settled at $96.82 a gain of $1.77. The reported CME feeder cattle index for 10/10/08 was $97.30 a loss of $3.25.

Live and feeder cattle futures settled higher yesterday on short covering linked to gains in the stock market. The Dow Jones had its biggest one day rally on record yesterday after several sessions of utter capitulation. This helped stabilize the severe losses in the cattle futures complex and I would expect to see more of the same early today. While I think we can see a steady to higher tone to the cash cattle and beef markets by late in the week, futures are likely going to price this in during the first part of the week and fade slightly late in the week. We could easily see another $2-$3 higher from yesterday’s settlements in both live and feeder cattle futures by Thursday or Friday of this week, before some profit taking could set in. Deliveries overnight showed 37 retenders from Friday and 7 new loads posted last night. There were no demands posted for any of the loads yesterday. Look for a $.50-$1.00 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.

October 13, 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 $4-$5 lower live and $5-$7 lower dressed at $92-$93 in the south and $88-$90 live or $1.38-$1.40 dressed in the north. Capitulations in the futures market along with the uncertainty in the financial markets were all catalysts for the lower trade. Feeder cattle markets were lower as well to the tune of $3-$8. Here too, a futures market (both fats and feeders) in free fall and worries over the credit market and forward demand for beef, along with ample numbers of feeder cattle coming to market, had buyers looking to procure replacement cattle at lower money. Slaughter cow markets were also sharply lower last week. Looking into this week, we may be able to see the cash fed cattle market stabilize this week, as so far this week, there seems to be a little more confidence coming back into the financial and banking systems. We are by far out of the woods in this situation, however perhaps we can stem the free fall that futures and cash have been in for the last couple of weeks. Fed cattle numbers will be at their tightest of the year from now until the end of November, and with the steep losses we have seen in the beef market, we may see beef buyers step back into the market and take on some inventory. Look for a fed cattle market that trades steady to possibly $1 higher this week. Feeder cattle and slaughter cow markets look to be a little lower early this week, however could firm up towards the weekend.

Cash Beef Situation and Outlook:

Last weeks cattle slaughter was estimated at 650,000 head, which would be 20,000 head above the same period the previous week. The boxed beef market was $2.25 lower on choice and $2.70 lower on select product through last Thursday on increased movement of 1,039 loads of fabricated cuts sold. Friday saw the choice cutout down $.66 to settle at $149.51 and the select cutout down $.65 to settle at $143.24. Sales volume on Friday was light with 231 loads of beef sold (70.98 loads of choice fab cuts, 80.23 loads of select fab cuts, 19.46 loads of trim, 59.97 loads of grinds). The choice/select spread settled at $6.27 a gain of $.01.

Last weeks boxed beef market was characterized by uncertainty over how the financial fall out would affect beef demand. Buyers were only interested in buying for their absolute immediate needs, and only ordering product when they saw it moving out of their stores. As a result packers were offering deep discounts throughout the entire carcass in order to spur demand. The only bright spot in the carcass last week was choice and select ribs were in the case of select rib cuts, some closed higher on the day. There are now several bargains in the beef market in terms of certain middle meat cuts trading at or below end meat items, which should begin to spur some buyer interest. Export orders really backed off last week as well; however we could see some of that return with the sharply lower dollar this week. I would look for the boxed beef market to stabilize by the middle of this week.
Futures Market Situation and Outlook:
On Friday, October live cattle settled at $89.12, December live cattle settled at $91.30, February live cattle settled at $91.82, October feeder cattle settled at $95.45, November feeder cattle settled at $95.05, and the January feeder cattle settled at $95.05 all of which would be down the $3.00 limit.

Live and feeder cattle futures all closed down the 300 point daily limit on Friday, except for Feb 10 fats and Sept 09 feeders. The meltdown on Wall Street was to blame. This morning the Dow is expected to open 300-400 points higher on news the U.S. government as well as European governments would guarantee bank loans in order to restore confidence in the financial and credit system. This should have a profound affect on cattle futures early this week, and should help to restore some confidence in our market as well. I think once we get some of the panic out of the market we should be able to stabilize the cash cattle and beef markets, which in turn should help stabilize the futures. As I pointed out above, we aren’t out of the woods yet, but all these markets are extremely oversold and due for at least a corrective bounce. Deliveries on Friday saw 37 new loads posted against the October contracts out of Norfolk, NE. Look for a $.50-$1.00 higher open to live and feeder cattle futures this morning, and hopefully we can hold onto the gains for once by the end of the day. 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.

October 10, 2008


Good Morning from the Chicago Board of Trade,

Cash Cattle Situation and Outlook:

We saw a continued light fed cattle trade yesterday at prices steady with early week declines at $92 live in the south and $1.37-$1.40 dressed in the north. Trade volumes for the week still remain light and we are going to need to move more cattle by the end of the week. Look for further cleanup trade today at or slightly below the above mentioned prices. Next week’s cash market doesn’t look much better right now, unless we see some sort of stabilization in the equity markets, which in turn help stabilize cattle futures and the cash cattle market. Going home for the weekend all classes of fat cattle, feeder cattle, and slaughter cows are trading $2-$5 lower in the auction markets.

Cash Beef Situation and Outlook:

Yesterdays kill was estimated at 126,000 head, which would be even with a week ago and 2,000 head below the same day a year ago. The week-to-date kill now stands at 498,000 head, which would be 4,000 head below the same period last week with the industry looking for a 630,000 head production week. The boxed beef market was lower yesterday with the choice cutout closing $.30 lower to settle at $150.17 and the select cutout closing $.78 lower to settle at $143.89. Sales volume was good with 333 loads of beef sold (149.32 loads of choice fab cuts, 91.02 loads of select fab cuts, 39.53 loads of trim, 52.85 loads of grinds). The choice/select spread settled at $6.27 a gain of $.48.

The beef market was lower again yesterday, however some of the steep price declines seem to have subsided and the load counts are picking up. Middle meats remain a problem to move for quick ship, however there was some interest in pricing ribs and loins going forward. End meats were mostly steady yesterday as lower priced chuck and round meat will be main featured items at retail in the coming weeks. Look for a sideways to lower beef trade going into early next week.
Futures Market Situation and Outlook:

October live cattle settled at $92.12 a loss of $.32, December live cattle settled at $94.30 a loss of $.65, and the February live cattle settled at $94.82 a loss of $.27. In the feeder cattle pit, October feeder cattle settled at $98.45 a loss of $.45, November feeder cattle settled at $98.05 a loss of $.27, and the January feeder cattle settled at $98.05 a gain of $.12. The reported CME feeder cattle index for 10/8/08 was $100.85 a loss of $1.14.

Yesterdays live cattle volume saw 22,826 contracts trade in the pit and 10,123 trade on Globex. Live cattle open interest declined 2,077 contracts to come in this morning at 235,443. Yesterday’s feeder cattle volume saw 4,896 contracts trade in the pit and 2,004 contracts trade on Globex. Feeder cattle open interest declined 514 contracts to come in this morning at 23,959.

Live and feeder cattle futures continue to search for a bottom as the market opened modestly higher yesterday only to sell off on more economic worries. After the close the Dow Jones plunged 700 points lower pushing Globex cattle futures 200 points lower. Overnight Globex cattle futures are trading near limit down, so that is how we will likely open this morning in the pit. There was a supply/demand report released this morning which looks a little negative to the grain market on increased acreage for corn and beans. The USDA for the most part left the beef numbers alone, although they did raise this year and next years production estimates 15 mil and 100 mil lbs respectively on increased cow slaughter and increased feedlot placements for next year. They also raised this years beef exports 35 mil lbs and left next years export number alone. There were no new deliveries against the October live cattle contract yesterday. We will be sharply lower on the open today as we are trading in step with the Dow Jones. When the Dow rallies cattle rally and when the Dow breaks, cattle break. Until this stock market mess gets itself worked out we will continue to move lower in the cash cattle and futures markets. Look for a near limit down 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.

October 9, 2008


Good Morning from the Chicago Board of Trade,

Cash Cattle Situation and Outlook:

We saw an active fed cattle trade develop on the northern and southern plains yesterday at sharply lower money when compared to the week before. Fed cattle were trading at mostly $92-$93 in Texas and Oklahoma, $91-$92 live and $1.46 dressed in Kansas, and $88-$91 live or $1.38-$1.42 dressed in Nebraska. Compared to last week live sales are mostly $4-$5 lower and dressed sales are mostly $5-$7 lower on moderate movement. The sale barn cattle were sharply lower yesterday as well with Sioux Falls, SD calling their fed cattle market $4-$5 lower on the beef fats, $3-$4 lower on the Holsteins, and $4-$5 lower on the slaughter cows. The tops on the choice beef fats in Sioux Falls yesterday was $84-$86 with the Holstein steers bringing $77-$78. Feeder cattle are sharply lower as well coming into midweek, with sales like Torrington, WY, El Reno, OK, and Kearney, NE all calling their feeder cattle sales $3-$6 lower. Most of the 6-8 weight beef steers destined to a feedlot bringing $90-$105.

Cash Beef Situation and Outlook:

Yesterdays kill was estimated at 122,000 head, which would be 3,000 head below the same day last week and 2,000 head below the same day a year ago. The week-to-date kill now stands at 372,000 head, which would be 4,000 head below the same period a week ago with the industry looking for a 635,000 head production week. The boxed beef market was lower yesterday with the choice cutout closing $4.59 lower to settle at $150.47 and the select cutout closing $1.89 lower to settle at $144.67. Sales volume was good with 437 loads of beef sold (141.88 loads of choice fab cuts, 171.37 loads of select fab cuts, 29.56 loads of trim, 94.56 loads of grinds). The choice/select spread settled at $5.80 a loss of $2.70.

The beef market was lower again yesterday with discounts once again surfacing throughout most of the carcass components. With the sharply lower markets though finally came a little better movement, as some were viewing certain beef items as having value and were willing to take on some extra inventory. There still remains a lot of concern over how the global economic meltdown will affect beef demand in the coming months. As such many are on the sidelines buying only on an as need basis. This is uncertainty is showing up overseas also as we see export sales back way off last week. Look for a softer trend to the beef market for the rest of the week and perhaps we can stabilize the market in the upper $1.40’s basis the choice cutout in the coming sessions. Beef export sales and shipments for the week of September 26-October 2, 2008 are as follows:
Beef: Net sales of 3,800 MT were primarily for South Korea (1,100 MT), Canada (1,000 MT), Japan (700 MT), Vietnam (600 MT), and Hong Kong (400 MT). Decreases were reported for Russia (600 MT). Exports of 11,700 MT were mainly to South Korea (3,900 MT), Mexico (3,700 MT), Japan (1,200 MT), Canada (1,100 MT), Vietnam (700 MT), Taiwan (400 MT), and Hong Kong (300 MT).
Futures Market Situation and Outlook:

October live cattle settled at $92.45 a loss of $.95, December live cattle settled at $94.95 a loss of $.15, and the February live cattle settled at $95.10 a loss of $.02. In the feeder cattle pit, October feeder cattle settled at $98.90 a loss of $.30, November feeder cattle settled at $98.32 a loss of $.32, and the January feeder cattle settled at $97.92 a gain of $.30. The reported CME feeder cattle index for 10/7/08 was $101.99 a loss of $.59.

Yesterdays live cattle volume saw 35,504 contracts trade in the pit and 15,213 contracts trade on Globex. Live cattle open interest declined 1,825 contracts to come in this morning at 237,553. Yesterday’s feeder cattle volume saw 5,570 contracts trade in the pit and 2,244 contracts trade on Globex. Feeder cattle open interest declined 604 contracts to come in this morning at 24,483.

It was another wild day in the CME cattle pits with many live and feeder cattle contracts trading limit down or close to limit down early in the session on the sharply lower cash fed cattle market, only to recover going into the close on hedge lifting, short covering, and bottom picking by speculators. I don’t know if yesterday was the bottom or not, but we did see some price action that I was looking for and indicative of putting a bottom in the cattle market (i.e. trading cash sharply lower, trading futures sharply lower, and the futures market recovering late in the day). The stock market was all over the place yesterday as well, which was an influencing factor in the cattle market. In the stock market too, I don’t know if we made a bottom yet, but I think it is close. We saw Central Banks in the U.S. and Europe cut interest rates two nights ago, and three Central Banks in Asia cut rates last night, all of which has overseas markets trading higher overnight and our market pointing to a higher open this morning. Throughout all of this one thing that has been happening the last couple of days is that the credit markets are loosening up and banks are starting to do business with each other again so there are some positives for at least a corrective rally in the stock market for the near term. Most live and feeder cattle issues were able to come back and close above Monday’s limit down lows, which is encouraging, however we will need to hold onto these lows on a closing basis by Friday afternoon. The only contract that wasn’t able to come back and close above its low on Monday was the October live cattle, which was prohibited from doing so by the sharply lower cash fed cattle market. We will need to see some follow through to the upside today and tomorrow in order to keep a corrective rally alive into next week. Again, much will depend on how the stock market holds up the rest of this week and into the first part of next. The “Goldman’s” are rolling out of November feeder cattle into January, so this is going to keep a little pressure on the Nov contract and support Jan for the rest of the week on a closing basis. There were no new deliveries against October live cattle last night, however the 10 loads delivered on Tuesday were retendered and demanded for by Newedge (believe this to be a packer). I would look for a little higher start to cattle futures trading this morning, and would probably try to buy fats and feeders on a break today if one presented itself. Still like some sort of upside call strategy, either outrights or spreads, to take advantage of a corrective rally higher in the coming weeks. If selling cash cattle in a down market here, I would reown those sales via call options as well. 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.

October 8, 2008


Good Morning from the Chicago Board of Trade,

Cash Cattle Situation and Outlook:

Yesterday’s cash cattle market was largely untested except for a handful of cattle trading in Nebraska at $1.42 dressed. The way it looks right now the southern feedlot trade is likely going to take place somewhere around $93-$95 and the northern dressed trade is going to be right around $1.42 give or take a dollar by Friday afternoon. The sale barn trade is showing fat cattle off by $2-$3, feeder cattle off by $2-$3, and slaughter cows off by $1-$2. The volatility in the cash market is going to keep up with the volatility in the futures market, as the futures are leading the cash lower at this point. Once the futures get straightened out, the cash should get straightened out.

Cash Beef Situation and Outlook:

Yesterdays kill was estimated at 127,000 head, which would be 1,000 head above last week and 1,000 head below the same day a year ago. The week-to-date kill now stands at 250,000 head, which would be 1,000 head below the same period a week ago with the industry looking for a 635,000 head production week. The boxed beef market was lower with the choice cutout closing $1.10 lower to settle at $155.06 and the select cutout closing $.45 lower to settle at $146.56. Sales volume was light with 273 loads of beef sold (116.80 loads of choice fab cuts, 89.85 loads of select fab cuts, 18.98 loads of trim, 47.14 loads of grinds). The choice/select spread settled at $8.50 a loss of $.65.

The beef market was lower yesterday as there is as much uncertainty in the beef trade as there is in the cash cattle and futures trade right now. There were a few bright spots in the cutout yesterday though, as we saw some higher money being paid on ribeye’s, short ribs, and top butts. Thin meats, coarse ground, and boneless beef markets were mostly lower yesterday as were certain round items. Here too, the beef market will be choppy and volatile until more calm comes into the global equity markets. No one is willing to take on inventory unless it is on an as need basis or the price looks cheap enough. Look for more of the same the rest of the week.

Futures Market Situation and Outlook:

October live cattle settled at $93.40 a gain of $.80, December live cattle settled at $95.10 a gain of $.32, and the February live cattle settled at $95.12 a gain of $.42. In the feeder cattle pit, October feeder cattle settled at $99.20 a gain of $1.52, November feeder cattle settled at $98.65 a gain of $.85, and the January feeder cattle settled at $97.62 a gain of $.22. The reported CME feeder cattle index for 10/6/08 was $102.58 a loss of $1.53.

Yesterdays live cattle volume saw 24,959 contracts trade in the pit and 14,576 contracts trade on Globex. Live cattle open interest gained 644 contracts to come in this morning at 239,492. Yesterday’s feeder cattle volume saw 5,350 contracts trade in the pit and 1,433 contracts trade on Globex. Feeder cattle open interest declined 748 contracts to come in this morning at 25,088.

Live and feeder cattle futures settled mostly higher yesterday on short covering from the massive sell on Monday. However, futures settled well off their highs of the day as the Dow Jones Industrial Average faded late in the day to close 500 points lower. Overnight we see a massive sell off in Asian and European stock markets, which has Dow futures pointing to another 200 point lower open this morning as of this writing. An example of overnight volatility shows soybean futures going from $.09 lower around 6:30 pm to almost $.63 higher by 10:00 pm, only to show up $.11 lower by 5:00 am this morning. There was panic selling across the globe last night as the European banking system seems to be in worst shape than ours, and investors are pulling money out of mutual funds and hedge funds around the world because of this. All of this will have all of our markets opening lower this morning, sharply lower in some instances, and our cattle market won’t be any different. Our cattle market isn’t going to do anything but keep going lower until the stock market straightens out. And when that happens is anybody’s guess right now, but I think it is getting close as we are seeing panic and irrational selling in all of the World’s stock markets right now. It’s the same as in our commodity markets, when people can’t take it anymore and they get out, whether they are long or short, that is when you usually post an important top or bottom in a market, and the same type of scenario seems to be playing out in the equity markets right now. A good clue as to when we may have seen a bottom in the cattle market, would be to see a day when we trade sharply lower to limit down early and come back to close higher by the end of the day, and so far we haven’t seen that type of price action yet. Closing below Monday’s lows of $94.77 in December live cattle and $97.80 in November feeder cattle will keep the market heading lower in the near term. Volatility is going to be huge until we get this mess straightened out, so you need to be very careful if your trading futures. If your worried about protecting inventory buy puts, otherwise as you are selling cattle in this down market, buy them back with call options, as we will come out of this at some point. Deliveries against the October contract started Monday with 16 loads posted. Those 16 loads were retendered last night and demaded for by NEWEDGE. There were 10 new loads delivered last night by Cadent in Norfolk, NE, with FC Stone and Oak receiving them. I would look for another $.25-$.50 lower open to live and feeder cattle futures this morning and we will have to see how we handle Monday’s lows by the close of trading today. Trade Well!!!

UPDATE: Most of what I wrote this morning was before 6:00 am. At 6:00 am the Fed announced they cut the Fed Fund rate by 50 basis points to 1.5%. This rallied the overseas stock markets and Dow and S&P futures shortly after the news. At the same time overnight cattle futures were trading $.30-$.60 lower, as of 7:30 am cattle Globex cattle futures are trading closer to steady. We are trading almost tick for tick with Dow futures, so wherever they are by the open is where cattle futures will open.

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
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