November 28, 2008
Good Morning from the Chicago Board of Trade,
Cash Cattle Situation and Outlook:
The cash fed cattle trade became active after the close of futures trading on Wednesday with prices running generally $2-$3 higher at $90 live in the south and $1.43 dressed in the north. Trade volumes look like there was close to 40,000 head of cattle sold in all trading areas according to the USDA afternoon slaughter cattle report, however I will report on actual numbers on Monday once everything is counted and reported to the USDA today. Feeder cattle and slaughter cow markets were also starting to firm up Tuesday and Wednesday after last weeks huge declines. I think we can go into next week looking for a firmer tone to all classes of cattle. I will call for a steady to $1 higher market for fats and feeders, and mostly steady for slaughter cows. We probably won’t rally straight up, but I think we could have put a low in the fed cattle market last week for a little while.
Cash Beef Situation and Outlook:
Wednesday’s cattle slaughter was estimated at 127,000 head, which was 2,000 head above last week and 2,000 head below the same day a year ago. The week-to-date kill stands at 384,000 head compared to 363,000 head for the same period a week ago. The boxed beef market was lower Wednesday with the choice cutout closing $1.55 lower to settle at $152.39 and the select cutout closing $1.98 lower to settle at $142.03. Sales volume was good with 326 loads of beef sold (102.68 loads of choice fab cuts, 108.91 loads of select fab cuts, 27.20 loads of trim, 87.64 loads of grinds). The choice/select spread settled at $10.35 a gain of $.43.
The beef market was lower on Wednesday which should have been expected given the proximity of the Thanksgiving holiday. I wouldn’t expect to see much out of the boxed beef market today either as many will be out of the office for an extended weekend. Most chuck and round items were trading at lower money on Wednesday, however there were a few instances of higher rib and loin cuts. Boneless beef items were under pressure yesterday with the biggest declines being found in the boneless cow 90’s. Next week I would look for a lower trade early values firming up late as retail and wholesale interests cover their first of the month needs and finish buying middle meats for end of the year holiday celebrations.
Futures Market Situation and Outlook:
On Wednesday, December live cattle settled at $87.42 a gain of $1.60, February live cattle settled at $88.15 a gain of $.82, and the April live cattle settled at $89.70 a gain of $.55. In the feeder cattle pit, January feeder cattle settled at $92.20 a gain of $.80, March feeder cattle settled at $92.92 a gain of $.67, and the April feeder cattle settled at $93.35 a gain of $.95. The reported CME feeder cattle index for 11/25/08 was $92.70 a gain of $.84.
Wednesday’s live cattle volume saw 17,407 contracts trade in the pit and 7,111 contracts trade on Globex. Live cattle open interest declined 915 contracts to come in this morning at 212,918. Wednesday’s feeder cattle volume saw 1,385 contracts trade in the pit and 504 contracts trade on Globex. Feeder cattle open interest gained 83 contracts to come in this morning at 19,632.
Live and feeder cattle futures had a nice rally on Wednesday as a higher cash trade and short covering linked to optimism towards higher cash markets until mid December lifted values. The futures market acts and feels a whole lot better than it did coming out of last week and weekly and monthly charts could be indicating that we have put a near term bottom in the futures market as well. Much will depend on how the stock market acts, but here too, that market feels like it could rally into the end of the year as I think we could already have the end of the world priced into that market for the time being. I want to be a buyer of live and feeder cattle on breaks for the immediate near term, looking for higher cash fed cattle, cash feeder cattle, cash beef, and futures market into mid December. Look for a mixed open to live and feeder cattle futures today (i.e. $.10 higher to $.10 lower), with some support being found underneath the market on any big break. Keep in mind all livestock, grain, financial, and stock markets will close at noon today. 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.
Friday, November 28, 2008
Wednesday, November 26, 2008
November 26, 2008
Good Morning from the Chicago Board of Trade,
Cash Cattle Situation and Outlook:
The cash fed cattle market was untested yesterday with packer bids of $87 live and $1.37 dressed going unmatched against feedlot offering prices of $90-$92 live and $1.42-$1.44 dressed. All eye’s were on the futures market again yesterday to see if someone could get advantage over someone else in terms of buying or selling cattle in the cash market this week. I can tell you that couldn’t be a more fool hardy mistake to try and price cattle, whether it be on the buy side or the sell side, by what is going on in the futures market, as the futures are in complete disconnect with what is going on in the real world right now. I think both the packer and the cattle feeder realize fat cattle got a little too cheap last week, and I think both would agree that cattle will be higher this week. Perhaps not as high as the cattle feeder would like, but I think the packer realizes he needs some cattle to kill next week, and the market will be a buck or two higher from last week. This foolishness with cattle futures trading TICK for TICK with Dow and S&P futures should not have a bearing on this weeks cash cattle trade, and those trying to determine what the value of fat cattle should be this week by wringing their hands and watching what is going on in Chicago, should turn their quote screens off, and price the cattle by where the cutout is at, or by what kind of numbers they have for sale, or by what kind of meat sales they have to cover, because what is going on in the trading pit and on the screen at the CME, at least by yesterday’s standards, is by far price discovery. With that said, I think we should all look for a moderating in price declines and slight price improvement in cash fed, feeder, and slaughter cow values throughout the course of the next couple of weeks.
Cash Beef Situation and Outlook:
Yesterdays cattle kill was estimated at 128,000 head, which would be 1,000 head above last week and 3,000 head above the same day a year ago. The week-to-date kill now stands at 257,000 head, which would be 19,000 head above the same period a week ago with the industry looking for a 620,000 head production week. The boxed beef market was lower yesterday with the choice cutout closing $.94 lower to settle at $153.94 and the select cutout closing $.98 lower to settle at $144.01. Sales volume was good with 377 loads of beef sold (120.43 loads of choice fab cuts, 130.79 loads of select fab cuts, 40.41 loads of trim, 85.54 loads of grinds). The choice/select spread settled at $9.92 a gain of $.04.
The beef market was lower yesterday, as most attention from the buy side of the equation has turned to moving poultry product ahead of the Thanksgiving Day holiday. As such we saw packers discounting end meats along with loin product in order to spur some demand. The continued lack of export demand weighed on short rib values, with inside round and strip loin values reflecting reduced domestic buyer demand. Spot coarse ground items were under pressure yesterday as well, however processors looking beyond Thanksgiving Day were bidding slightly higher for cow 90’s and fed cattle 50s’. A lack of import business directly following the up coming holiday could be a cause of this. Still believe that we will come back from the holiday and see a modest up tick in beef buying interest from the retail and wholesale sector as they cover first of Dec feature adds and finish late year holiday celebration buying. Beyond that the beef market will be plagued by a modest increase in fed cattle production and waning demand after the holiday’s for beef until mid March. Some of this negativity towards the Jan/Feb beef market could be negated if a falling U.S. dollar and subsequent up tick in export demand were to develop. We also need to keep a close eye on the U.S. dollar to determine what level of beef imports we could be dealing with in the first quarter of 2009.
Futures Market Situation and Outlook:
December live cattle settled at $85.82 a loss of $.82, February live cattle settled at $87.32 a loss of $.27, and the April live cattle settled at $89.15 a loss of $.10. In the feeder cattle pit, January feeder cattle settled at $91.40, unch, March feeder cattle settled at $92.25, unch, and the April feeder cattle settled at $92.40 a loss of $.15. The reported CME feeder cattle index for 11/24/08 was $91.86 a loss of $.85.
Yesterdays live cattle volume saw 23,029 contracts trade in the pit and 10,770 contracts trade on Globex. Live cattle open interest declined 95 contracts to come in this morning at 213,883. Yesterday’s feeder cattle volume saw 1,535 contacts trade in the pit and 685 contracts trade on Globex. Feeder cattle open interest gained 361 contracts to come in this morning at 19,552.
The cattle futures market was pretty choppy and volatile again yesterday with part of the market thinking that Monday’s rally was overdone, part of the market thinking we should rally because the cash market will be higher this week, and part of the market trading cattle via the stock market. Despite all of the foolish intra-day movement, by the end of the day it did feel like there was some support under the market and we did manage to close back near our highs of the day. Given what we know about the near term fundamentals of the market (i.e. manageable fed cattle supplies and beef demand that isn’t all that bad and bound to improve after Thanksgiving), I still think we could see higher cattle futures prices going into the first couple weeks of December. I still want to target the $89-$90 area in Dec and Feb live cattle futures and the $94 area in Jan feeder cattle as near term price objectives. If by chance the cash beef and fed cattle markets were to exceed current expectations, which could easily happen as the current state of the beef market can probably support a low to mid $90’s fed cattle market, then we could see live cattle futures move $2-$4 beyond the above mentioned resistance levels. Option trading was active in the February live cattle calls yesterday with open interest going up by 3,000 contracts in out of the money strikes, which would lead one to believe there was net new buying coming into the market. Option volatility also went up the last couple of days, with at the money Dec straddle vol at 25.5%, Feb atm straddle vol at 23%, and April atm straddle vol at 21.5%. Dow and S&P futures are trading lower this morning, which will likely have an adverse affect on cattle futures on the open. I would look for a $.10-$.30 lower open to live and feeder cattle futures this morning, with some support under the market being found at yesterday’s lows. Keep in mind we will be trading on regular hours today, of course we will be closed tomorrow, however cattle and grains will open Thursday at 5:00 pm and 6:00 pm respectively on regular overnight trading schedules. All markets (meats, grains, financials, stock index’s) will close at noon on Friday. Everyone Have a Happy Thanksgiving and Trade Well!!!
Any one wanting a more detailed report on the cattle and beef markets including fundamental, chart and technical analysis, plus spec/hedge recommendations for packers, processors, producers, and meat buyers feel free to contact me by phone or e-mail to set up a free trial.
There is risk in trading futures and options.
Have a Good Day,
Troy Vetterkind
Vetterkind Cattle Brokerage, LLC
Chicago Board of Trade
141 West Jackson Blvd.
Suite 1220A
Chicago, IL 60604
1-888-299-1477 Toll Free
1-312-896-2068 Direct
1-708-224-5985 Mobile
tvetterkind@linngroup.com
Reproduction or rebroadcast of any portion of this information is strictly prohibited without the written permission of the Linn Group, Inc. the information reflected herein is derived from sources believed to be reliable; however, this information is not guaranteed as to its accuracy or completeness. Opinions expressed are subject to change without notice. This material and any view expressed herein are provided for informational purposes only and should not be construed in any way as an inducement to buy or sell commodity futures or options contracts. The Linn Group and its officers, directors, employees and affiliates may take positions for their own accounts in contracts referred to herein. Trading futures involves risk of loss. Past performance is not indicative of future results.
Good Morning from the Chicago Board of Trade,
Cash Cattle Situation and Outlook:
The cash fed cattle market was untested yesterday with packer bids of $87 live and $1.37 dressed going unmatched against feedlot offering prices of $90-$92 live and $1.42-$1.44 dressed. All eye’s were on the futures market again yesterday to see if someone could get advantage over someone else in terms of buying or selling cattle in the cash market this week. I can tell you that couldn’t be a more fool hardy mistake to try and price cattle, whether it be on the buy side or the sell side, by what is going on in the futures market, as the futures are in complete disconnect with what is going on in the real world right now. I think both the packer and the cattle feeder realize fat cattle got a little too cheap last week, and I think both would agree that cattle will be higher this week. Perhaps not as high as the cattle feeder would like, but I think the packer realizes he needs some cattle to kill next week, and the market will be a buck or two higher from last week. This foolishness with cattle futures trading TICK for TICK with Dow and S&P futures should not have a bearing on this weeks cash cattle trade, and those trying to determine what the value of fat cattle should be this week by wringing their hands and watching what is going on in Chicago, should turn their quote screens off, and price the cattle by where the cutout is at, or by what kind of numbers they have for sale, or by what kind of meat sales they have to cover, because what is going on in the trading pit and on the screen at the CME, at least by yesterday’s standards, is by far price discovery. With that said, I think we should all look for a moderating in price declines and slight price improvement in cash fed, feeder, and slaughter cow values throughout the course of the next couple of weeks.
Cash Beef Situation and Outlook:
Yesterdays cattle kill was estimated at 128,000 head, which would be 1,000 head above last week and 3,000 head above the same day a year ago. The week-to-date kill now stands at 257,000 head, which would be 19,000 head above the same period a week ago with the industry looking for a 620,000 head production week. The boxed beef market was lower yesterday with the choice cutout closing $.94 lower to settle at $153.94 and the select cutout closing $.98 lower to settle at $144.01. Sales volume was good with 377 loads of beef sold (120.43 loads of choice fab cuts, 130.79 loads of select fab cuts, 40.41 loads of trim, 85.54 loads of grinds). The choice/select spread settled at $9.92 a gain of $.04.
The beef market was lower yesterday, as most attention from the buy side of the equation has turned to moving poultry product ahead of the Thanksgiving Day holiday. As such we saw packers discounting end meats along with loin product in order to spur some demand. The continued lack of export demand weighed on short rib values, with inside round and strip loin values reflecting reduced domestic buyer demand. Spot coarse ground items were under pressure yesterday as well, however processors looking beyond Thanksgiving Day were bidding slightly higher for cow 90’s and fed cattle 50s’. A lack of import business directly following the up coming holiday could be a cause of this. Still believe that we will come back from the holiday and see a modest up tick in beef buying interest from the retail and wholesale sector as they cover first of Dec feature adds and finish late year holiday celebration buying. Beyond that the beef market will be plagued by a modest increase in fed cattle production and waning demand after the holiday’s for beef until mid March. Some of this negativity towards the Jan/Feb beef market could be negated if a falling U.S. dollar and subsequent up tick in export demand were to develop. We also need to keep a close eye on the U.S. dollar to determine what level of beef imports we could be dealing with in the first quarter of 2009.
Futures Market Situation and Outlook:
December live cattle settled at $85.82 a loss of $.82, February live cattle settled at $87.32 a loss of $.27, and the April live cattle settled at $89.15 a loss of $.10. In the feeder cattle pit, January feeder cattle settled at $91.40, unch, March feeder cattle settled at $92.25, unch, and the April feeder cattle settled at $92.40 a loss of $.15. The reported CME feeder cattle index for 11/24/08 was $91.86 a loss of $.85.
Yesterdays live cattle volume saw 23,029 contracts trade in the pit and 10,770 contracts trade on Globex. Live cattle open interest declined 95 contracts to come in this morning at 213,883. Yesterday’s feeder cattle volume saw 1,535 contacts trade in the pit and 685 contracts trade on Globex. Feeder cattle open interest gained 361 contracts to come in this morning at 19,552.
The cattle futures market was pretty choppy and volatile again yesterday with part of the market thinking that Monday’s rally was overdone, part of the market thinking we should rally because the cash market will be higher this week, and part of the market trading cattle via the stock market. Despite all of the foolish intra-day movement, by the end of the day it did feel like there was some support under the market and we did manage to close back near our highs of the day. Given what we know about the near term fundamentals of the market (i.e. manageable fed cattle supplies and beef demand that isn’t all that bad and bound to improve after Thanksgiving), I still think we could see higher cattle futures prices going into the first couple weeks of December. I still want to target the $89-$90 area in Dec and Feb live cattle futures and the $94 area in Jan feeder cattle as near term price objectives. If by chance the cash beef and fed cattle markets were to exceed current expectations, which could easily happen as the current state of the beef market can probably support a low to mid $90’s fed cattle market, then we could see live cattle futures move $2-$4 beyond the above mentioned resistance levels. Option trading was active in the February live cattle calls yesterday with open interest going up by 3,000 contracts in out of the money strikes, which would lead one to believe there was net new buying coming into the market. Option volatility also went up the last couple of days, with at the money Dec straddle vol at 25.5%, Feb atm straddle vol at 23%, and April atm straddle vol at 21.5%. Dow and S&P futures are trading lower this morning, which will likely have an adverse affect on cattle futures on the open. I would look for a $.10-$.30 lower open to live and feeder cattle futures this morning, with some support under the market being found at yesterday’s lows. Keep in mind we will be trading on regular hours today, of course we will be closed tomorrow, however cattle and grains will open Thursday at 5:00 pm and 6:00 pm respectively on regular overnight trading schedules. All markets (meats, grains, financials, stock index’s) will close at noon on Friday. Everyone Have a Happy Thanksgiving 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.
Tuesday, November 25, 2008
November 25, 2008
Good Morning from the Chicago Board of Trade,
Cash Cattle Situation and Outlook:
The cash feedlot trade was quiet yesterday as the day was spent assembling this week’s showlist. This weeks offering of fed cattle looks to be a little smaller in Nebraska and Kansas with steady numbers for sale in Texas. A look at last weeks sale volumes and prices shows Texas/OK/NM feedlots selling 37,055 head of fed cattle (48,762 previous week) for $87-$88 live. Kansas feedlots sold 27,504 head of fed cattle (23,427) for $87-$88 live and $1.39 dressed, Nebraska feedlots sold 49,079 head of fed cattle (63,173) for $88-$88.50 live and $1.39-$1.40 dressed, Colorado feedlots sold 7,045 head of fed cattle (3,361) for $87.50 live and $1.41 dressed, and Iowa/MN feedlots sold 26,394 head of fed cattle (36,318) for $86-$87 live and $1.38-$1.39 dressed. All weekly totals are negotiated cash and negotiated grid sales as reported to the USDA under MPR. As we can see weekly volumes are a little light when compared to the previous week, however there were less cattle for sale last week when compared to the previous week or year. Regardless, numbers for sale this week are certainly manageable and we shouldn’t start seeing a big build up in ready numbers of fed cattle until the last half of December. At that time we will start getting into the heavy yearling placements of cattle that came off of grass the last several months and those numbers should last until mid to late March. This increase in fed cattle marketing’s and the corresponding seasonal dip in beef demand after the holidays will likely be the catalyst for the last leg down in cash fed cattle prices until late summer 2009. This move down may or may not be exaggerated by recent weakness in Global economic conditions. For the rest of this week though, packers will be buying for a full production week next week and I am of the opinion they have forward beef sales to deliver on for the first of December, which will have them needing inventory. Last weeks cash market was overdone in my opinion so I am going to call for a steady to $1 higher fed cattle market for this week. There were no packer bids being tendered yesterday with most feedlots offering cattle at $90-$92 live and $1.43-$1.45 dressed.
A look around the auction market circuit shows fed cattle trading steady to modestly higher from last week’s steep declines. Beef fats in the Zumbrota, MN auction were bringing $82-$85 with the Holstein steers bringing $71-$73. Slaughter cows were lower with the cutter and boning utility cows bringing $35-$42 and the fatter cows bringing $43-$50. Yesterday Oklahoma City had 5,500 head of cattle on offer with early results at that sale being called $2-$4 lower, however it was said that buyer demand was picking up towards the end of the sale and prices were improving. 5 weight steers in OKC yesterday were bringing $95-$115, 6 weight steers were bringing $87-$101, 7 weight steers were bringing $86-$94, and the 8 weight steers were bringing $87-$92. I would expect to see wide price swings and large discounts on certain strings of feeder cattle depending on what the fat market does and what kind of health regimen the cattle have.
Cash Beef Situation and Outlook:
Yesterday’s cattle kill was estimated at 129,000 head, which would be 18,000 head above last week and 6,000 head above the same day a year ago. The USDA revised last Saturday’s kill up to 21,000 head, which will give us a new week-to-date total of 636,000 head. The boxed beef market was lower yesterday with the choice cutout closing $1.22 lower to settle at $154.88 and the select cutout closing $.24 lower to settle at $144.99. Sales volume was light with 181 loads of beef sold (45.26 loads of choice fab cuts, 53.96 loads of select fab cuts, 24.25 loads of trim, 57.53 loads of grinds). The choice/select spread settled at $9.89 a loss of $.98.
The beef market was lower yesterday as most in the industry turn their attention to the upcoming Thanksgiving holiday. Yesterday’s market saw most price discounts occurring within the chuck and round complex with lower values being reported on chuck rolls, knuckles, and inside/outside rounds. Short loins and tenderloin butts were also being marked lower along with select and no-roll PSMO’s. Coarse ground markets were lower yesterday, however there were a few instances of higher 90% cow beef transactions. All in all, I would expect to see a lower beef market for the balance of this week, however once we get Thanksgiving behind us, I think we could see a little appreciation in prices as buyers finish booking their end of year holiday needs and cover first of December retail adds.
Futures Market Situation and Outlook:
December live cattle settled at $86.65 a gain of $1.75, February live cattle settled at $87.60 a gain of $2.10, and the April live cattle settled at $89.25 a gain of $2.42. In the feeder cattle pit, January feeder cattle settled at $91.40 a gain of $2.00, March feeder cattle settled at $92.25 a gain of $2.10, and the April feeder cattle settled at $92.55 a gain of $2.10. The reported CME feeder cattle index for 11/21/08 was $92.71 a loss of $1.75.
Yesterdays live cattle volume saw 16,593 contracts trade in the pit and 8,371 contracts trade on Globex. Live cattle open interest declined 600 contracts to come in this morning at 214,024. Yesterday’s feeder cattle volume saw 1,940 contracts trade in the pit and 598 contracts trade on Globex. Feeder cattle open interest declined 900 contracts to come in this morning at 19,187.
Live and feeder cattle futures gapped open sharply higher yesterday and never looked back closing with triple digit gains in both pits. Higher stock and commodity markets along with a friendly cattle on feed report from Friday were catalysts for the higher trade. Overnight news shows the country of Qatar lifting a 5 year ban on U.S. beef imports and 3 of South Korea’s largest discount stores (E-mart, Homeplus, and Lottemart) will begin selling U.S. beef today after a 1 year ban due to spinal cord material being detected in a shipment of beef last year. Overnight Dow futures are up 150 points, the S & P is up 20 points, and the U.S Dollar Index is down $.86, all of which should help to support a higher open and trade in U.S. cattle futures markets. For the balance of this week, providing the Dow Jones doesn’t collapse, I think we can target the $89-$90 area for both December and February live cattle futures and the $94 area for January feeder cattle futures. Idea of a higher cash fed cattle market and the futures being extremely oversold would back up this type of trade. If the market is any good at all, we should be able to hold $84 in the Dec live, $85 in the Feb live, and $90 in the Jan feeders. Look for a $.10-$.20 higher open to live and feeder cattle futures and you could probably buy any $.25 break in the market today and risk the above mentioned support areas. Trade Well!!!
Any one wanting a more detailed report on the cattle and beef markets including fundamental, chart and technical analysis, plus spec/hedge recommendations for packers, processors, producers, and meat buyers feel free to contact me by phone or e-mail to set up a free trial.
There is risk in trading futures and options.
Have a Good Day,
Troy Vetterkind
Vetterkind Cattle Brokerage, LLC
Chicago Board of Trade
141 West Jackson Blvd.
Suite 1220A
Chicago, IL 60604
1-888-299-1477 Toll Free
1-312-896-2068 Direct
1-708-224-5985 Mobile
tvetterkind@linngroup.com
Reproduction or rebroadcast of any portion of this information is strictly prohibited without the written permission of the Linn Group, Inc. the information reflected herein is derived from sources believed to be reliable; however, this information is not guaranteed as to its accuracy or completeness. Opinions expressed are subject to change without notice. This material and any view expressed herein are provided for informational purposes only and should not be construed in any way as an inducement to buy or sell commodity futures or options contracts. The Linn Group and its officers, directors, employees and affiliates may take positions for their own accounts in contracts referred to herein. Trading futures involves risk of loss. Past performance is not indicative of future results.
Good Morning from the Chicago Board of Trade,
Cash Cattle Situation and Outlook:
The cash feedlot trade was quiet yesterday as the day was spent assembling this week’s showlist. This weeks offering of fed cattle looks to be a little smaller in Nebraska and Kansas with steady numbers for sale in Texas. A look at last weeks sale volumes and prices shows Texas/OK/NM feedlots selling 37,055 head of fed cattle (48,762 previous week) for $87-$88 live. Kansas feedlots sold 27,504 head of fed cattle (23,427) for $87-$88 live and $1.39 dressed, Nebraska feedlots sold 49,079 head of fed cattle (63,173) for $88-$88.50 live and $1.39-$1.40 dressed, Colorado feedlots sold 7,045 head of fed cattle (3,361) for $87.50 live and $1.41 dressed, and Iowa/MN feedlots sold 26,394 head of fed cattle (36,318) for $86-$87 live and $1.38-$1.39 dressed. All weekly totals are negotiated cash and negotiated grid sales as reported to the USDA under MPR. As we can see weekly volumes are a little light when compared to the previous week, however there were less cattle for sale last week when compared to the previous week or year. Regardless, numbers for sale this week are certainly manageable and we shouldn’t start seeing a big build up in ready numbers of fed cattle until the last half of December. At that time we will start getting into the heavy yearling placements of cattle that came off of grass the last several months and those numbers should last until mid to late March. This increase in fed cattle marketing’s and the corresponding seasonal dip in beef demand after the holidays will likely be the catalyst for the last leg down in cash fed cattle prices until late summer 2009. This move down may or may not be exaggerated by recent weakness in Global economic conditions. For the rest of this week though, packers will be buying for a full production week next week and I am of the opinion they have forward beef sales to deliver on for the first of December, which will have them needing inventory. Last weeks cash market was overdone in my opinion so I am going to call for a steady to $1 higher fed cattle market for this week. There were no packer bids being tendered yesterday with most feedlots offering cattle at $90-$92 live and $1.43-$1.45 dressed.
A look around the auction market circuit shows fed cattle trading steady to modestly higher from last week’s steep declines. Beef fats in the Zumbrota, MN auction were bringing $82-$85 with the Holstein steers bringing $71-$73. Slaughter cows were lower with the cutter and boning utility cows bringing $35-$42 and the fatter cows bringing $43-$50. Yesterday Oklahoma City had 5,500 head of cattle on offer with early results at that sale being called $2-$4 lower, however it was said that buyer demand was picking up towards the end of the sale and prices were improving. 5 weight steers in OKC yesterday were bringing $95-$115, 6 weight steers were bringing $87-$101, 7 weight steers were bringing $86-$94, and the 8 weight steers were bringing $87-$92. I would expect to see wide price swings and large discounts on certain strings of feeder cattle depending on what the fat market does and what kind of health regimen the cattle have.
Cash Beef Situation and Outlook:
Yesterday’s cattle kill was estimated at 129,000 head, which would be 18,000 head above last week and 6,000 head above the same day a year ago. The USDA revised last Saturday’s kill up to 21,000 head, which will give us a new week-to-date total of 636,000 head. The boxed beef market was lower yesterday with the choice cutout closing $1.22 lower to settle at $154.88 and the select cutout closing $.24 lower to settle at $144.99. Sales volume was light with 181 loads of beef sold (45.26 loads of choice fab cuts, 53.96 loads of select fab cuts, 24.25 loads of trim, 57.53 loads of grinds). The choice/select spread settled at $9.89 a loss of $.98.
The beef market was lower yesterday as most in the industry turn their attention to the upcoming Thanksgiving holiday. Yesterday’s market saw most price discounts occurring within the chuck and round complex with lower values being reported on chuck rolls, knuckles, and inside/outside rounds. Short loins and tenderloin butts were also being marked lower along with select and no-roll PSMO’s. Coarse ground markets were lower yesterday, however there were a few instances of higher 90% cow beef transactions. All in all, I would expect to see a lower beef market for the balance of this week, however once we get Thanksgiving behind us, I think we could see a little appreciation in prices as buyers finish booking their end of year holiday needs and cover first of December retail adds.
Futures Market Situation and Outlook:
December live cattle settled at $86.65 a gain of $1.75, February live cattle settled at $87.60 a gain of $2.10, and the April live cattle settled at $89.25 a gain of $2.42. In the feeder cattle pit, January feeder cattle settled at $91.40 a gain of $2.00, March feeder cattle settled at $92.25 a gain of $2.10, and the April feeder cattle settled at $92.55 a gain of $2.10. The reported CME feeder cattle index for 11/21/08 was $92.71 a loss of $1.75.
Yesterdays live cattle volume saw 16,593 contracts trade in the pit and 8,371 contracts trade on Globex. Live cattle open interest declined 600 contracts to come in this morning at 214,024. Yesterday’s feeder cattle volume saw 1,940 contracts trade in the pit and 598 contracts trade on Globex. Feeder cattle open interest declined 900 contracts to come in this morning at 19,187.
Live and feeder cattle futures gapped open sharply higher yesterday and never looked back closing with triple digit gains in both pits. Higher stock and commodity markets along with a friendly cattle on feed report from Friday were catalysts for the higher trade. Overnight news shows the country of Qatar lifting a 5 year ban on U.S. beef imports and 3 of South Korea’s largest discount stores (E-mart, Homeplus, and Lottemart) will begin selling U.S. beef today after a 1 year ban due to spinal cord material being detected in a shipment of beef last year. Overnight Dow futures are up 150 points, the S & P is up 20 points, and the U.S Dollar Index is down $.86, all of which should help to support a higher open and trade in U.S. cattle futures markets. For the balance of this week, providing the Dow Jones doesn’t collapse, I think we can target the $89-$90 area for both December and February live cattle futures and the $94 area for January feeder cattle futures. Idea of a higher cash fed cattle market and the futures being extremely oversold would back up this type of trade. If the market is any good at all, we should be able to hold $84 in the Dec live, $85 in the Feb live, and $90 in the Jan feeders. Look for a $.10-$.20 higher open to live and feeder cattle futures and you could probably buy any $.25 break in the market today and risk the above mentioned support areas. Trade Well!!!
Any one wanting a more detailed report on the cattle and beef markets including fundamental, chart and technical analysis, plus spec/hedge recommendations for packers, processors, producers, and meat buyers feel free to contact me by phone or e-mail to set up a free trial.
There is risk in trading futures and options.
Have a Good Day,
Troy Vetterkind
Vetterkind Cattle Brokerage, LLC
Chicago Board of Trade
141 West Jackson Blvd.
Suite 1220A
Chicago, IL 60604
1-888-299-1477 Toll Free
1-312-896-2068 Direct
1-708-224-5985 Mobile
tvetterkind@linngroup.com
Reproduction or rebroadcast of any portion of this information is strictly prohibited without the written permission of the Linn Group, Inc. the information reflected herein is derived from sources believed to be reliable; however, this information is not guaranteed as to its accuracy or completeness. Opinions expressed are subject to change without notice. This material and any view expressed herein are provided for informational purposes only and should not be construed in any way as an inducement to buy or sell commodity futures or options contracts. The Linn Group and its officers, directors, employees and affiliates may take positions for their own accounts in contracts referred to herein. Trading futures involves risk of loss. Past performance is not indicative of future results.
Monday, November 24, 2008
November 24, 2008
Good Morning from the Chicago Board of Trade,
Cash Cattle Situation and Outlook:
We left last week with a disappointing cash cattle market, however a friendly cattle on feed report. On feed November 1, 2008 was estimated at 10.972 mil head or 93.2% of a year ago (93.9% pre-report estimate), placements for October were estimated at 2.438 mil head or 89.5% of a year ago (91.1%), and marketing’s during October were estimated at 1.814 mil head or 96.7% of a year ago (95.1%). The report will be considered supply friendly going into the first of the year, however we will run into more yearling cattle placements from the last couple of months by January 1. It appears as though we continue to warehouse younger/smaller cattle outside of feedlots as placements of cattle weighing less than 700 lbs were down 18%, while placements of cattle weighing over 700 lbs were up 1%. These younger cattle are heading to backgrounding lots or wheat pasture and likely won’t show up as fat cattle until late summer. Last weeks cash cattle market was disappointing with the market trading $4-$6 lower at $86-$88 live and $1.37-$1.40 dressed. Feeder cattle markets were $4-$10 lower with slaughter cows off a couple of dollars as well. I believe this was a little too much and that we will see the market stabilize this week. Much will depend on how the futures market trades, but if the Dow holds together cattle futures should stabilize as well. Look for a steady to $1 higher fed cattle trade this week, with feeder cattle markets steady at best.
Cash Beef Situation and Outlook:
Last week cattle kill was estimated at 633,000 head, which would be 14,000 head above the previous week. For the week choice boxed beef gained $.42 and select boxed beef lost $.34 on moderate sales volume. Late in the week though the beef market began to soften up, with Friday showing a $1.69 loss in choice beef to settle at $156.10 and the select beef off $.92 to settle at $145.23. The beef market will likely be under pressure for most of this week as buyers focus their attention towards moving turkey ahead of the holiday on Thursday. Once we get past Thanksgiving we could see one last mini rally in the beef for the first week in December as buyers cover first of the month feature adds. Friday’s cold storage report showed beef stocks 3% above last month and 5% below last year.
Futures Market Situation and Outlook:
The futures market was under extreme pressure all last week on fund liquidation and spec selling linked to weakness in the equity markets and spec selling. We likely haven’t seen the lows in the cattle market yet, however with the market extremely oversold, a friendly cattle on feed report, and the possible stabilization in the cash markets for this week and next, as well as a higher stock market early this morning, I think we can see the futures market open a little higher and trade that way for most of this week. Much will obviously depend on how the equity markets trade this week, but I think barring any more crashes in the stock market we could see a $3-$4 bounce in live and feeder cattle by the first of December. You can take a shot at the long side of the market here for a minute and use last Thursdays lows in live and feeder cattle futures to step away from those longs. 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.
Good Morning from the Chicago Board of Trade,
Cash Cattle Situation and Outlook:
We left last week with a disappointing cash cattle market, however a friendly cattle on feed report. On feed November 1, 2008 was estimated at 10.972 mil head or 93.2% of a year ago (93.9% pre-report estimate), placements for October were estimated at 2.438 mil head or 89.5% of a year ago (91.1%), and marketing’s during October were estimated at 1.814 mil head or 96.7% of a year ago (95.1%). The report will be considered supply friendly going into the first of the year, however we will run into more yearling cattle placements from the last couple of months by January 1. It appears as though we continue to warehouse younger/smaller cattle outside of feedlots as placements of cattle weighing less than 700 lbs were down 18%, while placements of cattle weighing over 700 lbs were up 1%. These younger cattle are heading to backgrounding lots or wheat pasture and likely won’t show up as fat cattle until late summer. Last weeks cash cattle market was disappointing with the market trading $4-$6 lower at $86-$88 live and $1.37-$1.40 dressed. Feeder cattle markets were $4-$10 lower with slaughter cows off a couple of dollars as well. I believe this was a little too much and that we will see the market stabilize this week. Much will depend on how the futures market trades, but if the Dow holds together cattle futures should stabilize as well. Look for a steady to $1 higher fed cattle trade this week, with feeder cattle markets steady at best.
Cash Beef Situation and Outlook:
Last week cattle kill was estimated at 633,000 head, which would be 14,000 head above the previous week. For the week choice boxed beef gained $.42 and select boxed beef lost $.34 on moderate sales volume. Late in the week though the beef market began to soften up, with Friday showing a $1.69 loss in choice beef to settle at $156.10 and the select beef off $.92 to settle at $145.23. The beef market will likely be under pressure for most of this week as buyers focus their attention towards moving turkey ahead of the holiday on Thursday. Once we get past Thanksgiving we could see one last mini rally in the beef for the first week in December as buyers cover first of the month feature adds. Friday’s cold storage report showed beef stocks 3% above last month and 5% below last year.
Futures Market Situation and Outlook:
The futures market was under extreme pressure all last week on fund liquidation and spec selling linked to weakness in the equity markets and spec selling. We likely haven’t seen the lows in the cattle market yet, however with the market extremely oversold, a friendly cattle on feed report, and the possible stabilization in the cash markets for this week and next, as well as a higher stock market early this morning, I think we can see the futures market open a little higher and trade that way for most of this week. Much will obviously depend on how the equity markets trade this week, but I think barring any more crashes in the stock market we could see a $3-$4 bounce in live and feeder cattle by the first of December. You can take a shot at the long side of the market here for a minute and use last Thursdays lows in live and feeder cattle futures to step away from those longs. 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.
Friday, November 21, 2008
November 21, 2008
Good Morning from the Chicago Board of Trade,
Cash Cattle Situation and Outlook:
We saw further fed cattle trade develop in the northern tier of feeding country yesterday at $1.38-$1.39 dressed, which would be about a dollar lower than the bulk of transactions on Wednesday. The southern trade became active yesterday at $86-$87 live and $1.37 dressed. It looks like about 20,000 head of cattle traded that way in both Kansas and Texas. The bulk of trading is likely wrapped up for the week, with any cleanup deals likely taking place at the lower end of yesterday’s trading range. Looking into next week I would say that we could likely hold the market steady and possibly put a dollar on from this weeks $4-$6 drop. Going home for the weekend all classes of cattle selling through the auction markets (i.e. fats, feeders, cows) are all trading at sharply lower money. Here too, we could possibly see some stabilization in these cash markets as we probably took to much money off this week.
Cash Beef Situation and Outlook:
Yesterdays kill was estimated at 128,000 head, which would be 3,000 head above last week and 128,000 head above the same day last year. The week-to-date kill now stands at 491,000 head, which would be 22,000 head above the same period last week with the industry looking for a 625,000 head production week. The boxed beef market was lower yesterday with the choice cutout closing $.43 lower to settle at $157.79 and the select cutout closing $1.72 lower to settle at $146.15. Sales volume was light with 252 loads of beef sold (65.87 loads of choice fab cuts, 57.28 loads of select fab cuts, 65.61 loads of trim, 63.48 loads of grinds). The choice/select spread settled at $11.65 a gain of $1.29.
The beef market began to soften up yesterday as most on the buy side of the market were content with their beef inventory positions ahead of the Thanksgiving holiday and were moving to the sidelines focusing their attention to moving turkey product. There were a few higher transactions taking place on ribeyes and PSMO’s yesterday, but for the most part the balance of the carcass primals were trading steady to lower. Boneless beef markets were also trading lower yesterday and this will likely be the case going into next week. Look for a lower beef trade until we get Thanksgiving behind us.
Futures Market Situation and Outlook:
December live cattle settled at $85.80 a gain of $1.60, February live cattle settled at $86.52 a gain of $1.37, and the April live cattle settled at $87.45 a gain of $.90. In the feeder cattle pit, January feeder cattle settled at $89.75 a loss of $.10, March feeder cattle settled at $90.35 a gain of $.25, and the April feeder cattle settled at $90.50 a gain of $.30. The reported CME feeder cattle index for 11/19/08 was $95.51 a loss of $1.27.
Yesterdays live cattle volume saw 31,027 contracts trade in the pit and 14,395 contracts trade on Globex. Live cattle open interest gained 274 contracts to come in this morning at 215,928. Yesterday’s feeder cattle volume saw 3,255 contracts trade in the pit and 1,565 contracts trade on Globex. Feeder cattle open interest declined 108 contracts to come in this morning at 19,826.
It was another very choppy and volatile trade in CME cattle futures market as the market continues to be led around by the gyrations in the equity markets. Once again I will say that perhaps we have seen enough down in the market for the very short term simply because the futures market is extremely oversold and we have sold this weeks cash cattle at sharply lower price levels. Also we will have a friendly cattle on feed report out tonight with the market looking for 93.9% on feed Nov 1, 91.1% placements during the month of October, and 95.1% marketed during the month of October. This along with ideas of possibly holding the cash market steady next week with an outside chance of putting a dollar back on the market should help to support a mini short covering rally going into next week. Keep in mind though, market participants will be looking at any rally as a selling and hedging opportunity. Look for a $.10-$.20 higher open to live and feeder cattle futures this morning. Trade Well!!!
Any one wanting a more detailed report on the cattle and beef markets including fundamental, chart and technical analysis, plus spec/hedge recommendations for packers, processors, producers, and meat buyers feel free to contact me by phone or e-mail to set up a free trial.
There is risk in trading futures and options.
Have a Good Day,
Troy Vetterkind
Vetterkind Cattle Brokerage, LLC
Chicago Board of Trade
141 West Jackson Blvd.
Suite 1220A
Chicago, IL 60604
1-888-299-1477 Toll Free
1-312-896-2068 Direct
1-708-224-5985 Mobile
tvetterkind@linngroup.com
Reproduction or rebroadcast of any portion of this information is strictly prohibited without the written permission of the Linn Group, Inc. the information reflected herein is derived from sources believed to be reliable; however, this information is not guaranteed as to its accuracy or completeness. Opinions expressed are subject to change without notice. This material and any view expressed herein are provided for informational purposes only and should not be construed in any way as an inducement to buy or sell commodity futures or options contracts. The Linn Group and its officers, directors, employees and affiliates may take positions for their own accounts in contracts referred to herein. Trading futures involves risk of loss. Past performance is not indicative of future results.
Good Morning from the Chicago Board of Trade,
Cash Cattle Situation and Outlook:
We saw further fed cattle trade develop in the northern tier of feeding country yesterday at $1.38-$1.39 dressed, which would be about a dollar lower than the bulk of transactions on Wednesday. The southern trade became active yesterday at $86-$87 live and $1.37 dressed. It looks like about 20,000 head of cattle traded that way in both Kansas and Texas. The bulk of trading is likely wrapped up for the week, with any cleanup deals likely taking place at the lower end of yesterday’s trading range. Looking into next week I would say that we could likely hold the market steady and possibly put a dollar on from this weeks $4-$6 drop. Going home for the weekend all classes of cattle selling through the auction markets (i.e. fats, feeders, cows) are all trading at sharply lower money. Here too, we could possibly see some stabilization in these cash markets as we probably took to much money off this week.
Cash Beef Situation and Outlook:
Yesterdays kill was estimated at 128,000 head, which would be 3,000 head above last week and 128,000 head above the same day last year. The week-to-date kill now stands at 491,000 head, which would be 22,000 head above the same period last week with the industry looking for a 625,000 head production week. The boxed beef market was lower yesterday with the choice cutout closing $.43 lower to settle at $157.79 and the select cutout closing $1.72 lower to settle at $146.15. Sales volume was light with 252 loads of beef sold (65.87 loads of choice fab cuts, 57.28 loads of select fab cuts, 65.61 loads of trim, 63.48 loads of grinds). The choice/select spread settled at $11.65 a gain of $1.29.
The beef market began to soften up yesterday as most on the buy side of the market were content with their beef inventory positions ahead of the Thanksgiving holiday and were moving to the sidelines focusing their attention to moving turkey product. There were a few higher transactions taking place on ribeyes and PSMO’s yesterday, but for the most part the balance of the carcass primals were trading steady to lower. Boneless beef markets were also trading lower yesterday and this will likely be the case going into next week. Look for a lower beef trade until we get Thanksgiving behind us.
Futures Market Situation and Outlook:
December live cattle settled at $85.80 a gain of $1.60, February live cattle settled at $86.52 a gain of $1.37, and the April live cattle settled at $87.45 a gain of $.90. In the feeder cattle pit, January feeder cattle settled at $89.75 a loss of $.10, March feeder cattle settled at $90.35 a gain of $.25, and the April feeder cattle settled at $90.50 a gain of $.30. The reported CME feeder cattle index for 11/19/08 was $95.51 a loss of $1.27.
Yesterdays live cattle volume saw 31,027 contracts trade in the pit and 14,395 contracts trade on Globex. Live cattle open interest gained 274 contracts to come in this morning at 215,928. Yesterday’s feeder cattle volume saw 3,255 contracts trade in the pit and 1,565 contracts trade on Globex. Feeder cattle open interest declined 108 contracts to come in this morning at 19,826.
It was another very choppy and volatile trade in CME cattle futures market as the market continues to be led around by the gyrations in the equity markets. Once again I will say that perhaps we have seen enough down in the market for the very short term simply because the futures market is extremely oversold and we have sold this weeks cash cattle at sharply lower price levels. Also we will have a friendly cattle on feed report out tonight with the market looking for 93.9% on feed Nov 1, 91.1% placements during the month of October, and 95.1% marketed during the month of October. This along with ideas of possibly holding the cash market steady next week with an outside chance of putting a dollar back on the market should help to support a mini short covering rally going into next week. Keep in mind though, market participants will be looking at any rally as a selling and hedging opportunity. 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.
Thursday, November 20, 2008
November 20, 2008
Good Morning from the Chicago Board of Trade,
Cash Cattle Situation and Outlook:
We saw a moderately active fed cattle trade develop in Nebraska and Colorado yesterday with prices running $3-$5 lower at $87-$88 live and $1.39-$1.40 dressed. A light trade was being reported in Texas/OK/NM at $88-$88.50 live, which would be about $5 lower from the bulk of last weeks trade. Numbers of cattle sold looks to be about 20,000 head in the north and a couple of thousand head in the south. Kansas feedlots have not sold many cattle yet but I would expect to see some trade develop down there today at $88 money. Coming into the end of the week we also see markets for feeder cattle trading sharply lower as well as slaughter cows, and I would expect to see further weakness in all classes of cattle markets early next week.
Cash Beef Situation and Outlook:
Yesterday’s cattle kill was estimated at 125,000 head, which would be 12,000 head above last week and 6,000 head below the same day a year ago. The week-to-date kill now stands at 363,000 head, which would be 19,000 head below last weeks pace with the industry looking for a 625,000 head production week. The boxed beef market was higher yesterday as we see the choice cutout closing $.73 higher to settle at $158.22 and the select cutout closing $.35 higher to settle at $147.87. Sales volume was light with 250 loads of beef sold (78.52 loads of choice fab cuts, 76.77 loads of select fab cuts, 10.94 loads of trim, 84.22 loads of grinds). The choice/select spread settled at $10.35 a gain of $.38.
The beef market was higher yesterday on continued buying of rib and round meat by the retail sector. Chuck meat was still being marked lower as a lack of export demand keeps more product on the domestic market. Loin meat was rated as mostly steady yesterday. Boneless cow beef and fed cattle trim were trading at lower price levels as well yesterday. I would continue to look for the boxed beef market to begin to move sideways to lower going into early next week as retail and wholesale buyers turn their attention to moving turkey product ahead of the Thanksgiving holiday. Beef exports for the week of November 7-13, 2008 are as follows:
Beef: Net sales of 4,200 MT were primarily for Canada (1,400 MT), Mexico (1,400 MT), South Korea (500 MT), and Japan (400 MT). Net Sales of 500 MT for delivery in 2009 were primarily for Japan (200 MT) and Taiwan (200 MT). Exports of 8,300 MT were mainly to Mexico (3,200 MT), Canada (1,600 MT), South Korea (1,500 MT), Japan (900 MT), Vietnam (300 MT), and Taiwan (300 MT).
Futures Market Situation and Outlook:
December live cattle settled at $84.20 a loss of $2.95, February live cattle settled at $85.15 a loss of $2.45, and the April live cattle settled at $86.55 a loss of $2.52. In the feeder cattle pit, November feeder cattle settled at $95.57 a loss of $.17, January feeder cattle settled at $89.85 a loss of $1.40, and the March feeder cattle settled at $90.10 a loss of $2.00. The reported CME feeder cattle index for 11/18/08 was $96.78 a loss of $.48.
Yesterday’s live cattle volume saw 29,540 contracts trade in the pit and 13,331 contracts trade on Globex. Live cattle open interest declined 705 contracts to come in this morning at 215,731. Yesterday’s feeder cattle volume saw 3,505 contracts trade in the pit and 1,362 contracts trade on Globex. Feeder cattle open interest declined 32 contracts to come in this morning at 19,960.
Live and feeder cattle futures settled on new 4 year lows yesterday as the market continues to unwind and follows equity markets lower. There were also some rumors being floated about a possible BSE cow in Arizona that gave another excuse to sell the market. I thought we could possibly see some sort of short covering rally, but that’s not going to happen with the stock market shedding 500 points a day. Next stop for live cattle futures would likely be psychological support at $80, and below that we could see a move down to May 2006 lows of $73. Holding January feeder cattle under $90 keeps the market poised to make a move down to $80. Keep in mind November feeder cattle futures will go off the board today and January will take over as lead contract month. Dow and S & P futures look sharply lower again this morning and this will continue to drag cattle futures lower as well. Look for a $.20-$.40 lower open to live cattle and $.50-$1.00 lower in feeder cattle this morning. Trade Well!!!
Any one wanting a more detailed report on the cattle and beef markets including fundamental, chart and technical analysis, plus spec/hedge recommendations for packers, processors, producers, and meat buyers feel free to contact me by phone or e-mail to set up a free trial.
There is risk in trading futures and options.
Have a Good Day,
Troy Vetterkind
Vetterkind Cattle Brokerage, LLC
Chicago Board of Trade
141 West Jackson Blvd.
Suite 1220A
Chicago, IL 60604
1-888-299-1477 Toll Free
1-312-896-2068 Direct
1-708-224-5985 Mobile
tvetterkind@linngroup.com
Reproduction or rebroadcast of any portion of this information is strictly prohibited without the written permission of the Linn Group, Inc. the information reflected herein is derived from sources believed to be reliable; however, this information is not guaranteed as to its accuracy or completeness. Opinions expressed are subject to change without notice. This material and any view expressed herein are provided for informational purposes only and should not be construed in any way as an inducement to buy or sell commodity futures or options contracts. The Linn Group and its officers, directors, employees and affiliates may take positions for their own accounts in contracts referred to herein. Trading futures involves risk of loss. Past performance is not indicative of future results.
Good Morning from the Chicago Board of Trade,
Cash Cattle Situation and Outlook:
We saw a moderately active fed cattle trade develop in Nebraska and Colorado yesterday with prices running $3-$5 lower at $87-$88 live and $1.39-$1.40 dressed. A light trade was being reported in Texas/OK/NM at $88-$88.50 live, which would be about $5 lower from the bulk of last weeks trade. Numbers of cattle sold looks to be about 20,000 head in the north and a couple of thousand head in the south. Kansas feedlots have not sold many cattle yet but I would expect to see some trade develop down there today at $88 money. Coming into the end of the week we also see markets for feeder cattle trading sharply lower as well as slaughter cows, and I would expect to see further weakness in all classes of cattle markets early next week.
Cash Beef Situation and Outlook:
Yesterday’s cattle kill was estimated at 125,000 head, which would be 12,000 head above last week and 6,000 head below the same day a year ago. The week-to-date kill now stands at 363,000 head, which would be 19,000 head below last weeks pace with the industry looking for a 625,000 head production week. The boxed beef market was higher yesterday as we see the choice cutout closing $.73 higher to settle at $158.22 and the select cutout closing $.35 higher to settle at $147.87. Sales volume was light with 250 loads of beef sold (78.52 loads of choice fab cuts, 76.77 loads of select fab cuts, 10.94 loads of trim, 84.22 loads of grinds). The choice/select spread settled at $10.35 a gain of $.38.
The beef market was higher yesterday on continued buying of rib and round meat by the retail sector. Chuck meat was still being marked lower as a lack of export demand keeps more product on the domestic market. Loin meat was rated as mostly steady yesterday. Boneless cow beef and fed cattle trim were trading at lower price levels as well yesterday. I would continue to look for the boxed beef market to begin to move sideways to lower going into early next week as retail and wholesale buyers turn their attention to moving turkey product ahead of the Thanksgiving holiday. Beef exports for the week of November 7-13, 2008 are as follows:
Beef: Net sales of 4,200 MT were primarily for Canada (1,400 MT), Mexico (1,400 MT), South Korea (500 MT), and Japan (400 MT). Net Sales of 500 MT for delivery in 2009 were primarily for Japan (200 MT) and Taiwan (200 MT). Exports of 8,300 MT were mainly to Mexico (3,200 MT), Canada (1,600 MT), South Korea (1,500 MT), Japan (900 MT), Vietnam (300 MT), and Taiwan (300 MT).
Futures Market Situation and Outlook:
December live cattle settled at $84.20 a loss of $2.95, February live cattle settled at $85.15 a loss of $2.45, and the April live cattle settled at $86.55 a loss of $2.52. In the feeder cattle pit, November feeder cattle settled at $95.57 a loss of $.17, January feeder cattle settled at $89.85 a loss of $1.40, and the March feeder cattle settled at $90.10 a loss of $2.00. The reported CME feeder cattle index for 11/18/08 was $96.78 a loss of $.48.
Yesterday’s live cattle volume saw 29,540 contracts trade in the pit and 13,331 contracts trade on Globex. Live cattle open interest declined 705 contracts to come in this morning at 215,731. Yesterday’s feeder cattle volume saw 3,505 contracts trade in the pit and 1,362 contracts trade on Globex. Feeder cattle open interest declined 32 contracts to come in this morning at 19,960.
Live and feeder cattle futures settled on new 4 year lows yesterday as the market continues to unwind and follows equity markets lower. There were also some rumors being floated about a possible BSE cow in Arizona that gave another excuse to sell the market. I thought we could possibly see some sort of short covering rally, but that’s not going to happen with the stock market shedding 500 points a day. Next stop for live cattle futures would likely be psychological support at $80, and below that we could see a move down to May 2006 lows of $73. Holding January feeder cattle under $90 keeps the market poised to make a move down to $80. Keep in mind November feeder cattle futures will go off the board today and January will take over as lead contract month. Dow and S & P futures look sharply lower again this morning and this will continue to drag cattle futures lower as well. Look for a $.20-$.40 lower open to live cattle and $.50-$1.00 lower in feeder cattle this morning. Trade Well!!!
Any one wanting a more detailed report on the cattle and beef markets including fundamental, chart and technical analysis, plus spec/hedge recommendations for packers, processors, producers, and meat buyers feel free to contact me by phone or e-mail to set up a free trial.
There is risk in trading futures and options.
Have a Good Day,
Troy Vetterkind
Vetterkind Cattle Brokerage, LLC
Chicago Board of Trade
141 West Jackson Blvd.
Suite 1220A
Chicago, IL 60604
1-888-299-1477 Toll Free
1-312-896-2068 Direct
1-708-224-5985 Mobile
tvetterkind@linngroup.com
Reproduction or rebroadcast of any portion of this information is strictly prohibited without the written permission of the Linn Group, Inc. the information reflected herein is derived from sources believed to be reliable; however, this information is not guaranteed as to its accuracy or completeness. Opinions expressed are subject to change without notice. This material and any view expressed herein are provided for informational purposes only and should not be construed in any way as an inducement to buy or sell commodity futures or options contracts. The Linn Group and its officers, directors, employees and affiliates may take positions for their own accounts in contracts referred to herein. Trading futures involves risk of loss. Past performance is not indicative of future results.
Wednesday, November 19, 2008
November 19, 2008
Good Morning from the Chicago Board of Trade,
Cash Cattle Situation and Outlook:
The cash feedlot trade was largely untested with just a few cattle reportedly trading in the Nebraska dressed market for $1.40 dressed. The cattle were supposedly of Canadian origin and hedged. The rest of cattle feeding country was quiet with no real packer bids being tendered and feedlots offering this week’s mostly smaller showlist offering at $94-$95 live and $1.46 plus dressed. A late week trade is expected to develop at lower money (i.e. $93 in the south and $1.40-$1.42 in the north) due to imploding futures values and packers buying cattle for a short production week next week. As we enter the mid point of the week, most all classes of cattle selling in the auction markets are bringing lower money from fats to feeders to slaughter cows. Look for more of the same going into the weekend and early next week.
Cash Beef Situation and Outlook:
Yesterdays kill was estimated at 127,000 head, which would be 6,000 head above last week and 4,000 head below the same day a year ago. The week-to-date kill now stands at 238,000 head, which would be 7,000 head below the same period a week ago. The boxed beef market was higher with the choice cutout closing $.10 higher to settle at $157.49 and the select cutout was $.79 higher to settle at $147.52. Sales volume was light with 200 loads of beef sold (73.87 loads of choice fab cuts, 71.93 loads of select fab cuts, 16.53 loads of trim, 37.75 loads of grinds). The choice/select spread settled at $9.97 a loss of $.69.
The beef market was marginally higher yesterday, however private sources indicate a softer tone beginning to develop on many chuck, round, and loin items. Yesterday saw some price reductions for quick ship of clods, chuck rolls, inside rounds, and boneless strips. Boneless beef markets were lower yesterday with current production out weighing near term demand. I will continue to call for a lower beef market going into next week.
Futures Market Situation and Outlook:
December live cattle settled at $87.15 a loss of $1.15, February live cattle settled at $87.60 a loss of $1.42, and the April live cattle settled at $89.07 a loss of $1.30. In the feeder cattle pit, November feeder cattle settled at $95.75 a loss of $.27, January feeder cattle settled at $91.25 a loss of $2.65, and the March feeder cattle settled at $92.10 a loss of $2.20. The reported CME feeder cattle index for 11/17/08 was $97.26 a loss of $.40.
Yesterdays live cattle volume saw 29,932 contracts trade in the pit and 12,712 contracts trade on Globex. Live cattle open interest gained 799 contracts to come in this morning at 216,423. Yesterdays’ feeder cattle volume saw 2,918 contracts trade in the pit and 890 contracts trade on Globex. Feeder cattle open interest gained 208 contracts to come in this morning at 19,976.
Live and feeder cattle settled yesterday with sharp declines, following the equity markets lower. In the case of feeder cattle we scored new contract lows in every trading month except November, as that contract will expire tomorrow. February live cattle also made a new contract low yesterday. Another late rally in the stock market did manage to pull live cattle contracts $.50 off their lows on the Globex platform after the pit close yesterday, and so far this morning cattle futures are trading $.10-$.30 higher with the Dow and S & P futures trading 135 and 13 lower respectively. We could possibly see a short covering rally in live and feeder cattle futures today as they have been pummeled lower since last Friday. However, the longer term view of the market looks lower and everyone will be looking for rallies to sell. December and February live cattle will remain in a bearish posture holding under $90, as will January feeder cattle below $95. We will need to see some closes back above these strong resistance levels now to negate some of the recent bearishness. Look for a $.10-$.20 higher open to live and feeder cattle futures this morning. Trade Well!!!
Any one wanting a more detailed report on the cattle and beef markets including fundamental, chart and technical analysis, plus spec/hedge recommendations for packers, processors, producers, and meat buyers feel free to contact me by phone or e-mail to set up a free trial.
There is risk in trading futures and options.
Have a Good Day,
Troy Vetterkind
Vetterkind Cattle Brokerage, LLC
Chicago Board of Trade
141 West Jackson Blvd.
Suite 1220A
Chicago, IL 60604
1-888-299-1477 Toll Free
1-312-896-2068 Direct
1-708-224-5985 Mobile
tvetterkind@linngroup.com
Reproduction or rebroadcast of any portion of this information is strictly prohibited without the written permission of the Linn Group, Inc. the information reflected herein is derived from sources believed to be reliable; however, this information is not guaranteed as to its accuracy or completeness. Opinions expressed are subject to change without notice. This material and any view expressed herein are provided for informational purposes only and should not be construed in any way as an inducement to buy or sell commodity futures or options contracts. The Linn Group and its officers, directors, employees and affiliates may take positions for their own accounts in contracts referred to herein. Trading futures involves risk of loss. Past performance is not indicative of future results.
Good Morning from the Chicago Board of Trade,
Cash Cattle Situation and Outlook:
The cash feedlot trade was largely untested with just a few cattle reportedly trading in the Nebraska dressed market for $1.40 dressed. The cattle were supposedly of Canadian origin and hedged. The rest of cattle feeding country was quiet with no real packer bids being tendered and feedlots offering this week’s mostly smaller showlist offering at $94-$95 live and $1.46 plus dressed. A late week trade is expected to develop at lower money (i.e. $93 in the south and $1.40-$1.42 in the north) due to imploding futures values and packers buying cattle for a short production week next week. As we enter the mid point of the week, most all classes of cattle selling in the auction markets are bringing lower money from fats to feeders to slaughter cows. Look for more of the same going into the weekend and early next week.
Cash Beef Situation and Outlook:
Yesterdays kill was estimated at 127,000 head, which would be 6,000 head above last week and 4,000 head below the same day a year ago. The week-to-date kill now stands at 238,000 head, which would be 7,000 head below the same period a week ago. The boxed beef market was higher with the choice cutout closing $.10 higher to settle at $157.49 and the select cutout was $.79 higher to settle at $147.52. Sales volume was light with 200 loads of beef sold (73.87 loads of choice fab cuts, 71.93 loads of select fab cuts, 16.53 loads of trim, 37.75 loads of grinds). The choice/select spread settled at $9.97 a loss of $.69.
The beef market was marginally higher yesterday, however private sources indicate a softer tone beginning to develop on many chuck, round, and loin items. Yesterday saw some price reductions for quick ship of clods, chuck rolls, inside rounds, and boneless strips. Boneless beef markets were lower yesterday with current production out weighing near term demand. I will continue to call for a lower beef market going into next week.
Futures Market Situation and Outlook:
December live cattle settled at $87.15 a loss of $1.15, February live cattle settled at $87.60 a loss of $1.42, and the April live cattle settled at $89.07 a loss of $1.30. In the feeder cattle pit, November feeder cattle settled at $95.75 a loss of $.27, January feeder cattle settled at $91.25 a loss of $2.65, and the March feeder cattle settled at $92.10 a loss of $2.20. The reported CME feeder cattle index for 11/17/08 was $97.26 a loss of $.40.
Yesterdays live cattle volume saw 29,932 contracts trade in the pit and 12,712 contracts trade on Globex. Live cattle open interest gained 799 contracts to come in this morning at 216,423. Yesterdays’ feeder cattle volume saw 2,918 contracts trade in the pit and 890 contracts trade on Globex. Feeder cattle open interest gained 208 contracts to come in this morning at 19,976.
Live and feeder cattle settled yesterday with sharp declines, following the equity markets lower. In the case of feeder cattle we scored new contract lows in every trading month except November, as that contract will expire tomorrow. February live cattle also made a new contract low yesterday. Another late rally in the stock market did manage to pull live cattle contracts $.50 off their lows on the Globex platform after the pit close yesterday, and so far this morning cattle futures are trading $.10-$.30 higher with the Dow and S & P futures trading 135 and 13 lower respectively. We could possibly see a short covering rally in live and feeder cattle futures today as they have been pummeled lower since last Friday. However, the longer term view of the market looks lower and everyone will be looking for rallies to sell. December and February live cattle will remain in a bearish posture holding under $90, as will January feeder cattle below $95. We will need to see some closes back above these strong resistance levels now to negate some of the recent bearishness. 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.
Monday, November 17, 2008
November 17, 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 steady to $1 lower at $90-$92 live and $1.43-$1.44 dressed in the north and $93 live and $1.48 dressed in the south. Most of the northern trade developed earlier in the week with what looks to be decent movement of 52,000 head of cattle sold in Nebraska and 34,000 head in Iowa. Most of the southern trade took place on Friday with preliminary reports from the USDA showing 14,000 head of cattle sold in Kansas, 23,000 head of cattle sold in Texas, and 3,000 head of cattle sold in Colorado. I will report on actual trade volumes and prices tomorrow morning once everything is counted and reported to the USDA today. Week long selling in CME cattle futures contracts linked to volatile trade in U.S. equity markets and a weakening boxed beef market late in the week prompted cattle feeders to accept steady to lower money for their fed cattle as opposed to steady/higher, which was thought earlier in the week. Many packers late in the week were applying supply side economics in order to preserve margins late in the week by reducing slaughter schedules, which had some less aggressive in the market for cattle last week. More of the same is in store for early this week, as IBP will have at least one plant dark today. While beef demand and movement has been pretty good the last couple of weeks, some of that buying could begin to dry up as retail and wholesale buyers have covered a good portion of their needs going into the end of the year, and this has packers concerned on how they will move beef product post Thanksgiving, which has them buying cattle accordingly. They will be buying for a short kill week next week as well, which one has to assume will keep them looking to procure live inventory at lower money again this week. I would look for a softer tone to the cash fed cattle market this week, with prices ranging steady to lower compared to last week at $92-$93 live and $1.46-$1.48 dressed in the south and $89-$91 live and $1.42-$1.44 dressed in the north. After starting the week on a stronger market, most feeder cattle and calf sales were beginning to soften up late in the week on the break in the futures board and lower fat cattle market. By the end of the week most classes of feeder cattle were trading steady to $1-$3 lower, however demand was said to be good from Midwest backgrounders and southern plains grazers. Numbers of cattle for sale last week in the western sale barns increased as producers finally begin to move their new crop calves to market due to weather disruptions the last couple of weeks. I would have to say that a lower trend to the feeder cattle market will prevail for most of this week as well following the direction of the futures and cash fed cattle market. Slaughter cows and bulls were mostly $1-$3 lower last week, as here too an increase in sale barn receipts and a lower trend to the domestic boneless beef market had cow killers buying live inventory defensively. Expect to see more of the same in that venue this week as well.
Cash Beef Situation and Outlook:
Last weeks cattle slaughter was estimated at 616,000 head, which would be 5,000 head below last week and 31,000 head below the same period a year ago. The weekly slaughter produced an estimated 482.8-mil lbs of beef. Year-to-date production figures show the kill running .2% above a year ago at 29.962 mil head and ytd beef production running .5% above a year ago at 23.197 bil lbs. From Thursday to Thursday of last week choice boxed beef gained $8.34 and select-boxed beef gained $5.15. Sales volume was lighter on the increased market with 1,113 loads of choice/select-fabricated cuts of beef sold throughout the week. Friday saw a lower beef market with the choice cutout closing $.35 lower to settle at $157.02 and the select cutout closing $.31 lower to settle at $146.18. Sales volume on Friday was light with 196 loads of beef sold (75.84 loads of choice fab cuts, 51.23 loads of select fab cuts, 21.80 loads of trim, 46.81 loads of grinds). The choice/select spread settled at $10.84 a loss of $.04 for the day, however a gain of $3.09 for the week.
The beef market was higher for most of the week last week, however the market was being met with some buyer resistance late in the week as many were getting their both their near term and forward needs into the end of the year covered. Once again the charge higher was led by active procurement of late year holiday cuts of beef as we see choice boneless ribeyes gaining $.60 in value and choice peeled tenders gaining $1.00 in value throughout the course of the week. This pushed rib and loin primal values 16% and 5% higher by the end of the trading week. There was some active interest in round items early in the week as retail interests covered up coming features for the first of December. A lack of export business kept more chuck product on the domestic market and as a result values drifted lower. Boneless beef items were mostly steady on the 50% fed cattle trim due to lighter fat cattle slaughters, but mostly lower on the boneless cow 90’s due to increased cow kills and competition from lower priced imports. By Friday of last week, many buyers were content with current inventory positions and were beginning to back away from the market waiting for opportunities to present themselves. Turkey items will now occupy most retail and wholesale attention for the next couple of weeks and I would expect to see beef values drift lower as a result of this. We may have one more beef buying spurt going into the first of December, however this will likely be short lived. Look for cutout values to drift lower from current price levels.
Futures Market Situation and Outlook:
For the week, December live cattle lost $2.75 to settle at $90.05, February live cattle lost $2.87 to settle at $90.67, and the April live cattle lost $2.85 to settle at $2.85. In the feeder cattle pit, November feeder cattle lost $2.25 to settle at $96.70, January feeder cattle lost $3.95 to settle at $95.27, and the March feeder cattle lost $3.75 to settle at $95.92. The reported CME feeder cattle index for 11/13/08 was $97.60 a gain of $.18 for the day and a gain of $1.15 for the week.
Friday’s live cattle volume saw 21,585 contracts trade in the pit and 11,347 contracts trade on Globex. Live cattle open interest gained 2,915 to come in this morning at 216,503. Friday’s feeder cattle volume saw 1,903 contracts trade in the pit and 703 contracts trade on Globex. Feeder cattle open interest gained 233 contracts to come in this morning at 19,149. For the week, live cattle open interest gained 329 contracts and feeder cattle open interest 140 contracts.
The latest commitment of traders report showed the small funds net short 5,090 contracts of live cattle futures and options a decline of 934 contracts from the previous week. The commercials were net short 72,909 contracts of F/O a gain of 444 contracts, the index funds were net long 105,891 contracts of live cattle F/O a decline of 1,144 contracts, and the small spec’s were net short 27,892 contracts of live cattle F/O a decline of 654 contracts. In the feeder cattle, small funds were net short 2,375 contracts of F/O a decline of 429 contracts, commercials were net long 1,175 contracts of F/O a decline of 875, index funds were net long 6,120 contracts of F/O a gain of 526, and the small spec’s were net short 4,920 contracts of F/O a gain of 80.
The live and feeder cattle futures markets were under pressure for most of last week on continued economic concerns and ideas beef and cattle markets were likely topping out for the near term. Live cattle lost close to $3 by the end of the week and feeders lost $4 because of this and took out many areas of near term chart support. December live cattle did manage to hold $90 by Friday and January feeder cattle did close above $95, however I would suspect we are down below these levels by early this week. Dow and S & P futures seem poised to make new lows by the first of the year and this will inevitably drag cattle futures down with them. Most traders will be expecting to see lower cash cattle and beef markets this week, which will keep a sell mentality in the cattle pits. First support on Dec live cattle will be found right here at $90, below that will be old contract lows of $87. Weekly resistance in December live cattle starts at $92 and goes up to $92.50. Jan feeders will have support at $95 early this week and below that $92-$93 seems likely. Resistance in Jan feeders will be found on rally attempts at $97.50 up to $98. Option trading was pretty quiet on Friday with volatilities increasing slightly. Look for a $.10-$.20 lower open to live and feeder cattle futures trading this morning. Trade Well!!!
Any one wanting a more detailed report on the cattle and beef markets including fundamental, chart and technical analysis, plus spec/hedge recommendations for packers, processors, producers, and meat buyers feel free to contact me by phone or e-mail to set up a free trial.
There is risk in trading futures and options.
Have a Good Day,
Troy Vetterkind
Vetterkind Cattle Brokerage, LLC
Chicago Board of Trade
141 West Jackson Blvd.
Suite 1220A
Chicago, IL 60604
1-888-299-1477 Toll Free
1-312-896-2068 Direct
1-708-224-5985 Mobile
tvetterkind@linngroup.com
Reproduction or rebroadcast of any portion of this information is strictly prohibited without the written permission of the Linn Group, Inc. the information reflected herein is derived from sources believed to be reliable; however, this information is not guaranteed as to its accuracy or completeness. Opinions expressed are subject to change without notice. This material and any view expressed herein are provided for informational purposes only and should not be construed in any way as an inducement to buy or sell commodity futures or options contracts. The Linn Group and its officers, directors, employees and affiliates may take positions for their own accounts in contracts referred to herein. Trading futures involves risk of loss. Past performance is not indicative of future results.
Good Morning from the Chicago Board of Trade,
Cash Cattle Situation and Outlook:
We left last week with a fed cattle market that trades mostly steady to $1 lower at $90-$92 live and $1.43-$1.44 dressed in the north and $93 live and $1.48 dressed in the south. Most of the northern trade developed earlier in the week with what looks to be decent movement of 52,000 head of cattle sold in Nebraska and 34,000 head in Iowa. Most of the southern trade took place on Friday with preliminary reports from the USDA showing 14,000 head of cattle sold in Kansas, 23,000 head of cattle sold in Texas, and 3,000 head of cattle sold in Colorado. I will report on actual trade volumes and prices tomorrow morning once everything is counted and reported to the USDA today. Week long selling in CME cattle futures contracts linked to volatile trade in U.S. equity markets and a weakening boxed beef market late in the week prompted cattle feeders to accept steady to lower money for their fed cattle as opposed to steady/higher, which was thought earlier in the week. Many packers late in the week were applying supply side economics in order to preserve margins late in the week by reducing slaughter schedules, which had some less aggressive in the market for cattle last week. More of the same is in store for early this week, as IBP will have at least one plant dark today. While beef demand and movement has been pretty good the last couple of weeks, some of that buying could begin to dry up as retail and wholesale buyers have covered a good portion of their needs going into the end of the year, and this has packers concerned on how they will move beef product post Thanksgiving, which has them buying cattle accordingly. They will be buying for a short kill week next week as well, which one has to assume will keep them looking to procure live inventory at lower money again this week. I would look for a softer tone to the cash fed cattle market this week, with prices ranging steady to lower compared to last week at $92-$93 live and $1.46-$1.48 dressed in the south and $89-$91 live and $1.42-$1.44 dressed in the north. After starting the week on a stronger market, most feeder cattle and calf sales were beginning to soften up late in the week on the break in the futures board and lower fat cattle market. By the end of the week most classes of feeder cattle were trading steady to $1-$3 lower, however demand was said to be good from Midwest backgrounders and southern plains grazers. Numbers of cattle for sale last week in the western sale barns increased as producers finally begin to move their new crop calves to market due to weather disruptions the last couple of weeks. I would have to say that a lower trend to the feeder cattle market will prevail for most of this week as well following the direction of the futures and cash fed cattle market. Slaughter cows and bulls were mostly $1-$3 lower last week, as here too an increase in sale barn receipts and a lower trend to the domestic boneless beef market had cow killers buying live inventory defensively. Expect to see more of the same in that venue this week as well.
Cash Beef Situation and Outlook:
Last weeks cattle slaughter was estimated at 616,000 head, which would be 5,000 head below last week and 31,000 head below the same period a year ago. The weekly slaughter produced an estimated 482.8-mil lbs of beef. Year-to-date production figures show the kill running .2% above a year ago at 29.962 mil head and ytd beef production running .5% above a year ago at 23.197 bil lbs. From Thursday to Thursday of last week choice boxed beef gained $8.34 and select-boxed beef gained $5.15. Sales volume was lighter on the increased market with 1,113 loads of choice/select-fabricated cuts of beef sold throughout the week. Friday saw a lower beef market with the choice cutout closing $.35 lower to settle at $157.02 and the select cutout closing $.31 lower to settle at $146.18. Sales volume on Friday was light with 196 loads of beef sold (75.84 loads of choice fab cuts, 51.23 loads of select fab cuts, 21.80 loads of trim, 46.81 loads of grinds). The choice/select spread settled at $10.84 a loss of $.04 for the day, however a gain of $3.09 for the week.
The beef market was higher for most of the week last week, however the market was being met with some buyer resistance late in the week as many were getting their both their near term and forward needs into the end of the year covered. Once again the charge higher was led by active procurement of late year holiday cuts of beef as we see choice boneless ribeyes gaining $.60 in value and choice peeled tenders gaining $1.00 in value throughout the course of the week. This pushed rib and loin primal values 16% and 5% higher by the end of the trading week. There was some active interest in round items early in the week as retail interests covered up coming features for the first of December. A lack of export business kept more chuck product on the domestic market and as a result values drifted lower. Boneless beef items were mostly steady on the 50% fed cattle trim due to lighter fat cattle slaughters, but mostly lower on the boneless cow 90’s due to increased cow kills and competition from lower priced imports. By Friday of last week, many buyers were content with current inventory positions and were beginning to back away from the market waiting for opportunities to present themselves. Turkey items will now occupy most retail and wholesale attention for the next couple of weeks and I would expect to see beef values drift lower as a result of this. We may have one more beef buying spurt going into the first of December, however this will likely be short lived. Look for cutout values to drift lower from current price levels.
Futures Market Situation and Outlook:
For the week, December live cattle lost $2.75 to settle at $90.05, February live cattle lost $2.87 to settle at $90.67, and the April live cattle lost $2.85 to settle at $2.85. In the feeder cattle pit, November feeder cattle lost $2.25 to settle at $96.70, January feeder cattle lost $3.95 to settle at $95.27, and the March feeder cattle lost $3.75 to settle at $95.92. The reported CME feeder cattle index for 11/13/08 was $97.60 a gain of $.18 for the day and a gain of $1.15 for the week.
Friday’s live cattle volume saw 21,585 contracts trade in the pit and 11,347 contracts trade on Globex. Live cattle open interest gained 2,915 to come in this morning at 216,503. Friday’s feeder cattle volume saw 1,903 contracts trade in the pit and 703 contracts trade on Globex. Feeder cattle open interest gained 233 contracts to come in this morning at 19,149. For the week, live cattle open interest gained 329 contracts and feeder cattle open interest 140 contracts.
The latest commitment of traders report showed the small funds net short 5,090 contracts of live cattle futures and options a decline of 934 contracts from the previous week. The commercials were net short 72,909 contracts of F/O a gain of 444 contracts, the index funds were net long 105,891 contracts of live cattle F/O a decline of 1,144 contracts, and the small spec’s were net short 27,892 contracts of live cattle F/O a decline of 654 contracts. In the feeder cattle, small funds were net short 2,375 contracts of F/O a decline of 429 contracts, commercials were net long 1,175 contracts of F/O a decline of 875, index funds were net long 6,120 contracts of F/O a gain of 526, and the small spec’s were net short 4,920 contracts of F/O a gain of 80.
The live and feeder cattle futures markets were under pressure for most of last week on continued economic concerns and ideas beef and cattle markets were likely topping out for the near term. Live cattle lost close to $3 by the end of the week and feeders lost $4 because of this and took out many areas of near term chart support. December live cattle did manage to hold $90 by Friday and January feeder cattle did close above $95, however I would suspect we are down below these levels by early this week. Dow and S & P futures seem poised to make new lows by the first of the year and this will inevitably drag cattle futures down with them. Most traders will be expecting to see lower cash cattle and beef markets this week, which will keep a sell mentality in the cattle pits. First support on Dec live cattle will be found right here at $90, below that will be old contract lows of $87. Weekly resistance in December live cattle starts at $92 and goes up to $92.50. Jan feeders will have support at $95 early this week and below that $92-$93 seems likely. Resistance in Jan feeders will be found on rally attempts at $97.50 up to $98. Option trading was pretty quiet on Friday with volatilities increasing slightly. Look for a $.10-$.20 lower open to live and feeder cattle futures trading this morning. Trade Well!!!
Any one wanting a more detailed report on the cattle and beef markets including fundamental, chart and technical analysis, plus spec/hedge recommendations for packers, processors, producers, and meat buyers feel free to contact me by phone or e-mail to set up a free trial.
There is risk in trading futures and options.
Have a Good Day,
Troy Vetterkind
Vetterkind Cattle Brokerage, LLC
Chicago Board of Trade
141 West Jackson Blvd.
Suite 1220A
Chicago, IL 60604
1-888-299-1477 Toll Free
1-312-896-2068 Direct
1-708-224-5985 Mobile
tvetterkind@linngroup.com
Reproduction or rebroadcast of any portion of this information is strictly prohibited without the written permission of the Linn Group, Inc. the information reflected herein is derived from sources believed to be reliable; however, this information is not guaranteed as to its accuracy or completeness. Opinions expressed are subject to change without notice. This material and any view expressed herein are provided for informational purposes only and should not be construed in any way as an inducement to buy or sell commodity futures or options contracts. The Linn Group and its officers, directors, employees and affiliates may take positions for their own accounts in contracts referred to herein. Trading futures involves risk of loss. Past performance is not indicative of future results.
Friday, November 14, 2008
November 14, 2008
Good Morning from the Chicago Board of Trade,
Cash Cattle Situation and Outlook:
We saw further fed cattle trading in the northern feedlots of Nebraska and Iowa yesterday with prices running generally steady with Wednesday at $90 live and $1.44 dressed. It looks as though an additional 25,000 head of cattle traded at that money between the two states. Southern feedlot trade remains at a standstill with packers bidding $92 live and feedlots wanting $94-$95 for their cattle. Feedlots in the southern section of the country were holding firm with their offering prices after the huge turnaround in the stock market yesterday and they remain very current on their market ready numbers of fed cattle. I would say that short bought southern packers will move closer to asking prices today and we should see a trade that takes place no worse than steady with last week. Next week we may see the market stall out a bit as packers will be buying for a short Thanksgiving kill week and the beef market could begin to fall back from current price levels. Tight fed cattle supplies for the next 3-4 weeks will keep the market from falling out of bed though.
Cash Beef Situation and Outlook:
Yesterdays kill was estimated at 125,000 head, which would be even with a week ago and 5,000 head below the same period last week. The week-to-date kill now stands at 469,000 head, which would be 14,000 head below the same period a week ago. The boxed beef market was $.12 higher on the choice cutout to settle at $157.37 and the select cutout was $.53 higher to settle at $146.49. Sales volume was good with 291 loads of beef sold (132.65 loads of choice fab cuts, 87.47 loads of select fab cuts, 23.24 loads of trim, 47.82 loads of grinds). The choice/select spread settled at $10.88 a loss of $.41.
The boxed beef market was higher yesterday on renewed interest in procuring choice rib and loin meat. End meats were also trading steady to higher yesterday as packers have done a good job of managing supply with the current level of demand from retail and wholesale buyers. Prices of ribeyes and PSMO’s could be getting close to a near term top though and this could start to level off cutout values. Next weeks attention will also turn to moving turkey product ahead of Thanksgiving, which could have an adverse effect on beef values. Look for a softer trend to begin develop in the beef market by the middle of next week. Beef exports for the week of October 31-November 6, 2008 are as follows:
Beef: Net sales of 18,200 MT were primarily for Mexico (8,900 MT, including 7,300 MT previously reported), South Korea (3,900 MT, including 3,800 MT previously reported), Canada (3,000 MT), and Japan (1,700 MT, including 900 MT previously reported). Net Sales of 700 MT for delivery in 2009 were primarily for the Netherlands (400 MT) and Taiwan (100 MT). Exports of 8,000 MT were mainly to Mexico (2,800 MT), South Korea (1,500 MT), Canada (1,200 MT), Japan (900 MT), Vietnam (900 MT), and Taiwan (300 MT). Note: Accumulated exports were adjusted down for Mexico (7,600 MT), South Korea (3,800 MT), Japan (900 MT), Hong Kong (200 MT), and Vietnam (100 MT).
Futures Market Situation and Outlook:
December live cattle settled at $90.55 a gain of $.02, February live cattle settled at $91.72 steady on the day, and April live cattle settled at $92.82 a gain of $.02. In the feeder cattle pit, November feeder cattle settled at $97.17 a gain of $.32, January feeder cattle settled at $96.37, and the March feeder cattle settled at $97.12 a gain of $.12. The reported CME feeder cattle index for 11/12/08 was $97.42 a loss of $.19.
Yesterdays live cattle volume saw 43,219 contracts trade in the pit and 19,451 contracts trade in the pit. Live cattle open interest gained 1,872 contracts to come in this morning at 213,649. Yesterday’s feeder cattle volume saw 2,907 contracts trade in the pit and 892 contracts trade on Globex. Feeder cattle open interest declined 243 contracts to come in this morning at 18,925.
Live and feeder cattle futures managed to settle mostly steady to modestly higher yesterday following the late come back in the equity markets. It was encouraging to see the cattle futures come back from their midsession sell off, however I am still not convinced we are out of the woods yet. We still need to see December live cattle close above $90 and January feeder cattle close above $95 by this afternoon in order to keep a bullish slant on next weeks early trade. December live cattle will find resistance today and early next week at $92.50 and January feeder cattle will find resistance at $98. We will need to close above those price levels early next week to keep any rally attempts alive. Hedgers will still want to use strength in the market to get some protection on Dec, Jan, and Feb marketing’s. Look for a $.10-$.20 higher open to cattle futures this morning. Trade Well!!!
Any one wanting a more detailed report on the cattle and beef markets including fundamental, chart and technical analysis, plus spec/hedge recommendations for packers, processors, producers, and meat buyers feel free to contact me by phone or e-mail to set up a free trial.
There is risk in trading futures and options.
Have a Good Day,
Troy Vetterkind
Vetterkind Cattle Brokerage, LLC
Chicago Board of Trade
141 West Jackson Blvd.
Suite 1220A
Chicago, IL 60604
1-888-299-1477 Toll Free
1-312-896-2068 Direct
1-708-224-5985 Mobile
tvetterkind@linngroup.com
Reproduction or rebroadcast of any portion of this information is strictly prohibited without the written permission of the Linn Group, Inc. the information reflected herein is derived from sources believed to be reliable; however, this information is not guaranteed as to its accuracy or completeness. Opinions expressed are subject to change without notice. This material and any view expressed herein are provided for informational purposes only and should not be construed in any way as an inducement to buy or sell commodity futures or options contracts. The Linn Group and its officers, directors, employees and affiliates may take positions for their own accounts in contracts referred to herein. Trading futures involves risk of loss. Past performance is not indicative of future results.
Good Morning from the Chicago Board of Trade,
Cash Cattle Situation and Outlook:
We saw further fed cattle trading in the northern feedlots of Nebraska and Iowa yesterday with prices running generally steady with Wednesday at $90 live and $1.44 dressed. It looks as though an additional 25,000 head of cattle traded at that money between the two states. Southern feedlot trade remains at a standstill with packers bidding $92 live and feedlots wanting $94-$95 for their cattle. Feedlots in the southern section of the country were holding firm with their offering prices after the huge turnaround in the stock market yesterday and they remain very current on their market ready numbers of fed cattle. I would say that short bought southern packers will move closer to asking prices today and we should see a trade that takes place no worse than steady with last week. Next week we may see the market stall out a bit as packers will be buying for a short Thanksgiving kill week and the beef market could begin to fall back from current price levels. Tight fed cattle supplies for the next 3-4 weeks will keep the market from falling out of bed though.
Cash Beef Situation and Outlook:
Yesterdays kill was estimated at 125,000 head, which would be even with a week ago and 5,000 head below the same period last week. The week-to-date kill now stands at 469,000 head, which would be 14,000 head below the same period a week ago. The boxed beef market was $.12 higher on the choice cutout to settle at $157.37 and the select cutout was $.53 higher to settle at $146.49. Sales volume was good with 291 loads of beef sold (132.65 loads of choice fab cuts, 87.47 loads of select fab cuts, 23.24 loads of trim, 47.82 loads of grinds). The choice/select spread settled at $10.88 a loss of $.41.
The boxed beef market was higher yesterday on renewed interest in procuring choice rib and loin meat. End meats were also trading steady to higher yesterday as packers have done a good job of managing supply with the current level of demand from retail and wholesale buyers. Prices of ribeyes and PSMO’s could be getting close to a near term top though and this could start to level off cutout values. Next weeks attention will also turn to moving turkey product ahead of Thanksgiving, which could have an adverse effect on beef values. Look for a softer trend to begin develop in the beef market by the middle of next week. Beef exports for the week of October 31-November 6, 2008 are as follows:
Beef: Net sales of 18,200 MT were primarily for Mexico (8,900 MT, including 7,300 MT previously reported), South Korea (3,900 MT, including 3,800 MT previously reported), Canada (3,000 MT), and Japan (1,700 MT, including 900 MT previously reported). Net Sales of 700 MT for delivery in 2009 were primarily for the Netherlands (400 MT) and Taiwan (100 MT). Exports of 8,000 MT were mainly to Mexico (2,800 MT), South Korea (1,500 MT), Canada (1,200 MT), Japan (900 MT), Vietnam (900 MT), and Taiwan (300 MT). Note: Accumulated exports were adjusted down for Mexico (7,600 MT), South Korea (3,800 MT), Japan (900 MT), Hong Kong (200 MT), and Vietnam (100 MT).
Futures Market Situation and Outlook:
December live cattle settled at $90.55 a gain of $.02, February live cattle settled at $91.72 steady on the day, and April live cattle settled at $92.82 a gain of $.02. In the feeder cattle pit, November feeder cattle settled at $97.17 a gain of $.32, January feeder cattle settled at $96.37, and the March feeder cattle settled at $97.12 a gain of $.12. The reported CME feeder cattle index for 11/12/08 was $97.42 a loss of $.19.
Yesterdays live cattle volume saw 43,219 contracts trade in the pit and 19,451 contracts trade in the pit. Live cattle open interest gained 1,872 contracts to come in this morning at 213,649. Yesterday’s feeder cattle volume saw 2,907 contracts trade in the pit and 892 contracts trade on Globex. Feeder cattle open interest declined 243 contracts to come in this morning at 18,925.
Live and feeder cattle futures managed to settle mostly steady to modestly higher yesterday following the late come back in the equity markets. It was encouraging to see the cattle futures come back from their midsession sell off, however I am still not convinced we are out of the woods yet. We still need to see December live cattle close above $90 and January feeder cattle close above $95 by this afternoon in order to keep a bullish slant on next weeks early trade. December live cattle will find resistance today and early next week at $92.50 and January feeder cattle will find resistance at $98. We will need to close above those price levels early next week to keep any rally attempts alive. Hedgers will still want to use strength in the market to get some protection on Dec, Jan, and Feb marketing’s. Look for a $.10-$.20 higher open to cattle futures this morning. Trade Well!!!
Any one wanting a more detailed report on the cattle and beef markets including fundamental, chart and technical analysis, plus spec/hedge recommendations for packers, processors, producers, and meat buyers feel free to contact me by phone or e-mail to set up a free trial.
There is risk in trading futures and options.
Have a Good Day,
Troy Vetterkind
Vetterkind Cattle Brokerage, LLC
Chicago Board of Trade
141 West Jackson Blvd.
Suite 1220A
Chicago, IL 60604
1-888-299-1477 Toll Free
1-312-896-2068 Direct
1-708-224-5985 Mobile
tvetterkind@linngroup.com
Reproduction or rebroadcast of any portion of this information is strictly prohibited without the written permission of the Linn Group, Inc. the information reflected herein is derived from sources believed to be reliable; however, this information is not guaranteed as to its accuracy or completeness. Opinions expressed are subject to change without notice. This material and any view expressed herein are provided for informational purposes only and should not be construed in any way as an inducement to buy or sell commodity futures or options contracts. The Linn Group and its officers, directors, employees and affiliates may take positions for their own accounts in contracts referred to herein. Trading futures involves risk of loss. Past performance is not indicative of future results.
Wednesday, November 12, 2008
November 12, 2008
Good Morning from the Chicago Board of Trade,
Cash Cattle Situation and Outlook:
The cash feedlot trade was at a standstill yesterday with packer bids of $91-$92 live going unmatched against feedlot offering prices of $96-$97 live and $1.50-$1.52 dressed. Producers were not interested in entertaining lower packer bids with the board being down sharply so early in the week. This is especially true in the southern feeding states where showlist numbers are smaller when compared to last week. Packers have this weeks kill curtailed in an attempt to keep beef prices propped up and so far this has been the case but we could start running into some buyer resistance on certain middle meat items in the beef carcass. This is not to say that we can’t see a higher live market for this week, but the market could back off a little going into the Thanksgiving holiday week. There will certainly be no oversupply of fed cattle numbers coming to the market in the next 4 weeks, however the market will definitely ebb and flow with beef demand and holiday schedules for the next couple of weeks. For the rest of this week though, I still think we can hold the fed market together as long as the beef or the futures don’t fall completely out of bed. I’ll still call for $94-$95 live and $1.46-$1.48 dressed trade in the feedlots by the end of the week.
Cash Beef Situation and Outlook:
The USDA did not publish slaughter numbers yesterday due to the Veteran’s Day holiday; however most in the industry are looking for a 625,000 head production week. The boxed beef market was higher yesterday with the choice cutout closing $2.62 higher to settle at $154.68 and the select cutout closing $.71 higher to settle at $144.27. Sales volume was light with 218 loads of beef sold (70.27 loads of choice fab cuts, 72.61 loads of select fab cuts, 29.88 loads of trim, 45.06 loads of grinds). The choice/select spread settled at $10.40 a gain of $1.91.
The beef market managed to post another day of solid gains, however some of those gains may begin to slow down in the coming sessions. Packers were able to command higher prices for most rib and loin items because of reduced production levels but many on the buy side of the equation were becoming of the opinion that prices were high enough for the time being. Choice bone-in and boneless ribeyes have gained $.65-$.96 ½ respectively since last week with choice PSMO’s gaining $.57 during the same time frame. These cuts alone are almost solely responsible for putting the $10 cwt on choice cutout values we have seen since last Tuesday. With that said though, markets for middle meats remain firm with continued active interest in procuring inside/outside rounds and chuck rolls for up coming feature ads. Choice and select short ribs were a laggard yesterday as export demand for these items is down. Boneless beef items were mixed once again, with sharply lower pricing noted on the boneless cow 90’s due to increasing cow numbers coming to market across the country and competition from lower priced imported beef. The 50’s market remained firm with the cut in fed cattle kill’s being the supportive factor there. I would look for the recent sharp gains in the middle meats complex to level off a bit, which means the end meat complex will have to be responsible for carrying the cutout higher. With a lack of export business and Thanksgiving right around the corner that would seem unlikely. Choice and select cutout values have met some near term price objectives and I would look for values to settle back into the lower $1.50’s to upper $1.40’s going into the Thanksgiving holiday week.
Futures Market Situation and Outlook:
December live cattle settled at $91.60 a loss of $1.05, February live cattle settled at $92.80 a loss of $1.35, and the April live cattle settled at $93.67 a loss of $1.60. In the feeder cattle pit, November feeder cattle settled at $98.20 a loss of $.80, January feeder cattle settled at $97.20 a loss of $1.67, and the March feeder cattle settled at $98.17 a loss of $1.45. The reported CME feeder cattle index for 11/10/08 was $97.74 a gain of $.19.
Yesterdays live cattle volume saw 37,700 contracts trade in the pit and 17,943 contracts trade on Globex. Live cattle open interest declined 1,757 contracts to come in this morning at 212,279. Yesterday’s feeder cattle volume saw 3,537 contracts trade in the pit and 530 contracts trade on Globex. Feeder cattle open interest gained 243 contracts to come in this morning at 19,020.
Live and feeder cattle futures settled under pressure yesterday on ideas the cash beef and cattle markets could move into a sideways to lower trading pattern and steep losses in the equity markets. Daily support levels in Dec live cattle and Jan feeders were violated early in the session yesterday and this added to spec and commercial selling interest. Weekly support at $91 in the Dec live and $97 in the Jan feeders managed to hold yesterday, however those support areas will likely be challenged today or tomorrow. Closing below these price levels by Friday opens the door to a lower trending market going into next week. I would say that we would need to see December live cattle close back above $92 and January feeder cattle close back above $98.50 today or tomorrow in order to negate some of yesterday’s bearishness. The “Goldman Roll” continued yesterday with an estimated 8-10,000 Dec/Feb spreads done in the pit and 6-7,000 done on the screen. Options trading was quiet with no real features, however volatility did come down again in Dec, Feb, and April at the money straddles. Overnight stock markets seem to be a little higher this morning, which should help to promote some stability in cattle futures on the open today. Rally attempts back towards yesterday’s highs will likely be viewed as a selling opportunity by many though. Look for a $.10-$.20 higher open to live and feeder cattle futures this morning. Trade Well!!!
Any one wanting a more detailed report on the cattle and beef markets including fundamental, chart and technical analysis, plus spec/hedge recommendations for packers, processors, producers, and meat buyers feel free to contact me by phone or e-mail to set up a free trial.
There is risk in trading futures and options.
Have a Good Day,
Troy Vetterkind
Vetterkind Cattle Brokerage, LLC
Chicago Board of Trade
141 West Jackson Blvd.
Suite 1220A
Chicago, IL 60604
1-888-299-1477 Toll Free
1-312-896-2068 Direct
1-708-224-5985 Mobile
tvetterkind@linngroup.com
Reproduction or rebroadcast of any portion of this information is strictly prohibited without the written permission of the Linn Group, Inc. the information reflected herein is derived from sources believed to be reliable; however, this information is not guaranteed as to its accuracy or completeness. Opinions expressed are subject to change without notice. This material and any view expressed herein are provided for informational purposes only and should not be construed in any way as an inducement to buy or sell commodity futures or options contracts. The Linn Group and its officers, directors, employees and affiliates may take positions for their own accounts in contracts referred to herein. Trading futures involves risk of loss. Past performance is not indicative of future results.
Good Morning from the Chicago Board of Trade,
Cash Cattle Situation and Outlook:
The cash feedlot trade was at a standstill yesterday with packer bids of $91-$92 live going unmatched against feedlot offering prices of $96-$97 live and $1.50-$1.52 dressed. Producers were not interested in entertaining lower packer bids with the board being down sharply so early in the week. This is especially true in the southern feeding states where showlist numbers are smaller when compared to last week. Packers have this weeks kill curtailed in an attempt to keep beef prices propped up and so far this has been the case but we could start running into some buyer resistance on certain middle meat items in the beef carcass. This is not to say that we can’t see a higher live market for this week, but the market could back off a little going into the Thanksgiving holiday week. There will certainly be no oversupply of fed cattle numbers coming to the market in the next 4 weeks, however the market will definitely ebb and flow with beef demand and holiday schedules for the next couple of weeks. For the rest of this week though, I still think we can hold the fed market together as long as the beef or the futures don’t fall completely out of bed. I’ll still call for $94-$95 live and $1.46-$1.48 dressed trade in the feedlots by the end of the week.
Cash Beef Situation and Outlook:
The USDA did not publish slaughter numbers yesterday due to the Veteran’s Day holiday; however most in the industry are looking for a 625,000 head production week. The boxed beef market was higher yesterday with the choice cutout closing $2.62 higher to settle at $154.68 and the select cutout closing $.71 higher to settle at $144.27. Sales volume was light with 218 loads of beef sold (70.27 loads of choice fab cuts, 72.61 loads of select fab cuts, 29.88 loads of trim, 45.06 loads of grinds). The choice/select spread settled at $10.40 a gain of $1.91.
The beef market managed to post another day of solid gains, however some of those gains may begin to slow down in the coming sessions. Packers were able to command higher prices for most rib and loin items because of reduced production levels but many on the buy side of the equation were becoming of the opinion that prices were high enough for the time being. Choice bone-in and boneless ribeyes have gained $.65-$.96 ½ respectively since last week with choice PSMO’s gaining $.57 during the same time frame. These cuts alone are almost solely responsible for putting the $10 cwt on choice cutout values we have seen since last Tuesday. With that said though, markets for middle meats remain firm with continued active interest in procuring inside/outside rounds and chuck rolls for up coming feature ads. Choice and select short ribs were a laggard yesterday as export demand for these items is down. Boneless beef items were mixed once again, with sharply lower pricing noted on the boneless cow 90’s due to increasing cow numbers coming to market across the country and competition from lower priced imported beef. The 50’s market remained firm with the cut in fed cattle kill’s being the supportive factor there. I would look for the recent sharp gains in the middle meats complex to level off a bit, which means the end meat complex will have to be responsible for carrying the cutout higher. With a lack of export business and Thanksgiving right around the corner that would seem unlikely. Choice and select cutout values have met some near term price objectives and I would look for values to settle back into the lower $1.50’s to upper $1.40’s going into the Thanksgiving holiday week.
Futures Market Situation and Outlook:
December live cattle settled at $91.60 a loss of $1.05, February live cattle settled at $92.80 a loss of $1.35, and the April live cattle settled at $93.67 a loss of $1.60. In the feeder cattle pit, November feeder cattle settled at $98.20 a loss of $.80, January feeder cattle settled at $97.20 a loss of $1.67, and the March feeder cattle settled at $98.17 a loss of $1.45. The reported CME feeder cattle index for 11/10/08 was $97.74 a gain of $.19.
Yesterdays live cattle volume saw 37,700 contracts trade in the pit and 17,943 contracts trade on Globex. Live cattle open interest declined 1,757 contracts to come in this morning at 212,279. Yesterday’s feeder cattle volume saw 3,537 contracts trade in the pit and 530 contracts trade on Globex. Feeder cattle open interest gained 243 contracts to come in this morning at 19,020.
Live and feeder cattle futures settled under pressure yesterday on ideas the cash beef and cattle markets could move into a sideways to lower trading pattern and steep losses in the equity markets. Daily support levels in Dec live cattle and Jan feeders were violated early in the session yesterday and this added to spec and commercial selling interest. Weekly support at $91 in the Dec live and $97 in the Jan feeders managed to hold yesterday, however those support areas will likely be challenged today or tomorrow. Closing below these price levels by Friday opens the door to a lower trending market going into next week. I would say that we would need to see December live cattle close back above $92 and January feeder cattle close back above $98.50 today or tomorrow in order to negate some of yesterday’s bearishness. The “Goldman Roll” continued yesterday with an estimated 8-10,000 Dec/Feb spreads done in the pit and 6-7,000 done on the screen. Options trading was quiet with no real features, however volatility did come down again in Dec, Feb, and April at the money straddles. Overnight stock markets seem to be a little higher this morning, which should help to promote some stability in cattle futures on the open today. Rally attempts back towards yesterday’s highs will likely be viewed as a selling opportunity by many though. 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.
Monday, November 10, 2008
November 10, 2008
Good Morning from the Chicago Board of Trade,
Cash Cattle Situation and Outlook:
We left last week with a fed cattle market that finally trades at $94 live and $1.49 dressed in Texas, Oklahoma, New Mexico, and Kansas and mostly $92- $94 live and $1.45-$1.46 dressed in Nebraska and Colorado. All of this would be $2 higher on a live and dressed weight basis. Movement looks to be moderate in all trading areas and I will report on weekly totals in the morning once everything is counted and reported to the USDA. Last weeks feeder cattle market was mostly $1-$4 higher on the yearling cattle and fully $5 higher on the calves. Buyer demand was described as good in all trading areas as yearling numbers begin to dry up and calf demand for winter grazing remains robust. For the week slaughter cows were off by $2-$4 as increased marketing’s and lower demand for boneless beef weighed on values. Looking into this week I think we could see a better tone to cash cattle values early in the week and depending on well beef demand holds up possibly put another dollar on fed cattle values. Fed cattle numbers remain manageable and beef demand is still firm, although some buyers were saying they had some of their orders filled for a couple of weeks coming out of last week. Feeder cattle demand should remain firm for the first part of this week as buyers continue to fill orders for winter grazers. Slaughter cows will likely start the week on a softer tone and remain that way for most of the week.
Cash Beef Situation and Outlook:
Last weeks cattle slaughter was estimated at 621,000 head, which would be 17,000 head below the previous week and 22,000 head below the same week a year ago. The weekly slaughter produced an estimated 488.9 mil lbs of beef. The year-to-date cattle slaughter now stands at 29.346 mil head or .3% above last year and ytd beef production stands at 22.718 bil lbs, which would be .7% above a year ago. Through Thursday of last week, choice boxed beef gained $6.82 to settle at $149.03 and select boxed beef gained $5.02 to settle at $141.34. Sales volume increased last week with 1,227 loads of choice/select fabricated cuts sold. Friday saw another higher day in the beef trade with the choice cutout closing $1.22 higher to settle at $150.25 and the select cutout closing $1.16 higher to settle at $142.50. Sales volume on Friday was light with 246 loads of beef sold (97.85 loads of choice fab cuts, 62.90 loads of select fab cuts, 37.20 loads of trim, 47.63 loads of grinds). The choice/select spread settled at $7.75 a gain of $.06 for the week and a gain of $1.80 for the week.
Last week saw decent gains in the beef market as buyers reentered the market to take on a portion of their holiday needs. Choice rib items led the charge higher gaining close to 25% in value last week. There was also increased demand in rib, chuck, and round cuts not only from domestic retail interests, but it was also said that there was some increased export business as well. As mentioned above, some buyers were of the opinion that prices have moved too high too fast last week and were moving to the sidelines to see how early week demand was going to play out before committing to further purchases. I will call for a higher steady to higher beef market for at least the first part of this week until more is know about near term demand.
Futures Market Situation and Outlook:
For the week, December live cattle gained $.10 to settle at $92.80, February live cattle lost $.70 to settle at $93.55, and April live cattle gained $.05 to settle at $94.80. In the feeder cattle pit, November feeder cattle settled at $98.95 a gain of $.32, January feeder cattle gained $1.17 to settle at $99.22, and the March feeder cattle gained $1.15 to settle at $99.67. The reported CME feeder cattle index for 11/6/08 was $96.45 a loss of $.14 for the day and a gain of $.39 for the week.
Friday’s live cattle volume saw 33,840 contracts trade in the pit and 13,247 contracts trade on Globex. Live cattle open interest declined 2,198 contracts to come in this morning at 216,252. Friday’s feeder cattle volume saw 1,711 contracts trade in the pit and 629 contracts trade on Globex. Feeder cattle open interest gained 258 contracts to come in this morning at 19,010. For the week live cattle open interest increased 3,019 contracts and feeder cattle open interest declined 1,068 contracts.
The latest commitment of traders report showed the funds net short 6,024 contracts of live cattle futures/options a decline of 6,529. The commercials were net short 72,465 a gain of 4,337, the index funds were net long 107,035 a decline of 551, and the small spec trader was net short 28,546 a gain of 1,641. In the feeder cattle, the funds were net short 2,804 a decline of 1,430, commercials were net long 2,051 a decline of 1,386, index funds were net long 5,594 a gain of 298, and the small spec trader was net short 4,840 a gain of 342.
Live cattle futures ended the week mostly steady with moderate gains in feeder cattle. The market spent the week anticipating a higher fed cattle trade and was able to achieve it, so we will now work to price in the possibility of another higher trade this week. Friday was the first day of the “Goldman Roll” for December live cattle with an estimated 6,000 contracts reportedly done on the close. The Dec/Feb spread lost $.75 on the close as reportedly there was no one on the other side to absorb the December sales. The cash fundamentals of the fed cattle market still feel pretty good and I still think we can trade fed cattle higher into the end of the month. That being said, we will have weeks when we will be higher and weeks when we will be lower, but overall I still like buying some breaks in December cattle on near term weakness. I would have liked to see feeder cattle close above $100 on Friday and we are going to have to keep an eye on them early this week for price direction. I still think $102-$103 is attainable in Jan feeders by the end of the month. Look for a $.10-$.20 higher open to live and feeder cattle futures this morning. Trade Well!!!
Any one wanting a more detailed report on the cattle and beef markets including fundamental, chart and technical analysis, plus spec/hedge recommendations for packers, processors, producers, and meat buyers feel free to contact me by phone or e-mail to set up a free trial.
There is risk in trading futures and options.
Have a Good Day,
Troy Vetterkind
Vetterkind Cattle Brokerage, LLC
Chicago Board of Trade
141 West Jackson Blvd.
Suite 1220A
Chicago, IL 60604
1-888-299-1477 Toll Free
1-312-896-2068 Direct
1-708-224-5985 Mobile
tvetterkind@linngroup.com
Reproduction or rebroadcast of any portion of this information is strictly prohibited without the written permission of the Linn Group, Inc. the information reflected herein is derived from sources believed to be reliable; however, this information is not guaranteed as to its accuracy or completeness. Opinions expressed are subject to change without notice. This material and any view expressed herein are provided for informational purposes only and should not be construed in any way as an inducement to buy or sell commodity futures or options contracts. The Linn Group and its officers, directors, employees and affiliates may take positions for their own accounts in contracts referred to herein. Trading futures involves risk of loss. Past performance is not indicative of future results.
Good Morning from the Chicago Board of Trade,
Cash Cattle Situation and Outlook:
We left last week with a fed cattle market that finally trades at $94 live and $1.49 dressed in Texas, Oklahoma, New Mexico, and Kansas and mostly $92- $94 live and $1.45-$1.46 dressed in Nebraska and Colorado. All of this would be $2 higher on a live and dressed weight basis. Movement looks to be moderate in all trading areas and I will report on weekly totals in the morning once everything is counted and reported to the USDA. Last weeks feeder cattle market was mostly $1-$4 higher on the yearling cattle and fully $5 higher on the calves. Buyer demand was described as good in all trading areas as yearling numbers begin to dry up and calf demand for winter grazing remains robust. For the week slaughter cows were off by $2-$4 as increased marketing’s and lower demand for boneless beef weighed on values. Looking into this week I think we could see a better tone to cash cattle values early in the week and depending on well beef demand holds up possibly put another dollar on fed cattle values. Fed cattle numbers remain manageable and beef demand is still firm, although some buyers were saying they had some of their orders filled for a couple of weeks coming out of last week. Feeder cattle demand should remain firm for the first part of this week as buyers continue to fill orders for winter grazers. Slaughter cows will likely start the week on a softer tone and remain that way for most of the week.
Cash Beef Situation and Outlook:
Last weeks cattle slaughter was estimated at 621,000 head, which would be 17,000 head below the previous week and 22,000 head below the same week a year ago. The weekly slaughter produced an estimated 488.9 mil lbs of beef. The year-to-date cattle slaughter now stands at 29.346 mil head or .3% above last year and ytd beef production stands at 22.718 bil lbs, which would be .7% above a year ago. Through Thursday of last week, choice boxed beef gained $6.82 to settle at $149.03 and select boxed beef gained $5.02 to settle at $141.34. Sales volume increased last week with 1,227 loads of choice/select fabricated cuts sold. Friday saw another higher day in the beef trade with the choice cutout closing $1.22 higher to settle at $150.25 and the select cutout closing $1.16 higher to settle at $142.50. Sales volume on Friday was light with 246 loads of beef sold (97.85 loads of choice fab cuts, 62.90 loads of select fab cuts, 37.20 loads of trim, 47.63 loads of grinds). The choice/select spread settled at $7.75 a gain of $.06 for the week and a gain of $1.80 for the week.
Last week saw decent gains in the beef market as buyers reentered the market to take on a portion of their holiday needs. Choice rib items led the charge higher gaining close to 25% in value last week. There was also increased demand in rib, chuck, and round cuts not only from domestic retail interests, but it was also said that there was some increased export business as well. As mentioned above, some buyers were of the opinion that prices have moved too high too fast last week and were moving to the sidelines to see how early week demand was going to play out before committing to further purchases. I will call for a higher steady to higher beef market for at least the first part of this week until more is know about near term demand.
Futures Market Situation and Outlook:
For the week, December live cattle gained $.10 to settle at $92.80, February live cattle lost $.70 to settle at $93.55, and April live cattle gained $.05 to settle at $94.80. In the feeder cattle pit, November feeder cattle settled at $98.95 a gain of $.32, January feeder cattle gained $1.17 to settle at $99.22, and the March feeder cattle gained $1.15 to settle at $99.67. The reported CME feeder cattle index for 11/6/08 was $96.45 a loss of $.14 for the day and a gain of $.39 for the week.
Friday’s live cattle volume saw 33,840 contracts trade in the pit and 13,247 contracts trade on Globex. Live cattle open interest declined 2,198 contracts to come in this morning at 216,252. Friday’s feeder cattle volume saw 1,711 contracts trade in the pit and 629 contracts trade on Globex. Feeder cattle open interest gained 258 contracts to come in this morning at 19,010. For the week live cattle open interest increased 3,019 contracts and feeder cattle open interest declined 1,068 contracts.
The latest commitment of traders report showed the funds net short 6,024 contracts of live cattle futures/options a decline of 6,529. The commercials were net short 72,465 a gain of 4,337, the index funds were net long 107,035 a decline of 551, and the small spec trader was net short 28,546 a gain of 1,641. In the feeder cattle, the funds were net short 2,804 a decline of 1,430, commercials were net long 2,051 a decline of 1,386, index funds were net long 5,594 a gain of 298, and the small spec trader was net short 4,840 a gain of 342.
Live cattle futures ended the week mostly steady with moderate gains in feeder cattle. The market spent the week anticipating a higher fed cattle trade and was able to achieve it, so we will now work to price in the possibility of another higher trade this week. Friday was the first day of the “Goldman Roll” for December live cattle with an estimated 6,000 contracts reportedly done on the close. The Dec/Feb spread lost $.75 on the close as reportedly there was no one on the other side to absorb the December sales. The cash fundamentals of the fed cattle market still feel pretty good and I still think we can trade fed cattle higher into the end of the month. That being said, we will have weeks when we will be higher and weeks when we will be lower, but overall I still like buying some breaks in December cattle on near term weakness. I would have liked to see feeder cattle close above $100 on Friday and we are going to have to keep an eye on them early this week for price direction. I still think $102-$103 is attainable in Jan feeders by the end of the month. 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.
Friday, November 7, 2008
November 7, 2008
Good Morning from the Chicago Board of Trade,
Cash Cattle Situation and Outlook:
Yesterday’s cash fed cattle market was pretty quiet on the southern plains with some activity reported in the north on a limited basis. Nebraska feedlots sold a few thousand head of fed cattle yesterday afternoon for $1.40-$1.44 dressed. Iowa feedlots sold close to 12,000 head of fed cattle for $1.40-$1.44 dressed as well. The southern feeding states didn’t report any transactions with packer bids of $92-$92.50 going unmatched against offering prices of $95-$96. We should see a more active trade begin to develop this morning as short bought packers move closer to producer offering prices. The futures should see a little rebound from yesterdays sell off and the beef market still feels to be in pretty good shape, so I will continue to call for a $94-$95 live and $1.44-$1.46 dressed trade by the end of the day. Looking out into next week, we should be able to hold the fed cattle market together as beef demand looks to have picked up slightly and fed cattle numbers will remain manageable. Feeder cattle markets remain supported despite yesterdays sell off in the futures. Slaughter cow markets are still lower and this should be the trend gong into next week, higher feeders and lower cows.
Cash Beef Situation and Outlook:
Yesterdays kill was estimated at 125,000 head, which would be 3,000 head below last week and 6,000 head below the same day a year ago. The week-to-date kill stands at 483,000 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 $1.39 higher to settle at $149.03 and the select cutout closing $1.02 higher to settle at $141.34. Sales volume was light with 275 loads of beef sold (110.10 loads of choice fab cuts, 97.30 loads of select fab cuts, 12.78 loads of trim, and 54.77 loads of grinds). The choice/select spread settled at $7.69 a gain of $.37.
The beef market was higher again yesterday on continued strength in the middle meats complex of the beef carcass. Sharp gains were once again posted in ribeyes and peeled tenderloins yesterday, which helped lift choice cutout values back to the $1.49 level. There was also active buying interest in chuck rolls, most round items, strip loins, and tenderloin butts. Most coarse ground and boneless beef markets were higher yesterday as demand from retail interests has picked up on those items. We should continue to see further strength in the beef market going into early next week.
Futures Market Situation and Outlook:
December live cattle settled at $93.30 a loss of $.97, February live cattle settled at $93.12 a loss of $1.32, and April live cattle settled at $93.95 a loss of $1.60. In the feeder cattle pit, November feeder cattle settled at $98.87 a loss of $1.77, January feeder cattle settled at $98.87 a loss of $1.80, and the March feeder cattle settled at $99.02 a loss of $2.15. The reported CME feeder cattle index for 11/5/08 was $96.59 a gain of $.26.
Yesterdays live cattle volume saw 26,368 contracts trade in the pit and 10,882 contracts trade on Globex. Live cattle open interest declined 645 contracts to come in this morning at 218,493. Yesterday’s feeder cattle volume saw 2,228 contracts trade in the pit and 537 contracts trade on Globex. Feeder cattle open interest gained 3 contracts to come in this morning at 18,760.
Yesterday’s price action in the cattle futures was entirely dictated by the steep losses in the stock market following the historic Presidential election of 2008. Fundamentals of the cattle and beef markets would suggest that there is some further upside in the futures and I still think we could see $96-$97 in front month fat cattle futures and $102-$103 in the feeder cattle futures by the end of the month. If these price targets are achieved we will want to get a little more serious about getting some risk management done on expected late December and first quarter 2009 cattle marketing’s. Keeping December live cattle above $91 and January feeder cattle above $96.50 by the close of trading today keeps the market looking positive into the first half of next week. So far this morning, outside commodity and stock markets are acting more stabile, which should help promote a higher cattle futures market for today. Look for a $.10-$.20 higher open to live and feeder cattle futures this morning. Trade Well!!!
Any one wanting a more detailed report on the cattle and beef markets including fundamental, chart and technical analysis, plus spec/hedge recommendations for packers, processors, producers, and meat buyers feel free to contact me by phone or e-mail to set up a free trial.
There is risk in trading futures and options.
Have a Good Day,
Troy Vetterkind
Vetterkind Cattle Brokerage, LLC
Chicago Board of Trade
141 West Jackson Blvd.
Suite 1220A
Chicago, IL 60604
1-888-299-1477 Toll Free
1-312-896-2068 Direct
1-708-224-5985 Mobile
tvetterkind@linngroup.com
Reproduction or rebroadcast of any portion of this information is strictly prohibited without the written permission of the Linn Group, Inc. the information reflected herein is derived from sources believed to be reliable; however, this information is not guaranteed as to its accuracy or completeness. Opinions expressed are subject to change without notice. This material and any view expressed herein are provided for informational purposes only and should not be construed in any way as an inducement to buy or sell commodity futures or options contracts. The Linn Group and its officers, directors, employees and affiliates may take positions for their own accounts in contracts referred to herein. Trading futures involves risk of loss. Past performance is not indicative of future results.
Good Morning from the Chicago Board of Trade,
Cash Cattle Situation and Outlook:
Yesterday’s cash fed cattle market was pretty quiet on the southern plains with some activity reported in the north on a limited basis. Nebraska feedlots sold a few thousand head of fed cattle yesterday afternoon for $1.40-$1.44 dressed. Iowa feedlots sold close to 12,000 head of fed cattle for $1.40-$1.44 dressed as well. The southern feeding states didn’t report any transactions with packer bids of $92-$92.50 going unmatched against offering prices of $95-$96. We should see a more active trade begin to develop this morning as short bought packers move closer to producer offering prices. The futures should see a little rebound from yesterdays sell off and the beef market still feels to be in pretty good shape, so I will continue to call for a $94-$95 live and $1.44-$1.46 dressed trade by the end of the day. Looking out into next week, we should be able to hold the fed cattle market together as beef demand looks to have picked up slightly and fed cattle numbers will remain manageable. Feeder cattle markets remain supported despite yesterdays sell off in the futures. Slaughter cow markets are still lower and this should be the trend gong into next week, higher feeders and lower cows.
Cash Beef Situation and Outlook:
Yesterdays kill was estimated at 125,000 head, which would be 3,000 head below last week and 6,000 head below the same day a year ago. The week-to-date kill stands at 483,000 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 $1.39 higher to settle at $149.03 and the select cutout closing $1.02 higher to settle at $141.34. Sales volume was light with 275 loads of beef sold (110.10 loads of choice fab cuts, 97.30 loads of select fab cuts, 12.78 loads of trim, and 54.77 loads of grinds). The choice/select spread settled at $7.69 a gain of $.37.
The beef market was higher again yesterday on continued strength in the middle meats complex of the beef carcass. Sharp gains were once again posted in ribeyes and peeled tenderloins yesterday, which helped lift choice cutout values back to the $1.49 level. There was also active buying interest in chuck rolls, most round items, strip loins, and tenderloin butts. Most coarse ground and boneless beef markets were higher yesterday as demand from retail interests has picked up on those items. We should continue to see further strength in the beef market going into early next week.
Futures Market Situation and Outlook:
December live cattle settled at $93.30 a loss of $.97, February live cattle settled at $93.12 a loss of $1.32, and April live cattle settled at $93.95 a loss of $1.60. In the feeder cattle pit, November feeder cattle settled at $98.87 a loss of $1.77, January feeder cattle settled at $98.87 a loss of $1.80, and the March feeder cattle settled at $99.02 a loss of $2.15. The reported CME feeder cattle index for 11/5/08 was $96.59 a gain of $.26.
Yesterdays live cattle volume saw 26,368 contracts trade in the pit and 10,882 contracts trade on Globex. Live cattle open interest declined 645 contracts to come in this morning at 218,493. Yesterday’s feeder cattle volume saw 2,228 contracts trade in the pit and 537 contracts trade on Globex. Feeder cattle open interest gained 3 contracts to come in this morning at 18,760.
Yesterday’s price action in the cattle futures was entirely dictated by the steep losses in the stock market following the historic Presidential election of 2008. Fundamentals of the cattle and beef markets would suggest that there is some further upside in the futures and I still think we could see $96-$97 in front month fat cattle futures and $102-$103 in the feeder cattle futures by the end of the month. If these price targets are achieved we will want to get a little more serious about getting some risk management done on expected late December and first quarter 2009 cattle marketing’s. Keeping December live cattle above $91 and January feeder cattle above $96.50 by the close of trading today keeps the market looking positive into the first half of next week. So far this morning, outside commodity and stock markets are acting more stabile, which should help promote a higher cattle futures market for today. 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.
Thursday, November 6, 2008
November 6, 2008
Good Morning from the Chicago Board of Trade,
Cash Cattle Situation and Outlook:
The cash fed cattle market was at a standstill yesterday with packer bids of $92.50/$1.41-$1.42 going unmatched against feedlot offering prices of $95 live and $1.50 dressed. Trade could start to get a little more active today as packers in the south may be getting a little short on inventory. While the stock markets performance yesterday may be a little concerning, I still feel that with fed cattle numbers remaining relatively snug and a better demand tone out of the beef market that fed cattle prices should be supported for this week. I don’t know if we can have a very big rally in the cash fed cattle market, but I do think we can still trade some mid-$90’s fat cattle by the end of the month. I will continue to look for a cash feedlot trade that takes place at $93-$94 live and $1.44-$1.46 dressed. Fat cattle selling in the auction markets remain firm this week, with Sioux Falls, SD calling their market $4 higher at $86-$88.50 on the beef cattle and $80-$81 on the Holsteins. Slaughter cows were being marked $3-$4 lower with the cutters and boners bringing $39-$49 and the breakers and whites bringing $50-$53. Feeder cattle markets are still on solid footing for this week with yearling cattle being called $2-$4 higher and calves being called $4-$5 higher. Depending on where you are in the country, most 4 weight calves in the northern plains bring $110-$130, 5 weight calves bring $103-$118, 6 weight calves bring $96-$106, 7 weight steers bring $96-$101, 8 weight steers bring $94-$98, and 9-10 weight steers bring $85-$94. Demand for feeder cattle remains strong and should stay that way into next week.
Cash Beef Situation and Outlook:
Yesterdays kill was estimated at 122,000 head, which would be 12,000 head above last week and 4,000 head below the same day a year ago. The week-to-date kill now stands at 358,000 head, which would be 7,000 head below the same period a week ago, with the industry looking for a 635,000 head production week. The boxed beef market was higher yesterday with the choice cutout closing $2.93 higher to settle at $147.64 and the select cutout closing $2.47 higher to settle at $140.32. Sales volume was good with 466 loads of beef sold (166.10 loads of choice fab cuts, 142.20 loads of select fab cuts, 60.20 loads of trim, 97.98 loads of grinds). The choice/select spread settled at $7.31 a gain of $.46.
The beef market continued to move higher yesterday on strong movement of over 400 loads of beef sold. Sharply higher pricing was noted on choice rib cuts yesterday, which has been the main driving force behind the higher cutout values as of late. Along with the higher rib prices were decent gains in end meats, especially round cuts as retailers step up to the plate and take on inventory at higher money into the end of the month. Loin prices were also higher yesterday along with a few chuck items, however not to the extent of ribs and loins. Boneless beef markets were mixed again with higher fed cattle 50’s and lower 90’s. Attitudes within the beef market have changed and buyers are more optimistic towards out front demand and with many beef items at or below year ago price levels, they are now willing to take on some extra product. Packers report being able to sell certain cuts out into the end of November at higher money then where they are at today. I will look for firm beef prices into next week. Export sales for the week of October 24-30, 2008 are as follows:
Beef: Net sales of 4,700 MT were primarily for Mexico (2,300 MT), Canada (900 MT), Vietnam (700 MT), and Japan (400 MT). Net Sales of 200 MT for delivery in 2009 were for Canada (100 MT) and Taiwan (100 MT). Exports of 20,700 MT were mainly to Mexico (10,400 MT), South Korea (5,400 MT), Japan (2,200 MT), Canada (1,000 MT), Vietnam (600 MT), and Hong Kong (400 MT).
Futures Market Situation and Outlook:
December live cattle settled at $94.27 a gain of $.42, February live cattle settled at $94.45 a loss of $.52, and the April live cattle settled at $95.55 a loss of $.45. In the feeder cattle pit, November feeder cattle settled at $100.65 a gain of $.15, January feeder cattle settled at $100.77 a gain of $.47, and the March feeder cattle settled at $101.17 a gain of $.67. The reported CME feeder cattle index for 11/4/08 was $96.33 a gain of $.14.
Live and feeder cattle futures came under pressure early yesterday on some profit taking and spec selling, however many contracts were able to close $.50 off their lows, and in the case of the feeder cattle, $1.00-$1.70 off their lows. Feeders were propelled higher late in the session on fund buying and sharply lower corn markets and put in another strong performance. Feeder cattle are fast approaching overhead price targets of $102-$103, and I would assume that they would slow their rate of ascent once they get there. Fed cattle didn’t act all that great yesterday when compared to the feeders. December was the strongest contract month all day on cash strength and active bull spreading with February. I believe part of the weakness in the fat cattle futures yesterday was probably linked to the post election day plunge in the Dow Jones. I still think $96-$97 is attainable for Dec, Feb, and April live cattle futures, however all three contracts will need to hold above $91, $92, and $93 respectively by the close on Friday. Option trading was rather quiet yesterday with no real features to speak of. Option volatility did come down a little yesterday with Dec atm straddles now trading at 19.75%, Feb atm straddles at 21%, and April atm straddles at 19.80%. The last 40 loads of October live cattle open interest were delivered last night in Norfolk, NE. Vision Financial delivered 3, MF Global delivered 6, Cadent delivered 17, RJO delivered 6, and ADM delivered 8. Newedge USA received them all. Dow futures as of 8:00 am are down about 100 points, which has Globex futures trading $.20-$.60 lower in the fat cattle and $.55 lower in the feeders. I would look for a $.20-$.30 lower open across the board to live and feeder cattle futures, with some recovery coming into the market by the close. Trade Well!!!
Any one wanting a more detailed report on the cattle and beef markets including fundamental, chart and technical analysis, plus spec/hedge recommendations for packers, processors, producers, and meat buyers feel free to contact me by phone or e-mail to set up a free trial.
There is risk in trading futures and options.
Have a Good Day,
Troy Vetterkind
Vetterkind Cattle Brokerage, LLC
Chicago Board of Trade
141 West Jackson Blvd.
Suite 1220A
Chicago, IL 60604
1-888-299-1477 Toll Free
1-312-896-2068 Direct
1-708-224-5985 Mobile
tvetterkind@linngroup.com
Reproduction or rebroadcast of any portion of this information is strictly prohibited without the written permission of the Linn Group, Inc. the information reflected herein is derived from sources believed to be reliable; however, this information is not guaranteed as to its accuracy or completeness. Opinions expressed are subject to change without notice. This material and any view expressed herein are provided for informational purposes only and should not be construed in any way as an inducement to buy or sell commodity futures or options contracts. The Linn Group and its officers, directors, employees and affiliates may take positions for their own accounts in contracts referred to herein. Trading futures involves risk of loss. Past performance is not indicative of future results.
Good Morning from the Chicago Board of Trade,
Cash Cattle Situation and Outlook:
The cash fed cattle market was at a standstill yesterday with packer bids of $92.50/$1.41-$1.42 going unmatched against feedlot offering prices of $95 live and $1.50 dressed. Trade could start to get a little more active today as packers in the south may be getting a little short on inventory. While the stock markets performance yesterday may be a little concerning, I still feel that with fed cattle numbers remaining relatively snug and a better demand tone out of the beef market that fed cattle prices should be supported for this week. I don’t know if we can have a very big rally in the cash fed cattle market, but I do think we can still trade some mid-$90’s fat cattle by the end of the month. I will continue to look for a cash feedlot trade that takes place at $93-$94 live and $1.44-$1.46 dressed. Fat cattle selling in the auction markets remain firm this week, with Sioux Falls, SD calling their market $4 higher at $86-$88.50 on the beef cattle and $80-$81 on the Holsteins. Slaughter cows were being marked $3-$4 lower with the cutters and boners bringing $39-$49 and the breakers and whites bringing $50-$53. Feeder cattle markets are still on solid footing for this week with yearling cattle being called $2-$4 higher and calves being called $4-$5 higher. Depending on where you are in the country, most 4 weight calves in the northern plains bring $110-$130, 5 weight calves bring $103-$118, 6 weight calves bring $96-$106, 7 weight steers bring $96-$101, 8 weight steers bring $94-$98, and 9-10 weight steers bring $85-$94. Demand for feeder cattle remains strong and should stay that way into next week.
Cash Beef Situation and Outlook:
Yesterdays kill was estimated at 122,000 head, which would be 12,000 head above last week and 4,000 head below the same day a year ago. The week-to-date kill now stands at 358,000 head, which would be 7,000 head below the same period a week ago, with the industry looking for a 635,000 head production week. The boxed beef market was higher yesterday with the choice cutout closing $2.93 higher to settle at $147.64 and the select cutout closing $2.47 higher to settle at $140.32. Sales volume was good with 466 loads of beef sold (166.10 loads of choice fab cuts, 142.20 loads of select fab cuts, 60.20 loads of trim, 97.98 loads of grinds). The choice/select spread settled at $7.31 a gain of $.46.
The beef market continued to move higher yesterday on strong movement of over 400 loads of beef sold. Sharply higher pricing was noted on choice rib cuts yesterday, which has been the main driving force behind the higher cutout values as of late. Along with the higher rib prices were decent gains in end meats, especially round cuts as retailers step up to the plate and take on inventory at higher money into the end of the month. Loin prices were also higher yesterday along with a few chuck items, however not to the extent of ribs and loins. Boneless beef markets were mixed again with higher fed cattle 50’s and lower 90’s. Attitudes within the beef market have changed and buyers are more optimistic towards out front demand and with many beef items at or below year ago price levels, they are now willing to take on some extra product. Packers report being able to sell certain cuts out into the end of November at higher money then where they are at today. I will look for firm beef prices into next week. Export sales for the week of October 24-30, 2008 are as follows:
Beef: Net sales of 4,700 MT were primarily for Mexico (2,300 MT), Canada (900 MT), Vietnam (700 MT), and Japan (400 MT). Net Sales of 200 MT for delivery in 2009 were for Canada (100 MT) and Taiwan (100 MT). Exports of 20,700 MT were mainly to Mexico (10,400 MT), South Korea (5,400 MT), Japan (2,200 MT), Canada (1,000 MT), Vietnam (600 MT), and Hong Kong (400 MT).
Futures Market Situation and Outlook:
December live cattle settled at $94.27 a gain of $.42, February live cattle settled at $94.45 a loss of $.52, and the April live cattle settled at $95.55 a loss of $.45. In the feeder cattle pit, November feeder cattle settled at $100.65 a gain of $.15, January feeder cattle settled at $100.77 a gain of $.47, and the March feeder cattle settled at $101.17 a gain of $.67. The reported CME feeder cattle index for 11/4/08 was $96.33 a gain of $.14.
Live and feeder cattle futures came under pressure early yesterday on some profit taking and spec selling, however many contracts were able to close $.50 off their lows, and in the case of the feeder cattle, $1.00-$1.70 off their lows. Feeders were propelled higher late in the session on fund buying and sharply lower corn markets and put in another strong performance. Feeder cattle are fast approaching overhead price targets of $102-$103, and I would assume that they would slow their rate of ascent once they get there. Fed cattle didn’t act all that great yesterday when compared to the feeders. December was the strongest contract month all day on cash strength and active bull spreading with February. I believe part of the weakness in the fat cattle futures yesterday was probably linked to the post election day plunge in the Dow Jones. I still think $96-$97 is attainable for Dec, Feb, and April live cattle futures, however all three contracts will need to hold above $91, $92, and $93 respectively by the close on Friday. Option trading was rather quiet yesterday with no real features to speak of. Option volatility did come down a little yesterday with Dec atm straddles now trading at 19.75%, Feb atm straddles at 21%, and April atm straddles at 19.80%. The last 40 loads of October live cattle open interest were delivered last night in Norfolk, NE. Vision Financial delivered 3, MF Global delivered 6, Cadent delivered 17, RJO delivered 6, and ADM delivered 8. Newedge USA received them all. Dow futures as of 8:00 am are down about 100 points, which has Globex futures trading $.20-$.60 lower in the fat cattle and $.55 lower in the feeders. I would look for a $.20-$.30 lower open across the board to live and feeder cattle futures, with some recovery coming into the market by the close. Trade Well!!!
Any one wanting a more detailed report on the cattle and beef markets including fundamental, chart and technical analysis, plus spec/hedge recommendations for packers, processors, producers, and meat buyers feel free to contact me by phone or e-mail to set up a free trial.
There is risk in trading futures and options.
Have a Good Day,
Troy Vetterkind
Vetterkind Cattle Brokerage, LLC
Chicago Board of Trade
141 West Jackson Blvd.
Suite 1220A
Chicago, IL 60604
1-888-299-1477 Toll Free
1-312-896-2068 Direct
1-708-224-5985 Mobile
tvetterkind@linngroup.com
Reproduction or rebroadcast of any portion of this information is strictly prohibited without the written permission of the Linn Group, Inc. the information reflected herein is derived from sources believed to be reliable; however, this information is not guaranteed as to its accuracy or completeness. Opinions expressed are subject to change without notice. This material and any view expressed herein are provided for informational purposes only and should not be construed in any way as an inducement to buy or sell commodity futures or options contracts. The Linn Group and its officers, directors, employees and affiliates may take positions for their own accounts in contracts referred to herein. Trading futures involves risk of loss. Past performance is not indicative of future results.
Wednesday, November 5, 2008
November 5, 2008
Good Morning from the Chicago Board of Trade,
Cash Cattle Situation and Outlook:
The cash fed cattle market was quiet yesterday, with trade limited to that of cattle selling through the sale barns, which by the way are bringing higher money. Packer bids were few and far between with most feedlot offering prices starting at $95/$1.50. A late week trade is expected for this week and with the positive action in the beef market and on the board I don’t see any reason right now why we can’t trade cattle at higher money. Barring any kind of stock market or futures meltdown, I would think feedlot cattle could be worth $93-$94 live and $1.44-$1.46 dressed by Friday. Most all classes of feeder cattle are trading at higher money this week and that too should continue for the balance of the week. Attitudes have changed a little bit in the feeder cattle market, as not only are yearling numbers getting tight, which supports prices in that arena, but many of these calves coming to town are penciling a breakeven as either a yearling this spring or a fat early this summer. Look for a better tone to the cash fed cattle and feeder cattle markets for the balance of the week. Slaughter cows remain a little defensive coming into midweek as numbers abound and packers have some boneless to sell. This should remain the case for another couple of weeks, and if producers have the feed, it might not hurt to hold onto cows until after the first of the year when the market should be a little higher.
Cash Beef Situation and Outlook:
Yesterdays kill was estimated at 121,000 head, which would be 6,000 head below last week and 12,000 head below the same day a year ago. The week-to-date kill now stands at 236,000 head, which would be 19,000 head below the same period last week, with the industry looking for a 635,000 head production week. The boxed beef market was higher yesterday with the choice cutout closing $1.97 higher to settle at $144.71 and the select cutout closing $.93 higher to settle at $137.85. Sales volume was light with 266 loads of beef sold (101.51 loads of choice fab cuts, 90.53 loads of select fab cuts, 15.04 loads of trim, 58.90 loads of grinds). The choice/select spread settled at $6.86 a gain of $1.04.
The boxed beef market was higher yesterday led that way by active interest in procuring choice and select middle meats ahead of the holidays. As we have been mentioning for the last couple of days, many beef cuts throughout the rib and loin are trading at or below year ago price levels and that many of these cuts are offering value. Many on the buy side of the market are now realizing this and have stepped in to procure some of their needs. End meats, clods and inside rounds in particular, have also benefited the last couple of days from this way of thinking and higher prices were printed on these items as well yesterday. Coarse ground beef sales were higher on active interest from retail. Boneless markets remain mixed with higher prices on the 50’s due to reduced fed cattle slaughters and lower prices on the 90’s due to higher cow slaughters. We will continue to look for a higher trend to choice and select boxed beef and cutout values for the balance of the week.
Futures Market Situation and Outlook:
December live cattle settled at $93.85 a gain of $.52, February live cattle settled at $94.97 a gain of $.82, and the April live cattle settled at $96.00 a gain of $.85. In the feeder cattle pit, November feeder cattle settled at $100.50 a gain of $.80, January feeder cattle settled at $100.30 a gain of $1.12, and the March feeder cattle settled at $100.50 a gain of $1.07. The reported CME feeder cattle index for 11/3/08 was $96.19 a gain of $.45.
Yesterdays live cattle volume saw 26,986 contracts trade in the pit and 11,987 contracts trade on Globex. Live cattle open interest gained 1,337 contracts to come in this morning at 216,468. Yesterday’s feeder cattle volume saw 2,671 contracts trade in the pit and 781 contracts trade on Globex. Feeder cattle open interest gained 179 contracts to come in this morning at 19,266.
Live and feeder cattle futures settled with solid gains yesterday on renewed fund buying and the futures attempting to price higher cash fed cattle and feeder cattle market’s for this week and next. Overnight news is pretty quiet with no major moves in any of the outside markets. Deliveries against the October live cattle settlement continued last night with a total of 92 loads posted in Norfolk, NE. MF Global delivered 8 loads, Cadent delivered 18 loads, RJO delivered 29 loads, Rosenthal delivered 24 loads, and ADM delivered 13 loads. Newedge USA received all loads. Option trading was active again in the February puts, with the biggest feature being the selling of the $94 straddle and buying the $86 puts for protection. Options volatility came down to 20.5% in the Dec atm straddles, 21.5% in the Feb atm straddles, and increased to 20.5% in the April atm straddles. The futures market feels pretty good and it appears as though Dec, Feb, and April live cattle want to go fill gaps left on daily price charts at $97-$98. Feeders had a positive close yesterday as well getting back over the $100 mark. Holding above this price level by the end of the week keeps $102-$103 in the cards. The market looks like it could start a little lower this morning, and I would be interested in buying both fats and feeders on a $.50 lower type trade, keeping the above mentioned price targets in mind. Look for a $.10-$.20 lower open to cattle futures trading this morning. Trade Well!!!
Any one wanting a more detailed report on the cattle and beef markets including fundamental, chart and technical analysis, plus spec/hedge recommendations for packers, processors, producers, and meat buyers feel free to contact me by phone or e-mail to set up a free trial.
There is risk in trading futures and options.
Have a Good Day,
Troy Vetterkind
Vetterkind Cattle Brokerage, LLC
Chicago Board of Trade
141 West Jackson Blvd.
Suite 1220A
Chicago, IL 60604
1-888-299-1477 Toll Free
1-312-896-2068 Direct
1-708-224-5985 Mobile
tvetterkind@linngroup.com
Reproduction or rebroadcast of any portion of this information is strictly prohibited without the written permission of the Linn Group, Inc. the information reflected herein is derived from sources believed to be reliable; however, this information is not guaranteed as to its accuracy or completeness. Opinions expressed are subject to change without notice. This material and any view expressed herein are provided for informational purposes only and should not be construed in any way as an inducement to buy or sell commodity futures or options contracts. The Linn Group and its officers, directors, employees and affiliates may take positions for their own accounts in contracts referred to herein. Trading futures involves risk of loss. Past performance is not indicative of future results.
Good Morning from the Chicago Board of Trade,
Cash Cattle Situation and Outlook:
The cash fed cattle market was quiet yesterday, with trade limited to that of cattle selling through the sale barns, which by the way are bringing higher money. Packer bids were few and far between with most feedlot offering prices starting at $95/$1.50. A late week trade is expected for this week and with the positive action in the beef market and on the board I don’t see any reason right now why we can’t trade cattle at higher money. Barring any kind of stock market or futures meltdown, I would think feedlot cattle could be worth $93-$94 live and $1.44-$1.46 dressed by Friday. Most all classes of feeder cattle are trading at higher money this week and that too should continue for the balance of the week. Attitudes have changed a little bit in the feeder cattle market, as not only are yearling numbers getting tight, which supports prices in that arena, but many of these calves coming to town are penciling a breakeven as either a yearling this spring or a fat early this summer. Look for a better tone to the cash fed cattle and feeder cattle markets for the balance of the week. Slaughter cows remain a little defensive coming into midweek as numbers abound and packers have some boneless to sell. This should remain the case for another couple of weeks, and if producers have the feed, it might not hurt to hold onto cows until after the first of the year when the market should be a little higher.
Cash Beef Situation and Outlook:
Yesterdays kill was estimated at 121,000 head, which would be 6,000 head below last week and 12,000 head below the same day a year ago. The week-to-date kill now stands at 236,000 head, which would be 19,000 head below the same period last week, with the industry looking for a 635,000 head production week. The boxed beef market was higher yesterday with the choice cutout closing $1.97 higher to settle at $144.71 and the select cutout closing $.93 higher to settle at $137.85. Sales volume was light with 266 loads of beef sold (101.51 loads of choice fab cuts, 90.53 loads of select fab cuts, 15.04 loads of trim, 58.90 loads of grinds). The choice/select spread settled at $6.86 a gain of $1.04.
The boxed beef market was higher yesterday led that way by active interest in procuring choice and select middle meats ahead of the holidays. As we have been mentioning for the last couple of days, many beef cuts throughout the rib and loin are trading at or below year ago price levels and that many of these cuts are offering value. Many on the buy side of the market are now realizing this and have stepped in to procure some of their needs. End meats, clods and inside rounds in particular, have also benefited the last couple of days from this way of thinking and higher prices were printed on these items as well yesterday. Coarse ground beef sales were higher on active interest from retail. Boneless markets remain mixed with higher prices on the 50’s due to reduced fed cattle slaughters and lower prices on the 90’s due to higher cow slaughters. We will continue to look for a higher trend to choice and select boxed beef and cutout values for the balance of the week.
Futures Market Situation and Outlook:
December live cattle settled at $93.85 a gain of $.52, February live cattle settled at $94.97 a gain of $.82, and the April live cattle settled at $96.00 a gain of $.85. In the feeder cattle pit, November feeder cattle settled at $100.50 a gain of $.80, January feeder cattle settled at $100.30 a gain of $1.12, and the March feeder cattle settled at $100.50 a gain of $1.07. The reported CME feeder cattle index for 11/3/08 was $96.19 a gain of $.45.
Yesterdays live cattle volume saw 26,986 contracts trade in the pit and 11,987 contracts trade on Globex. Live cattle open interest gained 1,337 contracts to come in this morning at 216,468. Yesterday’s feeder cattle volume saw 2,671 contracts trade in the pit and 781 contracts trade on Globex. Feeder cattle open interest gained 179 contracts to come in this morning at 19,266.
Live and feeder cattle futures settled with solid gains yesterday on renewed fund buying and the futures attempting to price higher cash fed cattle and feeder cattle market’s for this week and next. Overnight news is pretty quiet with no major moves in any of the outside markets. Deliveries against the October live cattle settlement continued last night with a total of 92 loads posted in Norfolk, NE. MF Global delivered 8 loads, Cadent delivered 18 loads, RJO delivered 29 loads, Rosenthal delivered 24 loads, and ADM delivered 13 loads. Newedge USA received all loads. Option trading was active again in the February puts, with the biggest feature being the selling of the $94 straddle and buying the $86 puts for protection. Options volatility came down to 20.5% in the Dec atm straddles, 21.5% in the Feb atm straddles, and increased to 20.5% in the April atm straddles. The futures market feels pretty good and it appears as though Dec, Feb, and April live cattle want to go fill gaps left on daily price charts at $97-$98. Feeders had a positive close yesterday as well getting back over the $100 mark. Holding above this price level by the end of the week keeps $102-$103 in the cards. The market looks like it could start a little lower this morning, and I would be interested in buying both fats and feeders on a $.50 lower type trade, keeping the above mentioned price targets in mind. Look for a $.10-$.20 lower open to cattle futures trading this morning. Trade Well!!!
Any one wanting a more detailed report on the cattle and beef markets including fundamental, chart and technical analysis, plus spec/hedge recommendations for packers, processors, producers, and meat buyers feel free to contact me by phone or e-mail to set up a free trial.
There is risk in trading futures and options.
Have a Good Day,
Troy Vetterkind
Vetterkind Cattle Brokerage, LLC
Chicago Board of Trade
141 West Jackson Blvd.
Suite 1220A
Chicago, IL 60604
1-888-299-1477 Toll Free
1-312-896-2068 Direct
1-708-224-5985 Mobile
tvetterkind@linngroup.com
Reproduction or rebroadcast of any portion of this information is strictly prohibited without the written permission of the Linn Group, Inc. the information reflected herein is derived from sources believed to be reliable; however, this information is not guaranteed as to its accuracy or completeness. Opinions expressed are subject to change without notice. This material and any view expressed herein are provided for informational purposes only and should not be construed in any way as an inducement to buy or sell commodity futures or options contracts. The Linn Group and its officers, directors, employees and affiliates may take positions for their own accounts in contracts referred to herein. Trading futures involves risk of loss. Past performance is not indicative of future results.
Tuesday, November 4, 2008
November 4, 2008
Good Morning from the Chicago Board of Trade,
Cash Cattle Situation and Outlook:
The cash fed cattle market was quiet yesterday as feedlots spent the day putting together this week’s showlist numbers, numbers that look to be a little larger in Nebraska and Texas and smaller in Kansas. A look at last weeks sales volume shows Texas/OK/NM feedlots selling 50,510 head of fed cattle (44,287 previous week) for $92-$93, Kansas feedlots selling 36,588 (27,831) head of fed cattle for $91-$92 live or $1.44 dressed, Nebraska feedlots selling 56,633 (62,665) for $88-$91 live or $1.37-$1.43 dressed, Colorado feedlots selling 7,582 (6,438) head of fed cattle for $92 live and $1.43 dressed, and Iowa/MN feedlots selling 30,926 (29,927) head of fed cattle for $86-$90 live and $1.37-$1.41 dressed. As we can see movement out of feedlots last week was pretty decent and that will help keep cattle numbers manageable for the next several weeks. Coming into this week packers margins are suffering a little bit, which has them talking about and acting on cutting this weeks cattle kill, as is evident by yesterday’s 115,000 head slaughter. However, to counteract some of this, beef buyers feel a little better about taking on some product at current price level and it is thought that we could see a rally in beef prices throughout this week and next, which will help packer margins. Because of reduced placements into feedlots from the last several months, fed cattle numbers are going to be at their tightest in the next 30 days. This along with a better beef market and a futures market that seems to have straightened out for the time being should be supportive to the cash market until the end of the month. We could perhaps see both the futures and the cash fed cattle market get back into the mid $90’s during this time frame. For this week though we will continue to look for a steady to $.50-$1 higher market by the end of the week, $93 in the south and $1.45 in the north.
As expected most all classes of cattle selling through the nations auction markets are trading higher to begin the week. Fed cattle are bringing $1-$2 better money with tops of $86-$87 noted on the beef fats and $81-$82 on the Holstein steers. Slaughter cows are under some pressure again early this week with the majority of lean cows bringing $40-$50. Feeder cattle sales are starting the week higher on all categories with Oklahoma City calling their market mostly $3-$4 higher on the yearling cattle and $5-$10 higher on the calves on an estimated run of 10,000 head. The bulk of the 4-6 weight steers in OKC yesterday were bringing $105-$130, the 6-8 weight steers were bringing $96-$106, and the 8-10 weight steers were bringing $90-$101. There were several drafts of 6-7 weight steer calves fresh off cows that brought $85-$95 in OKC as well. True yearling cattle are becoming hard to find both on the southern plains and northern plains and these cattle will be increasingly in demand for feedlot replacements coming into winter, which will be price supportive. Calf demand will remain active for placement on wheat in the southern plains as long as moisture prospects hold out. I would continue to look for a stronger tone to the cash feeder cattle market for the balance of this week into next.
Cash Beef Situation and Outlook:
Yesterdays kill was estimated at 115,000 head, which would be 13,000 head below last week and 7,000 head below the same day a year ago. The industry will be looking for another 635,000 head production week. The boxed beef market was higher yesterday with the choice cutout closing $.53 higher to settle at $142.74 and the select cutout closing $.60 higher to settle at $136.92. Sales volume was good with 303 loads of beef sold (100.59 loads of choice fab cuts, 119.64 loads of select fab cuts, 19.38 loads of trim, 63.38 loads of grinds). The choice/select spread settled at $5.81 a loss of $.07.
The beef market was higher yesterday as with decent buying noted in the rib and loin sections of the animal. Sharp gains were seen in choice, select, and no-roll rib roasts, ribeye’s, tenderloin butts, and peeled tenders. There was also some active interest from retail in procuring clods, chuck rolls, briskets, and outside rounds, all of which lent to higher overall cutout values yesterday. Ideas of reduced slaughter levels for the next couple of weeks along with many of the above mentioned cuts trading below year ago levels had buyers in the market covering a portion of their needs going into the end of the year. Coarse ground beef markets were also higher yesterday as retail features of ground beef continue. Boneless beef markets were mixed, with higher 50% trim values due to the lighter fed cattle kill last week and lower 90% lean cow beef values due to increased cow kills. Imported beef values were mostly unchanged as imported beef tries to compete with lower domestic cow beef markets. I would continue to look for a higher beef market as the week wears on, with the choice cutout trading back to the mid-$1.40’s and the select cutout trading back to the upper $1.30’s.
Futures Market Situation and Outlook:
December live cattle settled at $93.32 a gain of $.62, February live cattle settled at $94.15 a loss of $.10, and the April live cattle settled at $95.15 a gain of $.40. In the feeder cattle pit, November feeder cattle settled at $99.70 a gain of $1.07, January feeder cattle settled at $99.17 a gain of $1.12, and the March feeder cattle settled at $99.42 a gain of $.90. The reported CME feeder cattle index for 10/31/08 was $95.74 a loss of $.32.
Yesterday’s live cattle volume saw 24,454 contracts trade in the pit and 13,195 contracts trade on Globex. Live cattle open interest gained 1,908 contracts to come in this morning at 215,141. Yesterday’s feeder cattle volume saw 2,476 contracts trade in the pit and 608 contracts trade on Globex. Feeder cattle open interest declined 996 contracts to come in this morning at 19,082.
Live and feeder cattle futures settled mostly higher yesterday with triple digit gains being posted in the feeder cattle on first of the month fund buying, short covering, and strengthening cash cattle markets. Options trading was active in the February live cattle calls yesterday with several thousand contracts each of the Feb $94, $95, and $100 calls trading, which was thought to be a couple of big fund accounts selling the calls. These same accounts were said to be buying Feb futures to hedge themselves, however outright bull spreading in Dec/Feb in the futures pit outweighed that buying. Option volatility did come down to 22% in the at the money Dec and Feb straddles and 20% in the April straddles. Futures feel pretty good here and as long as the equity markets remain stabile. Holding December live cattle above $90 by the end of the week and November feeder cattle above $96 by the end of the week keeps a positive spin on the market going into next week. Upside targets in Dec live cattle are $96-$97 and if we can get November feeder cattle above $100, $102-$103 is in the cards. For today Dec live cattle will find support at $92 and November feeder cattle will find support at $98.50-$99. Resistance will be found at $94.50 in Dec live and $100.50 in Nov feeders. Look for a $.10-$.20 higher open to live and feeder cattle futures this morning. Trade Well!!!
Any one wanting a more detailed report on the cattle and beef markets including fundamental, chart and technical analysis, plus spec/hedge recommendations for packers, processors, producers, and meat buyers feel free to contact me by phone or e-mail to set up a free trial.
There is risk in trading futures and options.
Have a Good Day,
Troy Vetterkind
Vetterkind Cattle Brokerage, LLC
Chicago Board of Trade
141 West Jackson Blvd.
Suite 1220A
Chicago, IL 60604
1-888-299-1477 Toll Free
1-312-896-2068 Direct
1-708-224-5985 Mobile
tvetterkind@linngroup.com
Reproduction or rebroadcast of any portion of this information is strictly prohibited without the written permission of the Linn Group, Inc. the information reflected herein is derived from sources believed to be reliable; however, this information is not guaranteed as to its accuracy or completeness. Opinions expressed are subject to change without notice. This material and any view expressed herein are provided for informational purposes only and should not be construed in any way as an inducement to buy or sell commodity futures or options contracts. The Linn Group and its officers, directors, employees and affiliates may take positions for their own accounts in contracts referred to herein. Trading futures involves risk of loss. Past performance is not indicative of future results.
Good Morning from the Chicago Board of Trade,
Cash Cattle Situation and Outlook:
The cash fed cattle market was quiet yesterday as feedlots spent the day putting together this week’s showlist numbers, numbers that look to be a little larger in Nebraska and Texas and smaller in Kansas. A look at last weeks sales volume shows Texas/OK/NM feedlots selling 50,510 head of fed cattle (44,287 previous week) for $92-$93, Kansas feedlots selling 36,588 (27,831) head of fed cattle for $91-$92 live or $1.44 dressed, Nebraska feedlots selling 56,633 (62,665) for $88-$91 live or $1.37-$1.43 dressed, Colorado feedlots selling 7,582 (6,438) head of fed cattle for $92 live and $1.43 dressed, and Iowa/MN feedlots selling 30,926 (29,927) head of fed cattle for $86-$90 live and $1.37-$1.41 dressed. As we can see movement out of feedlots last week was pretty decent and that will help keep cattle numbers manageable for the next several weeks. Coming into this week packers margins are suffering a little bit, which has them talking about and acting on cutting this weeks cattle kill, as is evident by yesterday’s 115,000 head slaughter. However, to counteract some of this, beef buyers feel a little better about taking on some product at current price level and it is thought that we could see a rally in beef prices throughout this week and next, which will help packer margins. Because of reduced placements into feedlots from the last several months, fed cattle numbers are going to be at their tightest in the next 30 days. This along with a better beef market and a futures market that seems to have straightened out for the time being should be supportive to the cash market until the end of the month. We could perhaps see both the futures and the cash fed cattle market get back into the mid $90’s during this time frame. For this week though we will continue to look for a steady to $.50-$1 higher market by the end of the week, $93 in the south and $1.45 in the north.
As expected most all classes of cattle selling through the nations auction markets are trading higher to begin the week. Fed cattle are bringing $1-$2 better money with tops of $86-$87 noted on the beef fats and $81-$82 on the Holstein steers. Slaughter cows are under some pressure again early this week with the majority of lean cows bringing $40-$50. Feeder cattle sales are starting the week higher on all categories with Oklahoma City calling their market mostly $3-$4 higher on the yearling cattle and $5-$10 higher on the calves on an estimated run of 10,000 head. The bulk of the 4-6 weight steers in OKC yesterday were bringing $105-$130, the 6-8 weight steers were bringing $96-$106, and the 8-10 weight steers were bringing $90-$101. There were several drafts of 6-7 weight steer calves fresh off cows that brought $85-$95 in OKC as well. True yearling cattle are becoming hard to find both on the southern plains and northern plains and these cattle will be increasingly in demand for feedlot replacements coming into winter, which will be price supportive. Calf demand will remain active for placement on wheat in the southern plains as long as moisture prospects hold out. I would continue to look for a stronger tone to the cash feeder cattle market for the balance of this week into next.
Cash Beef Situation and Outlook:
Yesterdays kill was estimated at 115,000 head, which would be 13,000 head below last week and 7,000 head below the same day a year ago. The industry will be looking for another 635,000 head production week. The boxed beef market was higher yesterday with the choice cutout closing $.53 higher to settle at $142.74 and the select cutout closing $.60 higher to settle at $136.92. Sales volume was good with 303 loads of beef sold (100.59 loads of choice fab cuts, 119.64 loads of select fab cuts, 19.38 loads of trim, 63.38 loads of grinds). The choice/select spread settled at $5.81 a loss of $.07.
The beef market was higher yesterday as with decent buying noted in the rib and loin sections of the animal. Sharp gains were seen in choice, select, and no-roll rib roasts, ribeye’s, tenderloin butts, and peeled tenders. There was also some active interest from retail in procuring clods, chuck rolls, briskets, and outside rounds, all of which lent to higher overall cutout values yesterday. Ideas of reduced slaughter levels for the next couple of weeks along with many of the above mentioned cuts trading below year ago levels had buyers in the market covering a portion of their needs going into the end of the year. Coarse ground beef markets were also higher yesterday as retail features of ground beef continue. Boneless beef markets were mixed, with higher 50% trim values due to the lighter fed cattle kill last week and lower 90% lean cow beef values due to increased cow kills. Imported beef values were mostly unchanged as imported beef tries to compete with lower domestic cow beef markets. I would continue to look for a higher beef market as the week wears on, with the choice cutout trading back to the mid-$1.40’s and the select cutout trading back to the upper $1.30’s.
Futures Market Situation and Outlook:
December live cattle settled at $93.32 a gain of $.62, February live cattle settled at $94.15 a loss of $.10, and the April live cattle settled at $95.15 a gain of $.40. In the feeder cattle pit, November feeder cattle settled at $99.70 a gain of $1.07, January feeder cattle settled at $99.17 a gain of $1.12, and the March feeder cattle settled at $99.42 a gain of $.90. The reported CME feeder cattle index for 10/31/08 was $95.74 a loss of $.32.
Yesterday’s live cattle volume saw 24,454 contracts trade in the pit and 13,195 contracts trade on Globex. Live cattle open interest gained 1,908 contracts to come in this morning at 215,141. Yesterday’s feeder cattle volume saw 2,476 contracts trade in the pit and 608 contracts trade on Globex. Feeder cattle open interest declined 996 contracts to come in this morning at 19,082.
Live and feeder cattle futures settled mostly higher yesterday with triple digit gains being posted in the feeder cattle on first of the month fund buying, short covering, and strengthening cash cattle markets. Options trading was active in the February live cattle calls yesterday with several thousand contracts each of the Feb $94, $95, and $100 calls trading, which was thought to be a couple of big fund accounts selling the calls. These same accounts were said to be buying Feb futures to hedge themselves, however outright bull spreading in Dec/Feb in the futures pit outweighed that buying. Option volatility did come down to 22% in the at the money Dec and Feb straddles and 20% in the April straddles. Futures feel pretty good here and as long as the equity markets remain stabile. Holding December live cattle above $90 by the end of the week and November feeder cattle above $96 by the end of the week keeps a positive spin on the market going into next week. Upside targets in Dec live cattle are $96-$97 and if we can get November feeder cattle above $100, $102-$103 is in the cards. For today Dec live cattle will find support at $92 and November feeder cattle will find support at $98.50-$99. Resistance will be found at $94.50 in Dec live and $100.50 in Nov feeders. 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.
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