December 31, 2008
Good Morning from the Chicago Board of Trade,
Cash Cattle Situation and Outlook:
The cash fed cattle market was untested again yesterday with only a few token packer bids of $83 going unmatched against feedlot offering prices of $88-$89 live and $1.38-$1.40 dressed. We could see a few short bought packers move bids closer to asking prices as soon as today, however it seems as though participants are going to try and hold out until Friday before trading any cattle. As mentioned earlier in the week, showlists are a little larger in the south as trade volume in that part of the country was rather light last week. But with that said, packers in that part of the country are also getting short on inventory and fed cattle numbers in that part of the country overall are by far burdensome. Packers will be buying for a full kill week next week and I still think there will be some meat business done after the first of the year, which leads me to believe they will want to own some cattle and at least keep the market steady. There will be a few more cattle ready for market in the north in the coming weeks, but the weather is forecast to get pretty nasty in that part of the country by the second week of January, which I think will be a supportive factor as well. For the balance of this week I will still call for a steady/$.50-$1 higher fed cattle trade. Fed cattle, slaughter cows, and feeder cattle selling through limited auction market schedules continue to bring mostly $1-$2 higher money and this should remain the case into early next week.
Cash Beef Situation and Outlook:
Yesterday’s cattle slaughter was estimated at 128,000 head, which would be 4,000 head above last week and 128,000 head above the same day a year ago. The week-to-date kill now stands at 253,000 head, which would be 5,000 head above the same period a week ago, with the industry looking for a 500,000 head production week. The boxed beef market was lower yesterday with the choice cutout closing $.75 lower to settle at $143.42 and the select cutout closing $.37 lower to settle at $135.40. Sales volume was good yesterday with 338 loads of beef sold (125.94 loads of choice fab cuts, 103.06 loads of select fab cuts, 52.25 loads of trim, 56.78 loads of grinds). The choice/select spread settled at $8.02 a loss of $.38.
The beef market was lower yesterday as packers continue to search for a clearing level on rib cuts and peeled tenderloins. Most cuts in the chuck and round primals were either trading slightly higher or holding steady. There was some strength noted in the short loins and strip loins yesterday along with top butts. Coarse ground beef markets found decent retail and wholesale buying interest again yesterday with higher prices being the end result. Boneless beef markets were quite a bit higher as well with most strength being linked to delivery dates immediately after the holidays. The beef should continue to find some support from active buying interest in end meats, ground beef, and boneless beef into the first of January.
Futures Market Situation and Outlook:
December live cattle settled at $85.87 a loss of $.10, February live cattle settled at $85.90 a loss of $.30, and the April live cattle settled at $89.40 a gain of $.05. In the feeder cattle pit, January feeder cattle settled at $93.97 a gain of $.52, March feeder cattle settled at $93.82 a gain of $.97, and the April feeder cattle settled at $94.75 a gain of $.87. The reported CME feeder cattle index for 12/29/08 was $90.45 a loss of $.85. Live cattle spreads: Dec/Feb settled at -$.02 a gain of $.20, Feb/April settled at -$3.50 a loss of $.35, and April/June settled at $3.42 a loss of $.02. Feeder cattle spreads: Jan/March settled at $.15 a loss of $.45, March/April settled at -$.92 a gain of $.10, and April/May settled at -$1.05 a gain of $.37.
Yesterdays live cattle volume saw 12,157 contracts trade in the pit and 7,174 contracts trade on Globex. Live cattle open interest gained 407 to come in this morning at 211,365. Yesterday’s feeder cattle volume saw 1,862 contracts trade in the pit and 661 contracts trade on Globex. Feeder cattle open interest gained 188 contracts to come in this morning at 20,379.
The live cattle futures were pretty choppy yesterday as the market opened higher as expected, broke early, rallied during midsession, and broke late into the close on profit taking. Feeders acted good all day long and managed to hold most of their gains going into the close and were being bid up on Globex after the pit closed. It was another low volume session yesterday, and this will likely be the case both today and Friday as many traders will be out due to the holiday. Keep in mind we will be open regular hours both today and Friday as well. There were no new deliveries against December live cattle and keep in mind here too that Dec will go off the board at noon today. Overnight the Mexican government cleared 5 more U.S. plants for import. Today will be the last trading day of the month and the year, so with the light volume we will need to be careful of exaggerated moves in either direction as both the bulls and bears try to keep their positions in line. I still think there is some upside in cattle futures and want to be a buyer on breaks. Feb and April cattle should be able to find some support at $85 and $88 respectively for the balance of this week. Resistance for both of these contracts will be found at last weeks highs of $88.50 in Feb and $91.00 in April. In the feeder cattle March will continue to find buyer support at $92 and resistance between $94-$94.60. We are right up against that resistance now so the market could drift lower; however I have been very impressed with the buying that has come in on the screen the last couple of days (feels like a fund or funds covering shorts) and would expect this buying to continue into the New Year. If March feeders can close above $94.70, I would expect them to run up to the $100 area, and this would drag fat cattle along with them. Look for a mixed open to live and feeder cattle futures this morning (i.e. $.10 higher to $.10 lower). Everyone Have a Happy New Year!!! 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, December 31, 2008
Tuesday, December 30, 2008
December 30, 2008
Good Morning from the Chicago Board of Trade,
Cash Cattle Situation and Outlook:
Yesterday’s cash fed cattle market was untested with the exception of cattle that sold through auction markets. Packers were not bidding anything yesterday with feedlots beginning the week priced at $88-$89 live and $1.38-$1.40 dressed. A look at last week’s feedlot movement shows Texas/OK/NM feedlots selling 23,793 head of fed cattle (32,540 previous week) for mostly $86 live. Kansas feedlots sold 36,927 head of fed cattle (20,828) for $85 live and $1.35-$1.35 ½ dressed. Nebraska feedlots sold 64,671 head of fed cattle (57,476) for $84-$85 live and $1.35 dressed. Colorado feedlots sold 8,665 head of fed cattle (4,614) for mostly $85 live and $1.34-$1.35 dressed. Iowa/MN feedlots sold 25,462 head of fed cattle (19,265) for mostly $83-$84 live and $1.34-$1.35 dressed. As we can see movement in the north was pretty good and they did a good job in cleaning up a larger showlist offering last week, however southern movement was a little light. As such, southern feedlots carried some cattle over into this week and showlists in that part of the country look to be about 20,000 head larger in Texas and 10,000 head larger in Kansas. I still think the fed cattle market can be a little higher this week despite the larger showlists as packers will be buying for a full kill week next week and beef sales aren’t all that bad right now. I also think beef sales will pick up into the first couple of weeks of January, which will keep packers in the market for fed cattle to process. When all is said and done this week I will look for a cash fed cattle market that trades $86-$87 in the south and $84-$86 live and $1.35-$1.38 dressed in the north. Sale barn runs are very light this week with many auctions shut down until after the first of the year. Cattle that are selling through auction are bringing higher money with last week through with fed beef steers bringing $82-$85 and fed Holsteins bringing $72-$76. Slaughter cows bringing mostly steady to higher money at $38-$47 on the thin cows and $48-$57 on the fat cows. Feeder cattle runs are too light to establish a trend, however a higher undertone is evident on the cattle that are selling.
Cash Beef Situation and Outlook:
Yesterday’s cattle slaughter was estimated at 125,000 head, which would be 1,000 head above last week and 21,000 head above the same day a year ago. The industry will be looking for a 500,000 head production week. The boxed beef market was mixed yesterday with the choice cutout closing $.29 lower to settle at $144.17 and the select cutout closing $1.17 higher to settle at $135.77. Sales volume was good for a Monday with 307 loads of beef sold (99.24 loads of choice fab cuts, 67.99 loads of select fab cuts, 47.76 loads of trim, 91.70 loads of grinds). The choice/select spread settled at $8.40 a loss of $1.46.
The beef market saw continued gains in chuck and round cuts yesterday with demand described as decent. Continued weakness was evident in the rib complex along with further discounts surfacing in tenderloin butts and peeled tenders. Coarse ground markets were higher with very good movement as retail buyers came back to the market to secure some inventory. Boneless beef markets were higher, especially cow 90’s on a lack of production. I am still going to look for a mostly sideways beef market into next week with some buyer demand coming back to the market early next month.
Futures Market Situation and Outlook:
December live cattle settled at $85.97 a gain of $.07, February live cattle settled at $86.20 a gain of $.10, and April live cattle settled at $89.35 a gain of $.50. In the feeder cattle pit, January feeder cattle settled at $93.45 a gain of $.62, March feeder cattle settled at $92.85 a gain of $1.10, and the April feeder cattle settled at $93.87 a gain of $1.17. The reported CME feeder cattle index for 12/26/08 was $91.30 a gain of $.99. Live cattle spreads: Dec/Feb settled at -$.22 a loss of $.02, Feb/April settled at -$3.15 a loss of $.40, and April/June settled at $3.45 a loss of $.47. Feeder cattle spreads: Jan/March settled at $.60 a loss of $.47, March/April settled at -$1.02 a loss of $.07, and April/May settled at -$1.42 a loss of $.02.
Yesterdays live cattle volume saw 13,247 contracts trade in the pit and 6,981 trade on Globex. Live cattle open interest gained 614 contracts to come in this morning at 211,052. Yesterday’s feeder cattle volume saw 1,575 contracts trade in the pit and 707 contracts trade on Globex. Feeder cattle open interest declined 95 contracts to come in this morning at 20,196.
Cattle futures settled higher yesterday on ideas last Friday’s sell off was overdone. The main reason for Friday’s sell off was talk of Mexico delisting 30 U.S. beef plants from exporting meat to Mexico, however 20 of those plants were relisted yesterday and the situation seems to be temporary. Deliveries against the December live cattle contract saw 3 loads posted in Columbus, NE, with RJO delivering and Rosenthal receiving. For the month there have been 29 deliveries, 20 retenders, 20 demands, and 6 reclaims. The last date on Dec deliveries was 12/3/08. Keep in mind December live cattle will go off the board at noon tomorrow. Weather looks to be very moderate for the next several days; however another round of heavy snows followed by some of the coldest temperatures of the year is expected to hit plains states cattle feeding regions Jan 8-9. Option trading has been very quiet the last several sessions; with the main feature being volatility coming back down to 22%. Still feel cattle futures will have some support in the coming sessions as will cash cattle and cash beef values. For the balance of this week, Feb cattle will have support at $85 with resistance at $89-$90. April cattle will find support at $88 with resistance at last weeks high of $91. Feeder cattle will find support on the March contract at $92 with resistance being found at $94. Taking out above mentioned resistance levels should prompt further spec short covering into the mid $90’s basis fat cattle and upper $90’s basis feeder cattle. Look for a $.10-$.30 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 untested with the exception of cattle that sold through auction markets. Packers were not bidding anything yesterday with feedlots beginning the week priced at $88-$89 live and $1.38-$1.40 dressed. A look at last week’s feedlot movement shows Texas/OK/NM feedlots selling 23,793 head of fed cattle (32,540 previous week) for mostly $86 live. Kansas feedlots sold 36,927 head of fed cattle (20,828) for $85 live and $1.35-$1.35 ½ dressed. Nebraska feedlots sold 64,671 head of fed cattle (57,476) for $84-$85 live and $1.35 dressed. Colorado feedlots sold 8,665 head of fed cattle (4,614) for mostly $85 live and $1.34-$1.35 dressed. Iowa/MN feedlots sold 25,462 head of fed cattle (19,265) for mostly $83-$84 live and $1.34-$1.35 dressed. As we can see movement in the north was pretty good and they did a good job in cleaning up a larger showlist offering last week, however southern movement was a little light. As such, southern feedlots carried some cattle over into this week and showlists in that part of the country look to be about 20,000 head larger in Texas and 10,000 head larger in Kansas. I still think the fed cattle market can be a little higher this week despite the larger showlists as packers will be buying for a full kill week next week and beef sales aren’t all that bad right now. I also think beef sales will pick up into the first couple of weeks of January, which will keep packers in the market for fed cattle to process. When all is said and done this week I will look for a cash fed cattle market that trades $86-$87 in the south and $84-$86 live and $1.35-$1.38 dressed in the north. Sale barn runs are very light this week with many auctions shut down until after the first of the year. Cattle that are selling through auction are bringing higher money with last week through with fed beef steers bringing $82-$85 and fed Holsteins bringing $72-$76. Slaughter cows bringing mostly steady to higher money at $38-$47 on the thin cows and $48-$57 on the fat cows. Feeder cattle runs are too light to establish a trend, however a higher undertone is evident on the cattle that are selling.
Cash Beef Situation and Outlook:
Yesterday’s cattle slaughter was estimated at 125,000 head, which would be 1,000 head above last week and 21,000 head above the same day a year ago. The industry will be looking for a 500,000 head production week. The boxed beef market was mixed yesterday with the choice cutout closing $.29 lower to settle at $144.17 and the select cutout closing $1.17 higher to settle at $135.77. Sales volume was good for a Monday with 307 loads of beef sold (99.24 loads of choice fab cuts, 67.99 loads of select fab cuts, 47.76 loads of trim, 91.70 loads of grinds). The choice/select spread settled at $8.40 a loss of $1.46.
The beef market saw continued gains in chuck and round cuts yesterday with demand described as decent. Continued weakness was evident in the rib complex along with further discounts surfacing in tenderloin butts and peeled tenders. Coarse ground markets were higher with very good movement as retail buyers came back to the market to secure some inventory. Boneless beef markets were higher, especially cow 90’s on a lack of production. I am still going to look for a mostly sideways beef market into next week with some buyer demand coming back to the market early next month.
Futures Market Situation and Outlook:
December live cattle settled at $85.97 a gain of $.07, February live cattle settled at $86.20 a gain of $.10, and April live cattle settled at $89.35 a gain of $.50. In the feeder cattle pit, January feeder cattle settled at $93.45 a gain of $.62, March feeder cattle settled at $92.85 a gain of $1.10, and the April feeder cattle settled at $93.87 a gain of $1.17. The reported CME feeder cattle index for 12/26/08 was $91.30 a gain of $.99. Live cattle spreads: Dec/Feb settled at -$.22 a loss of $.02, Feb/April settled at -$3.15 a loss of $.40, and April/June settled at $3.45 a loss of $.47. Feeder cattle spreads: Jan/March settled at $.60 a loss of $.47, March/April settled at -$1.02 a loss of $.07, and April/May settled at -$1.42 a loss of $.02.
Yesterdays live cattle volume saw 13,247 contracts trade in the pit and 6,981 trade on Globex. Live cattle open interest gained 614 contracts to come in this morning at 211,052. Yesterday’s feeder cattle volume saw 1,575 contracts trade in the pit and 707 contracts trade on Globex. Feeder cattle open interest declined 95 contracts to come in this morning at 20,196.
Cattle futures settled higher yesterday on ideas last Friday’s sell off was overdone. The main reason for Friday’s sell off was talk of Mexico delisting 30 U.S. beef plants from exporting meat to Mexico, however 20 of those plants were relisted yesterday and the situation seems to be temporary. Deliveries against the December live cattle contract saw 3 loads posted in Columbus, NE, with RJO delivering and Rosenthal receiving. For the month there have been 29 deliveries, 20 retenders, 20 demands, and 6 reclaims. The last date on Dec deliveries was 12/3/08. Keep in mind December live cattle will go off the board at noon tomorrow. Weather looks to be very moderate for the next several days; however another round of heavy snows followed by some of the coldest temperatures of the year is expected to hit plains states cattle feeding regions Jan 8-9. Option trading has been very quiet the last several sessions; with the main feature being volatility coming back down to 22%. Still feel cattle futures will have some support in the coming sessions as will cash cattle and cash beef values. For the balance of this week, Feb cattle will have support at $85 with resistance at $89-$90. April cattle will find support at $88 with resistance at last weeks high of $91. Feeder cattle will find support on the March contract at $92 with resistance being found at $94. Taking out above mentioned resistance levels should prompt further spec short covering into the mid $90’s basis fat cattle and upper $90’s basis feeder cattle. Look for a $.10-$.30 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, December 29, 2008
December 29, 2008
Good Morning from the Chicago Board of Trade,
Cash Cattle Situation and Outlook:
We left last week with a cash fed cattle trade that developed mostly $1-$2 higher on a live weight basis and $3-$4 higher on a dressed basis. Earlier in the week Nebraska, Colorado, and Iowa feedlots sold cattle for $84-$85 live and $1.35 dressed and on Friday Kansas and Texas/OK/NM feedlots sold cattle for $85/$1.35 in Kansas and $86 in Texas. Weekly sales volumes look to be around 58,000 head in Nebraska, 24,000 head in Iowa, and 7,000 head in Colorado. On Friday the USDA was reporting that 47,000 head of fed cattle had sold on the southern plains, however I will report on final totals once everything is counted and reported to the USDA today. Last week’s feeder cattle and slaughter cow markets were higher on reduced volume in the nations auction markets. Also on Friday there was news of the Mexican government suspending some beef, pork, and poultry imports from 30 U.S. processing plants due to meat labeling issues. The ban affects only 3 U.S. beef plants (1 in Kansas, 1 in Utah, and 1 in Pennsylvania) and was said by the Mexican government late on Friday as being only temporary and likely to be resolved by this week. Looking into this week, I would expect to see fed cattle prices hold steady with a chance of higher money being paid again as packers will be buying for a full kill week next week. Packer margins are modestly in the red, however have been improving for the last couple of weeks as they continue to move end meats and loin items at higher money, which I expect to continue into the first couple of weeks of the New Year. There will be continued salebarn disruptions this week due to the holiday, which should be supportive to slaughter cow and feeder cattle markets.
Cash Beef Situation and Outlook:
Last weeks cattle slaughter was estimated at 450,000 head and included a Friday kill of 112,000 head and a Saturday kill of 48,000 head. The weekly production produced an estimated 352.8 mil lbs of beef. Year-to-date production now stands .3% below last year at 25.919 bil lbs with ytd cattle slaughter .5% below a year ago at 33.446 mil head. From Thursday to Wednesday of last week choice boxed beef gained $2.91 to settle at $144.46 and select boxed beef lost $.47 to settle at $134.60 on light movement of 784 loads of fabricated cuts sold.
The choice beef market saw moderate gains last week as reduced production levels kept packer inventories well clear and those needing to buy meat were faced with higher asking prices. End meats and loin cuts were in fairly good demand ahead of the Christmas holiday and this should continue to remain the case going into the first of January. There of course will be some concern over the Mexican situation, however as mentioned above the ban affects only 3 beef plants and talk is that it will be resolved by this week. I would continue to look for middle meats to trade a little lower and end meats to trade higher.
Futures Market Situation and Outlook:
For the week, December live cattle lost $.20 to settle at $85.90, February live cattle lost $.67 to settle at $86.10, and April live cattle lost $.35 to settle at $88.35. In the feeder cattle pit for the week, January feeder cattle lost $.68 to settle at $92.82, March feeder cattle lost $1.47 to settle at $91.75, and April feeder cattle lost $1.55 to settle at $92.70. The latest reported CME feeder cattle index for 12/25/08 was $90.31 a loss of $1.03 for the week and $.86 for the week. For the week in live cattle spreads: Dec/Feb gained $.47 to settle at -$.20, Feb/April lost $.33 to settle at -$2.75, and April/June gained $.30 to settle at $3.92. For the week in feeder cattle spreads: Jan/March gained $.80 to settle at $1.07, March/April gained $.07 to settle at -$.95, and April/May lost $.55 to settle at -$1.40.
Fridays live cattle volume saw 11,108 contracts trade in the pit and 3,674 contracts trade on Globex. Live cattle open interest gained 116 contracts to come in this morning at 210,423. Friday’s feeder cattle volume saw 1,496 contracts trade in the pit and 514 contracts trade on Globex. Feeder cattle open interest gained 67 contracts to come in this morning at 20,332.
Futures settled sharply lower on Friday on a light volume trade and worries over the Mexican meat import ban. As I pointed out above I think the Mexican situation is a temporary one and I think futures could be a little higher on the open today. We had a nice rally in the cattle futures the last couple of weeks and to see the market break back into support like it did on Friday should not be unexpected. As of right now, I think cattle futures still have the potential to move higher in the coming weeks on short covering and cash strength. Look for a $.20-$.30 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 cash fed cattle trade that developed mostly $1-$2 higher on a live weight basis and $3-$4 higher on a dressed basis. Earlier in the week Nebraska, Colorado, and Iowa feedlots sold cattle for $84-$85 live and $1.35 dressed and on Friday Kansas and Texas/OK/NM feedlots sold cattle for $85/$1.35 in Kansas and $86 in Texas. Weekly sales volumes look to be around 58,000 head in Nebraska, 24,000 head in Iowa, and 7,000 head in Colorado. On Friday the USDA was reporting that 47,000 head of fed cattle had sold on the southern plains, however I will report on final totals once everything is counted and reported to the USDA today. Last week’s feeder cattle and slaughter cow markets were higher on reduced volume in the nations auction markets. Also on Friday there was news of the Mexican government suspending some beef, pork, and poultry imports from 30 U.S. processing plants due to meat labeling issues. The ban affects only 3 U.S. beef plants (1 in Kansas, 1 in Utah, and 1 in Pennsylvania) and was said by the Mexican government late on Friday as being only temporary and likely to be resolved by this week. Looking into this week, I would expect to see fed cattle prices hold steady with a chance of higher money being paid again as packers will be buying for a full kill week next week. Packer margins are modestly in the red, however have been improving for the last couple of weeks as they continue to move end meats and loin items at higher money, which I expect to continue into the first couple of weeks of the New Year. There will be continued salebarn disruptions this week due to the holiday, which should be supportive to slaughter cow and feeder cattle markets.
Cash Beef Situation and Outlook:
Last weeks cattle slaughter was estimated at 450,000 head and included a Friday kill of 112,000 head and a Saturday kill of 48,000 head. The weekly production produced an estimated 352.8 mil lbs of beef. Year-to-date production now stands .3% below last year at 25.919 bil lbs with ytd cattle slaughter .5% below a year ago at 33.446 mil head. From Thursday to Wednesday of last week choice boxed beef gained $2.91 to settle at $144.46 and select boxed beef lost $.47 to settle at $134.60 on light movement of 784 loads of fabricated cuts sold.
The choice beef market saw moderate gains last week as reduced production levels kept packer inventories well clear and those needing to buy meat were faced with higher asking prices. End meats and loin cuts were in fairly good demand ahead of the Christmas holiday and this should continue to remain the case going into the first of January. There of course will be some concern over the Mexican situation, however as mentioned above the ban affects only 3 beef plants and talk is that it will be resolved by this week. I would continue to look for middle meats to trade a little lower and end meats to trade higher.
Futures Market Situation and Outlook:
For the week, December live cattle lost $.20 to settle at $85.90, February live cattle lost $.67 to settle at $86.10, and April live cattle lost $.35 to settle at $88.35. In the feeder cattle pit for the week, January feeder cattle lost $.68 to settle at $92.82, March feeder cattle lost $1.47 to settle at $91.75, and April feeder cattle lost $1.55 to settle at $92.70. The latest reported CME feeder cattle index for 12/25/08 was $90.31 a loss of $1.03 for the week and $.86 for the week. For the week in live cattle spreads: Dec/Feb gained $.47 to settle at -$.20, Feb/April lost $.33 to settle at -$2.75, and April/June gained $.30 to settle at $3.92. For the week in feeder cattle spreads: Jan/March gained $.80 to settle at $1.07, March/April gained $.07 to settle at -$.95, and April/May lost $.55 to settle at -$1.40.
Fridays live cattle volume saw 11,108 contracts trade in the pit and 3,674 contracts trade on Globex. Live cattle open interest gained 116 contracts to come in this morning at 210,423. Friday’s feeder cattle volume saw 1,496 contracts trade in the pit and 514 contracts trade on Globex. Feeder cattle open interest gained 67 contracts to come in this morning at 20,332.
Futures settled sharply lower on Friday on a light volume trade and worries over the Mexican meat import ban. As I pointed out above I think the Mexican situation is a temporary one and I think futures could be a little higher on the open today. We had a nice rally in the cattle futures the last couple of weeks and to see the market break back into support like it did on Friday should not be unexpected. As of right now, I think cattle futures still have the potential to move higher in the coming weeks on short covering and cash strength. Look for a $.20-$.30 higher open to live and feeder cattle futures this morning. Trade Well!!!
Any one wanting a more detailed report on the cattle and beef markets including fundamental, chart and technical analysis, plus spec/hedge recommendations for packers, processors, producers, and meat buyers feel free to contact me by phone or e-mail to set up a free trial.
There is risk in trading futures and options.
Have a Good Day,
Troy Vetterkind
Vetterkind Cattle Brokerage, LLC
Chicago Board of Trade
141 West Jackson Blvd.
Suite 1220A
Chicago, IL 60604
1-888-299-1477 Toll Free
1-312-896-2068 Direct
1-708-224-5985 Mobile
tvetterkind@linngroup.com
Reproduction or rebroadcast of any portion of this information is strictly prohibited without the written permission of the Linn Group, Inc. the information reflected herein is derived from sources believed to be reliable; however, this information is not guaranteed as to its accuracy or completeness. Opinions expressed are subject to change without notice. This material and any view expressed herein are provided for informational purposes only and should not be construed in any way as an inducement to buy or sell commodity futures or options contracts. The Linn Group and its officers, directors, employees and affiliates may take positions for their own accounts in contracts referred to herein. Trading futures involves risk of loss. Past performance is not indicative of future results.
Tuesday, December 23, 2008
December 23, 2008
Good Morning from the Chicago Board of Trade,
Cash Cattle Situation and Outlook:
The cash fed cattle market was quiet yesterday as participants spent the day putting showlists together. Numbers for sale this week look lower in Nebraska and Kansas and mostly steady in Texas. The Nebraska showlist is said to be down close to 20,000 head as cattle are kept off the market to recover from last week’s winter weather. A look at last week’s feedlot movement shows 32,540 head of fed cattle sold in Texas/OK/NM (36,521 previous week) for mostly $85. Kansas feedlots sold 20,828 (21,269) head of fed cattle for mostly $83-$84 live and $1.32 dressed. Nebraska feedlots sold 57,476 (46,768) head of fed cattle for $81.50-$82.50 live and $1.30-$1.33 dressed. Iowa/MN feedlots sold 19,265 (19,831) head of fed cattle for $81.50-$82.50 live and $1.31 dressed. Colorado feedlots sold 4,614 (3,360) head of fed cattle for $82 live and $1.32 dressed. Cash fed cattle markets should be supported this week on reduced numbers for sale and a little better tone to the beef market, despite the fact we will have a short kill week. Futures markets seem to have some support under them as well, which will be another supportive factor. Cattle selling in the sale barns to start the week are bringing steady to $1 higher on the fat cattle, $2-$3 higher on the slaughter cows, and mostly $2-$3 on the feeder cattle. Oklahoma City is shut down for the next couple of weeks due to the holiday as will many other sales, which will be supportive to the feeder cattle market. I think packers will have some beef orders to fill when we get back from the holidays, which is going to keep some support under the market. Look for a feedlot trade to develop by Wednesday at $85-$86 live in Texas and Kansas and $83-$84/$1.34-$1.36 in the north.
Cash Beef Situation and Outlook:
Yesterday’s cattle slaughter was estimated at 124,000 head, which would be 9,000 head above last week and 100,000 head above the same day a year ago with the industry looking for a 495,000 head production week. The beef market was higher yesterday with the choice cutout closing $2.38 higher to settle at $144.27 and the select cutout closing $.25 higher to settle at $135.68. Sales volume was light with 197 loads of beef sold (53.97 loads of choice fab cuts, 65.49 loads of select fab cuts, 26.69 loads of trim, 51.21 loads of grinds). The choice/select spread settled at $8.59 a gain of $2.13.
The beef market was higher yesterday on strength in chuck and loin cuts. Two-piece chucks, chuck rolls, bone-in and boneless strips were all trading at higher price levels yesterday as buyers cover some needs ahead of the holiday. Production cutbacks were said to be a supportive factor to the market. Coarse ground and boneless beef markets were also higher yesterday adding to gains in cutout values. Look for a mostly sideways beef market for the balance of this week and next, with some strength emerging past the holidays.
Futures Market Situation and Outlook:
December live cattle settled at $85.97 a loss of $.12, February live cattle settled at $86.25 a loss of $.52, and the April live cattle settled at $88.82 a loss of $.37. In the feeder cattle pit, January feeder cattle settled at $93.37 a loss of $.12, March feeder cattle settled at $92.92 a loss of $.30, and the April feeder cattle settled at $94.07 a loss of $.17. The reported CME feeder cattle index for 12/19/08 was $91.31 a gain of $.14. Live cattle spreads: Dec/Feb settled at -$.27 a gain of $.40, Feb/April settled at -$2.57 a loss of $.15, and April/June settled at $3.80 a gain of $.17. Feeder cattle spreads: Jan/March settled at $.45 a gain of $.17, March/April settled at -$1.15 a loss of $.12, and April/May settled at -$.72 a gain of $.12.
Yesterdays live cattle volume saw 11,010 contracts trade in the pit and 5,202 trade on Globex. Live cattle open interest declined 326 contracts to come in this morning at 213,399. Yesterday’s feeder cattle volume saw 1,861 contracts trade in the pit and 1,007 trade on Globex. Feeder cattle open interest declined 195 contracts to come in this morning at 20,169.
Live and feeder cattle futures settled lower yesterday in a corrective type setback from last weeks strong gains. Yesterday saw very light volume on the break as many participants have already left for the holidays. The futures will be slow and choppy for the balance of the week. However, I believe we will have some support under the futures market as there will be support in the cash markets the next several weeks. I wouldn’t be too concerned with hedging many cattle until we get back from the holidays as I feel the market will appreciate in value in coming weeks. I will continue to view the market as a buy on flat price breaks of $1-$2. I will also be looking to put April/August bull spreads on at pull backs under $3.50 and put June/August bull spreads on at pull backs where June goes discount to August. Look for a $.10-$.20 higher open to live and feeder cattle futures this morning. Also, this will be my last letter for the week as I will be traveling back home for Christmas tomorrow, so I would like to take this chance to wish everyone who reads this a Very Merry Christmas!!! and as always Trade Well!!! I’ll be back on Monday.
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 participants spent the day putting showlists together. Numbers for sale this week look lower in Nebraska and Kansas and mostly steady in Texas. The Nebraska showlist is said to be down close to 20,000 head as cattle are kept off the market to recover from last week’s winter weather. A look at last week’s feedlot movement shows 32,540 head of fed cattle sold in Texas/OK/NM (36,521 previous week) for mostly $85. Kansas feedlots sold 20,828 (21,269) head of fed cattle for mostly $83-$84 live and $1.32 dressed. Nebraska feedlots sold 57,476 (46,768) head of fed cattle for $81.50-$82.50 live and $1.30-$1.33 dressed. Iowa/MN feedlots sold 19,265 (19,831) head of fed cattle for $81.50-$82.50 live and $1.31 dressed. Colorado feedlots sold 4,614 (3,360) head of fed cattle for $82 live and $1.32 dressed. Cash fed cattle markets should be supported this week on reduced numbers for sale and a little better tone to the beef market, despite the fact we will have a short kill week. Futures markets seem to have some support under them as well, which will be another supportive factor. Cattle selling in the sale barns to start the week are bringing steady to $1 higher on the fat cattle, $2-$3 higher on the slaughter cows, and mostly $2-$3 on the feeder cattle. Oklahoma City is shut down for the next couple of weeks due to the holiday as will many other sales, which will be supportive to the feeder cattle market. I think packers will have some beef orders to fill when we get back from the holidays, which is going to keep some support under the market. Look for a feedlot trade to develop by Wednesday at $85-$86 live in Texas and Kansas and $83-$84/$1.34-$1.36 in the north.
Cash Beef Situation and Outlook:
Yesterday’s cattle slaughter was estimated at 124,000 head, which would be 9,000 head above last week and 100,000 head above the same day a year ago with the industry looking for a 495,000 head production week. The beef market was higher yesterday with the choice cutout closing $2.38 higher to settle at $144.27 and the select cutout closing $.25 higher to settle at $135.68. Sales volume was light with 197 loads of beef sold (53.97 loads of choice fab cuts, 65.49 loads of select fab cuts, 26.69 loads of trim, 51.21 loads of grinds). The choice/select spread settled at $8.59 a gain of $2.13.
The beef market was higher yesterday on strength in chuck and loin cuts. Two-piece chucks, chuck rolls, bone-in and boneless strips were all trading at higher price levels yesterday as buyers cover some needs ahead of the holiday. Production cutbacks were said to be a supportive factor to the market. Coarse ground and boneless beef markets were also higher yesterday adding to gains in cutout values. Look for a mostly sideways beef market for the balance of this week and next, with some strength emerging past the holidays.
Futures Market Situation and Outlook:
December live cattle settled at $85.97 a loss of $.12, February live cattle settled at $86.25 a loss of $.52, and the April live cattle settled at $88.82 a loss of $.37. In the feeder cattle pit, January feeder cattle settled at $93.37 a loss of $.12, March feeder cattle settled at $92.92 a loss of $.30, and the April feeder cattle settled at $94.07 a loss of $.17. The reported CME feeder cattle index for 12/19/08 was $91.31 a gain of $.14. Live cattle spreads: Dec/Feb settled at -$.27 a gain of $.40, Feb/April settled at -$2.57 a loss of $.15, and April/June settled at $3.80 a gain of $.17. Feeder cattle spreads: Jan/March settled at $.45 a gain of $.17, March/April settled at -$1.15 a loss of $.12, and April/May settled at -$.72 a gain of $.12.
Yesterdays live cattle volume saw 11,010 contracts trade in the pit and 5,202 trade on Globex. Live cattle open interest declined 326 contracts to come in this morning at 213,399. Yesterday’s feeder cattle volume saw 1,861 contracts trade in the pit and 1,007 trade on Globex. Feeder cattle open interest declined 195 contracts to come in this morning at 20,169.
Live and feeder cattle futures settled lower yesterday in a corrective type setback from last weeks strong gains. Yesterday saw very light volume on the break as many participants have already left for the holidays. The futures will be slow and choppy for the balance of the week. However, I believe we will have some support under the futures market as there will be support in the cash markets the next several weeks. I wouldn’t be too concerned with hedging many cattle until we get back from the holidays as I feel the market will appreciate in value in coming weeks. I will continue to view the market as a buy on flat price breaks of $1-$2. I will also be looking to put April/August bull spreads on at pull backs under $3.50 and put June/August bull spreads on at pull backs where June goes discount to August. Look for a $.10-$.20 higher open to live and feeder cattle futures this morning. Also, this will be my last letter for the week as I will be traveling back home for Christmas tomorrow, so I would like to take this chance to wish everyone who reads this a Very Merry Christmas!!! and as always Trade Well!!! I’ll be back on Monday.
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, December 22, 2008
December 22, 2008
Good Morning from the Chicago Board of Trade,
Cash Cattle Situation and Outlook:
We left last week with a mostly steady cash fed cattle market and we had a cattle on feed report that came in mostly neutral to friendly. We’ll talk first about the cattle on feed report, which showed on feed Dec 1, 2008 at 11.345 mil head or 93.8% of a year ago (pre-report est. 93.9%), placed during November, 2.015 mil head or 94.8% of a year ago (pre-report est. 93.8%), and marketed during November at 1.575 mil head or 90.6% of a year ago (pre-report est. 88.8%). The report should be regarded as supply friendly with on feed totals running 6% below a year ago and placements lower for the 4th consecutive month in a row, although the placement number did come in a little larger than pre-report estimates. The marketing number, while 9% below last year, did come in higher then expectations despite two less slaughter days this year compared to last. The trend of placements being skewed towards heavier weight cattle continued with placements of cattle weighing over 700 lbs running 40,000 head or 5% above a year ago and placements of cattle weighing less then 700 lbs running 150,000 head or 12% below a year ago. Since September, we have now placed 531,000 head or 7% fewer cattle compared to a year ago. Of that, we see an increase of 169,000 or 5% of cattle weighing 700 lbs and over and a whopping decrease of 700,000 head or 17% of cattle weighing 700 lbs or less. The big cattle we know are going to begin hitting the market in the next couple of weeks and should last through mid March. The lighter cattle are either being put out on wheat or into a background yard, or are being retained by producers until the market improves and won’t start being placed until March/April, which puts them into an August forward marketing timeframe. This makes April/May/June very supply friendly at a time when beef demand ahead of spring/summer grilling season is at its best. We will have our usual run of heavier feeders that will come to market in January and be able to hit May/June, but with the dramatic decrease of lightweight fall placements and prospects for a better beef demand scenario going forward, I think we should still have a mid-upper $90’s fed cattle market late this spring/early summer.
Last weeks cash fed cattle market trade moderate numbers at $85 in Texas/OK/NM, steady with the week before. Kansas traded cattle at mostly $84 live, which was mostly steady with the week before, and Nebraska traded cattle at $82-$83 live and $1.32-$1.34 dressed, which would be steady on the live and $1-$2 better on the dressed. Movement looked moderate in the south and pretty decent in the north and I will report on totals tomorrow morning once everything is counted and reported to the USDA. For the week, feeder cattle markets were steady to $4 higher as weather hampered movement throughout the week and attitudes that the cattle market has turned higher kept buyers bidding higher on cattle last week. Slaughter cows also saw gains of $1-$2 throughout most of the week. This week looks like cash markets could be supported again as weather will be a concern in the northern plains hampering both cattle movement and performance. Many salebarns will be shut down for the holidays, which will also be supportive as livestock receipts will be curtailed. Look for steady to $1-$2 better on fats, feeders, and cows this week.
Cash Beef Situation and Outlook:
Last weeks cattle slaughter was estimated at 592,000 head, which would be 15,000 head below the previous week and 67,000 head below the same week a year ago. The weekly slaughter included a Friday kill of 120,000 head and a Saturday kill of 6,000 head and produced an estimated 464-mil lbs of beef. The year-to-date kill now stands at 32.933 mil head, .4% below a year ago with ytd beef production running .2% below a year ago at 25.564 bil lbs. From Thursday to Thursday of last week, choice boxed beef lost $.01 to settle at $141.55 and select boxed beef gained $2.34 to settle at $135.07 on moderate movement of 1,072 loads of fabricated beef cuts sold. Friday saw a higher day in the beef market with the choice cutout closing $.34 higher to settle at $141.89 and the select cutout closing $.36 higher to settle at $135.43. Sales volume on Friday was light with 233 loads of beef sold (88.69 loads of choice fab cuts, 72.01 loads of select fab cuts, 23.74 loads of trim, 38.26 loads of grinds). The choice/select spread settle at $6.46 a loss of $.02 for the day and a loss of $2.37 for the week.
The beef market was mostly steady last week as we started to see some interest in end meats from the retail and wholesale sectors of the market. The rib market was the major drag on the cutout market last week and the main reason the choice/select spread lost $2 last week. This will remain the case now for the next couple of months as end meats will have to support cutout values until spring. We should see another flurry of business in chucks and rounds after the New Year from both domestic and foreign buyers. For this week I will look for a mostly steady beef market as business will dry up by tomorrow as participants prepare for Christmas.
Futures Market Situation and Outlook:
For the week, December live cattle gained $2.78 to settle at $86.10, February live cattle gained $3.97 to settle at $86.77, and April live cattle gained $4.25 to settle at $89.20. In the feeder cattle pit, January gained $6.33 to settle at $93.50, March feeder cattle gained $6.77 to settle at $93.22, and the April feeder cattle gained $7.13 to settle at $94.25. The reported CME feeder cattle index for 12/18/08 was $91.17 a gain of $.82 for the day and a gain of $2.60 for the week. Live cattle spreads: (weekly chg.) Dec/Feb settled at -$.67 a loss of $1.19, Feb/April settled at -$2.42 a loss of $.27, and April/June settled at $3.62 a gain of $.42. Feeder cattle spreads: (weekly chg.) Jan/March settled at $.27 a loss of $.45, March/April settled at -$1.02 a loss of $.35, and April/May settled at -$.85 a gain of $.77.
Fridays live cattle volume saw 16,035 contracts trade in the pit and 8,437 contracts trade on Globex. Live cattle open interest declined 927 contracts to come in this morning at 212,712. Friday’s feeder cattle volume saw 2,459 contracts trade in the pit and 1,120 contracts trade on Globex. Feeder cattle open interest declined 182 contracts to come in this morning at 20,749. For the week, live cattle open interest gained 2,601 contracts and feeder cattle open interest gained 697 contracts.
The latest commitment of traders report detailing positions from 12/9-12/16 showed small funds net short 14,324 contracts of live cattle futures and options a decline of 1,079 shorts. The commercial trader was net short 58,939 contracts of live cattle F/O a gain of 104 shorts. The index trader was net long 96,935 contracts of live cattle F/O a decline of 1,004 longs. The small spec trader was net short 23,672 contracts of live cattle F/O a decline of 28 shorts. In the feeder cattle, small funds were net short 4,319 contracts of feeder cattle F/O a gain of 293 shorts. The commercial trader was net long 2,337 contracts of feeder cattle F/O a decline of 78 longs. The index fund trader was net long 6,393 contracts of feeder cattle F/O a decline of 34 longs. The small spec trader was net short 4,411 contracts of feeder cattle F/O a decline of 406 shorts.
Live and feeder cattle futures ended the week with solid gains as discounts to cash, weather concerns, and ideas cash markets would improve past the New Year had accounts stepping aside from shorts in the market. This week the futures market should be a little higher early and likely fade late as many traders move to the sidelines ahead of the Christmas holiday. The market feels good to me and I think we will come back from the holidays and be able to build on the recent gains that we have seen. Beef demand will pick up past the first of the year and as outlined above we are dealing with a cattle market that is very supply friendly for the late spring and early summer timeframe. Continue to look for near term breaks in the market as buying opportunities. Look for a $.20-$.40 higher open to 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 mostly steady cash fed cattle market and we had a cattle on feed report that came in mostly neutral to friendly. We’ll talk first about the cattle on feed report, which showed on feed Dec 1, 2008 at 11.345 mil head or 93.8% of a year ago (pre-report est. 93.9%), placed during November, 2.015 mil head or 94.8% of a year ago (pre-report est. 93.8%), and marketed during November at 1.575 mil head or 90.6% of a year ago (pre-report est. 88.8%). The report should be regarded as supply friendly with on feed totals running 6% below a year ago and placements lower for the 4th consecutive month in a row, although the placement number did come in a little larger than pre-report estimates. The marketing number, while 9% below last year, did come in higher then expectations despite two less slaughter days this year compared to last. The trend of placements being skewed towards heavier weight cattle continued with placements of cattle weighing over 700 lbs running 40,000 head or 5% above a year ago and placements of cattle weighing less then 700 lbs running 150,000 head or 12% below a year ago. Since September, we have now placed 531,000 head or 7% fewer cattle compared to a year ago. Of that, we see an increase of 169,000 or 5% of cattle weighing 700 lbs and over and a whopping decrease of 700,000 head or 17% of cattle weighing 700 lbs or less. The big cattle we know are going to begin hitting the market in the next couple of weeks and should last through mid March. The lighter cattle are either being put out on wheat or into a background yard, or are being retained by producers until the market improves and won’t start being placed until March/April, which puts them into an August forward marketing timeframe. This makes April/May/June very supply friendly at a time when beef demand ahead of spring/summer grilling season is at its best. We will have our usual run of heavier feeders that will come to market in January and be able to hit May/June, but with the dramatic decrease of lightweight fall placements and prospects for a better beef demand scenario going forward, I think we should still have a mid-upper $90’s fed cattle market late this spring/early summer.
Last weeks cash fed cattle market trade moderate numbers at $85 in Texas/OK/NM, steady with the week before. Kansas traded cattle at mostly $84 live, which was mostly steady with the week before, and Nebraska traded cattle at $82-$83 live and $1.32-$1.34 dressed, which would be steady on the live and $1-$2 better on the dressed. Movement looked moderate in the south and pretty decent in the north and I will report on totals tomorrow morning once everything is counted and reported to the USDA. For the week, feeder cattle markets were steady to $4 higher as weather hampered movement throughout the week and attitudes that the cattle market has turned higher kept buyers bidding higher on cattle last week. Slaughter cows also saw gains of $1-$2 throughout most of the week. This week looks like cash markets could be supported again as weather will be a concern in the northern plains hampering both cattle movement and performance. Many salebarns will be shut down for the holidays, which will also be supportive as livestock receipts will be curtailed. Look for steady to $1-$2 better on fats, feeders, and cows this week.
Cash Beef Situation and Outlook:
Last weeks cattle slaughter was estimated at 592,000 head, which would be 15,000 head below the previous week and 67,000 head below the same week a year ago. The weekly slaughter included a Friday kill of 120,000 head and a Saturday kill of 6,000 head and produced an estimated 464-mil lbs of beef. The year-to-date kill now stands at 32.933 mil head, .4% below a year ago with ytd beef production running .2% below a year ago at 25.564 bil lbs. From Thursday to Thursday of last week, choice boxed beef lost $.01 to settle at $141.55 and select boxed beef gained $2.34 to settle at $135.07 on moderate movement of 1,072 loads of fabricated beef cuts sold. Friday saw a higher day in the beef market with the choice cutout closing $.34 higher to settle at $141.89 and the select cutout closing $.36 higher to settle at $135.43. Sales volume on Friday was light with 233 loads of beef sold (88.69 loads of choice fab cuts, 72.01 loads of select fab cuts, 23.74 loads of trim, 38.26 loads of grinds). The choice/select spread settle at $6.46 a loss of $.02 for the day and a loss of $2.37 for the week.
The beef market was mostly steady last week as we started to see some interest in end meats from the retail and wholesale sectors of the market. The rib market was the major drag on the cutout market last week and the main reason the choice/select spread lost $2 last week. This will remain the case now for the next couple of months as end meats will have to support cutout values until spring. We should see another flurry of business in chucks and rounds after the New Year from both domestic and foreign buyers. For this week I will look for a mostly steady beef market as business will dry up by tomorrow as participants prepare for Christmas.
Futures Market Situation and Outlook:
For the week, December live cattle gained $2.78 to settle at $86.10, February live cattle gained $3.97 to settle at $86.77, and April live cattle gained $4.25 to settle at $89.20. In the feeder cattle pit, January gained $6.33 to settle at $93.50, March feeder cattle gained $6.77 to settle at $93.22, and the April feeder cattle gained $7.13 to settle at $94.25. The reported CME feeder cattle index for 12/18/08 was $91.17 a gain of $.82 for the day and a gain of $2.60 for the week. Live cattle spreads: (weekly chg.) Dec/Feb settled at -$.67 a loss of $1.19, Feb/April settled at -$2.42 a loss of $.27, and April/June settled at $3.62 a gain of $.42. Feeder cattle spreads: (weekly chg.) Jan/March settled at $.27 a loss of $.45, March/April settled at -$1.02 a loss of $.35, and April/May settled at -$.85 a gain of $.77.
Fridays live cattle volume saw 16,035 contracts trade in the pit and 8,437 contracts trade on Globex. Live cattle open interest declined 927 contracts to come in this morning at 212,712. Friday’s feeder cattle volume saw 2,459 contracts trade in the pit and 1,120 contracts trade on Globex. Feeder cattle open interest declined 182 contracts to come in this morning at 20,749. For the week, live cattle open interest gained 2,601 contracts and feeder cattle open interest gained 697 contracts.
The latest commitment of traders report detailing positions from 12/9-12/16 showed small funds net short 14,324 contracts of live cattle futures and options a decline of 1,079 shorts. The commercial trader was net short 58,939 contracts of live cattle F/O a gain of 104 shorts. The index trader was net long 96,935 contracts of live cattle F/O a decline of 1,004 longs. The small spec trader was net short 23,672 contracts of live cattle F/O a decline of 28 shorts. In the feeder cattle, small funds were net short 4,319 contracts of feeder cattle F/O a gain of 293 shorts. The commercial trader was net long 2,337 contracts of feeder cattle F/O a decline of 78 longs. The index fund trader was net long 6,393 contracts of feeder cattle F/O a decline of 34 longs. The small spec trader was net short 4,411 contracts of feeder cattle F/O a decline of 406 shorts.
Live and feeder cattle futures ended the week with solid gains as discounts to cash, weather concerns, and ideas cash markets would improve past the New Year had accounts stepping aside from shorts in the market. This week the futures market should be a little higher early and likely fade late as many traders move to the sidelines ahead of the Christmas holiday. The market feels good to me and I think we will come back from the holidays and be able to build on the recent gains that we have seen. Beef demand will pick up past the first of the year and as outlined above we are dealing with a cattle market that is very supply friendly for the late spring and early summer timeframe. Continue to look for near term breaks in the market as buying opportunities. Look for a $.20-$.40 higher open to 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, December 19, 2008
December 19, 2008
Good Morning from the Chicago Board of Trade,
Cash Cattle Situation and Outlook:
The cash fed cattle market began to turn active yesterday afternoon in the northern feeding regions of Nebraska and Iowa at prices generally $1-$2 higher compared to the pervious week at $1.32-$1.34. There was also a moderate trade that developed in Kansas at $84, which would be steady with last week. Numbers that sold look moderate with about 20,000 head of cattle changing hands in Nebraska and 5,000 head in Kansas. Most feedlots in Texas were passing lower packer bids and as such there was no cattle trade down there yesterday. Packers were bidding up to $84 in Texas with feedlots looking for $88-$89, and I would expect to see trade develop down there at $85-$87 by this afternoon, and we may not trade cattle until after the on feed report is released. I would look for further cleanup trade in Kansas and Nebraska, Iowa, and Colorado at steady money with yesterday. Going home for the weekend markets on feeder cattle and slaughter cows are mostly $2-$4 higher, and I would expect that strength to carryover into next week as many sales will be shut down for the holiday.
Cash Beef Situation and Outlook:
Yesterdays kill was estimated at 121,000 head, which would be 5,000 head below last week and 5,000 head below the same day a year ago. The week-to-date kill now stands at 466,000 head, which would be 15,000 head below the same period a year ago. The boxed beef market was lower yesterday with the choice cutout closing $2.59 lower to settle at $141.55 and the select cutout closing $.23 lower to settle at $135.07. Sales volume was light with 248 loads of beef sold (85.03 loads of choice fab cuts, 72.67 loads of select fab cuts, 42.92 loads of trim, and 46.87 loads of grinds). The choice/select spread settled at $6.48 a loss of $2.36.
Several days of lower ribeye and rib roast pricing finally showed up in the USDA choice cutout last night. There were lower trading levels on rib cuts again yesterday along with price reductions noted on choice, select, and no-roll PSMO’s. The rest of the loin, chuck, and round complexes were fairly well supported yesterday, with special interest noted in choice boneless strips. Domestic and imported boneless beef values were higher yesterday as processors try to secure some supply ahead of the upcoming shortened holiday production weeks. I would look for a sideways beef market into early next week. Seasonal’s will be well at play with lower priced middle meats being offset by higher priced end meats.
Futures Market Situation and Outlook:
December live cattle settled at $84.70 a loss of $1.75, February live cattle settled at $85.70 a loss of $1.17, and the April live cattle settled at $88.37 a loss of $1.07. In the feeder cattle pit, January feeder cattle settled at $92.40 a loss of $1.05, March feeder cattle settled at $91.77 a loss of $1.20, and the April feeder cattle settled at $92.80 a loss of $1.05. The reported CME feeder cattle index for . Live cattle spreads: Dec/Feb settled at -$1.00 a loss of $.57, Feb/April settled at -$2.67 a loss of $.10, and April/June settled at $3.42 a loss of $.22. Feeder cattle spreads: Jan/March settled at $.62 a gain of $.15, March/April settled at -$1.02 a loss of $.15, and April/May settled at -$.50 a gain of $.50.
Yesterdays live cattle volume saw 19,091 contracts trade in the pit and 9,649 contracts trade on Globex. Live cattle open interest gained 808 contracts to come in this morning at 213,667. Yesterday’s feeder cattle volume saw 2,504 contracts trade in the pit and 1,375 contracts trade on Globex. Feeder cattle open interest gained 346 contracts to come in this morning at 20,931.
Live and feeder cattle settled lower in a technical correction and profit taking from the recent run up in prices. There was also some selling linked to concerns over the stock market, which closed 200 points lower yesterday. This morning the market will be positioning itself ahead of the cattle on feed report and will be eagerly awaiting cash information out of the southern plains. Estimates for the on feed report are, on feed 93.9%, placed 93.8%, and marketed 88.8%. If the report comes out this way it would certainly be supply friendly for the first and second quarter of next year. The marketing number was lower because of two less kill days this year compared to last year. Some of this bullishness has been priced in already, however the market is going to need to see signs of better demand before we can extend any kind of rally. Weather could play a role in the market next week as we are supposed to see more snow followed by sharply lower temps and winds in the northern plains feeding regions this weekend. Equity markets look like they should open steady this morning, with some of the outside commodity markets trading lower and the U.S. dollar trading sharply higher. I think we need to see Feb live cattle hold $85 today and front month feeders hold $90 in order to stave off further selling early next week. Look for a $20-$.40 lower open to live and feeder cattle futures this morning. Trade Well!!!
Any one wanting a more detailed report on the cattle and beef markets including fundamental, chart and technical analysis, plus spec/hedge recommendations for packers, processors, producers, and meat buyers feel free to contact me by phone or e-mail to set up a free trial.
There is risk in trading futures and options.
Have a Good Day,
Troy Vetterkind
Vetterkind Cattle Brokerage, LLC
Chicago Board of Trade
141 West Jackson Blvd.
Suite 1220A
Chicago, IL 60604
1-888-299-1477 Toll Free
1-312-896-2068 Direct
1-708-224-5985 Mobile
tvetterkind@linngroup.com
Reproduction or rebroadcast of any portion of this information is strictly prohibited without the written permission of the Linn Group, Inc. the information reflected herein is derived from sources believed to be reliable; however, this information is not guaranteed as to its accuracy or completeness. Opinions expressed are subject to change without notice. This material and any view expressed herein are provided for informational purposes only and should not be construed in any way as an inducement to buy or sell commodity futures or options contracts. The Linn Group and its officers, directors, employees and affiliates may take positions for their own accounts in contracts referred to herein. Trading futures involves risk of loss. Past performance is not indicative of future results.
Good Morning from the Chicago Board of Trade,
Cash Cattle Situation and Outlook:
The cash fed cattle market began to turn active yesterday afternoon in the northern feeding regions of Nebraska and Iowa at prices generally $1-$2 higher compared to the pervious week at $1.32-$1.34. There was also a moderate trade that developed in Kansas at $84, which would be steady with last week. Numbers that sold look moderate with about 20,000 head of cattle changing hands in Nebraska and 5,000 head in Kansas. Most feedlots in Texas were passing lower packer bids and as such there was no cattle trade down there yesterday. Packers were bidding up to $84 in Texas with feedlots looking for $88-$89, and I would expect to see trade develop down there at $85-$87 by this afternoon, and we may not trade cattle until after the on feed report is released. I would look for further cleanup trade in Kansas and Nebraska, Iowa, and Colorado at steady money with yesterday. Going home for the weekend markets on feeder cattle and slaughter cows are mostly $2-$4 higher, and I would expect that strength to carryover into next week as many sales will be shut down for the holiday.
Cash Beef Situation and Outlook:
Yesterdays kill was estimated at 121,000 head, which would be 5,000 head below last week and 5,000 head below the same day a year ago. The week-to-date kill now stands at 466,000 head, which would be 15,000 head below the same period a year ago. The boxed beef market was lower yesterday with the choice cutout closing $2.59 lower to settle at $141.55 and the select cutout closing $.23 lower to settle at $135.07. Sales volume was light with 248 loads of beef sold (85.03 loads of choice fab cuts, 72.67 loads of select fab cuts, 42.92 loads of trim, and 46.87 loads of grinds). The choice/select spread settled at $6.48 a loss of $2.36.
Several days of lower ribeye and rib roast pricing finally showed up in the USDA choice cutout last night. There were lower trading levels on rib cuts again yesterday along with price reductions noted on choice, select, and no-roll PSMO’s. The rest of the loin, chuck, and round complexes were fairly well supported yesterday, with special interest noted in choice boneless strips. Domestic and imported boneless beef values were higher yesterday as processors try to secure some supply ahead of the upcoming shortened holiday production weeks. I would look for a sideways beef market into early next week. Seasonal’s will be well at play with lower priced middle meats being offset by higher priced end meats.
Futures Market Situation and Outlook:
December live cattle settled at $84.70 a loss of $1.75, February live cattle settled at $85.70 a loss of $1.17, and the April live cattle settled at $88.37 a loss of $1.07. In the feeder cattle pit, January feeder cattle settled at $92.40 a loss of $1.05, March feeder cattle settled at $91.77 a loss of $1.20, and the April feeder cattle settled at $92.80 a loss of $1.05. The reported CME feeder cattle index for . Live cattle spreads: Dec/Feb settled at -$1.00 a loss of $.57, Feb/April settled at -$2.67 a loss of $.10, and April/June settled at $3.42 a loss of $.22. Feeder cattle spreads: Jan/March settled at $.62 a gain of $.15, March/April settled at -$1.02 a loss of $.15, and April/May settled at -$.50 a gain of $.50.
Yesterdays live cattle volume saw 19,091 contracts trade in the pit and 9,649 contracts trade on Globex. Live cattle open interest gained 808 contracts to come in this morning at 213,667. Yesterday’s feeder cattle volume saw 2,504 contracts trade in the pit and 1,375 contracts trade on Globex. Feeder cattle open interest gained 346 contracts to come in this morning at 20,931.
Live and feeder cattle settled lower in a technical correction and profit taking from the recent run up in prices. There was also some selling linked to concerns over the stock market, which closed 200 points lower yesterday. This morning the market will be positioning itself ahead of the cattle on feed report and will be eagerly awaiting cash information out of the southern plains. Estimates for the on feed report are, on feed 93.9%, placed 93.8%, and marketed 88.8%. If the report comes out this way it would certainly be supply friendly for the first and second quarter of next year. The marketing number was lower because of two less kill days this year compared to last year. Some of this bullishness has been priced in already, however the market is going to need to see signs of better demand before we can extend any kind of rally. Weather could play a role in the market next week as we are supposed to see more snow followed by sharply lower temps and winds in the northern plains feeding regions this weekend. Equity markets look like they should open steady this morning, with some of the outside commodity markets trading lower and the U.S. dollar trading sharply higher. I think we need to see Feb live cattle hold $85 today and front month feeders hold $90 in order to stave off further selling early next week. Look for a $20-$.40 lower open to live and feeder cattle futures this morning. Trade Well!!!
Any one wanting a more detailed report on the cattle and beef markets including fundamental, chart and technical analysis, plus spec/hedge recommendations for packers, processors, producers, and meat buyers feel free to contact me by phone or e-mail to set up a free trial.
There is risk in trading futures and options.
Have a Good Day,
Troy Vetterkind
Vetterkind Cattle Brokerage, LLC
Chicago Board of Trade
141 West Jackson Blvd.
Suite 1220A
Chicago, IL 60604
1-888-299-1477 Toll Free
1-312-896-2068 Direct
1-708-224-5985 Mobile
tvetterkind@linngroup.com
Reproduction or rebroadcast of any portion of this information is strictly prohibited without the written permission of the Linn Group, Inc. the information reflected herein is derived from sources believed to be reliable; however, this information is not guaranteed as to its accuracy or completeness. Opinions expressed are subject to change without notice. This material and any view expressed herein are provided for informational purposes only and should not be construed in any way as an inducement to buy or sell commodity futures or options contracts. The Linn Group and its officers, directors, employees and affiliates may take positions for their own accounts in contracts referred to herein. Trading futures involves risk of loss. Past performance is not indicative of future results.
Thursday, December 18, 2008
December 18, 2008
Good Morning from the Chicago Board of Trade,
Cash Cattle Situation and Outlook:
Cash fed cattle trading in the nations feedlots was at a standstill yesterday as packer bids of $84 live and feeder offering prices of $88-$89/$1.40 plus remain dollars apart as of the midweek point. Weather and margin issues have kept this weeks cattle slaughter running 10,000 head behind last weeks pace, however it is said that certain plants could be getting close to the knife on inventory as they purchased only moderate numbers of fed cattle last week. This could have fed cattle buyers moving their bids closer to steady as early as today in the north as they look to secure some inventory ahead of another stormy weekend slated for northern feeding states. The beef market continues to hold up fairly well early this week and we are seeing some business develop on end meats ahead of the holiday shortened production weeks that lie ahead. Futures managed to hold onto recent gains yesterday, which should be supportive to this week’s cash trade as well. I will continue to look for a steady to $1 higher fed cattle trade for this week at $85-$86 live in the south and $1.36-$1.38 dressed in the north. Cattle selling through the auction markets are all bringing at least $1-$2 higher money on fat cattle, slaughter cows, and feeder cattle. That strength in the salebarn trade should carry over into next week.
Cash Beef Situation and Outlook:
Yesterday’s cattle slaughter was estimated at 105,000 head, which would be steady with a week ago and 22,000 head below the same day a year ago. The week-to-date kill now stands at 345,000 head, which would be 10,000 head below the same period a week ago with the industry looking for a 612,000 head production week. The boxed beef market was mixed yesterday with the choice cutout closing $.05 lower to settle at $144.14 and the select cutout closing $.72 higher to settle at $135.30. Sales volume was good with 303 loads of beef sold (107.88 loads of choice fab cuts, 100.33 loads of select fab cuts, 14.97 loads of trim, 80.19 loads of grinds). The choice/select spread settled at $8.84 a loss of $.77.
The beef market was higher yesterday with decent buyer demand noted on chuck, round, and loin cuts. Rib items were mostly lower yesterday as buying for the holidays has all but dried up. Pricing on ribs into the end of January also takes place at lower money, which weighs on spot prices as well. Boneless beef markets were slightly lower yesterday on an increase of product offered to the market. The beef market should be supported into the first of next week on moderate demand from retail ahead of the holidays. The market will get pretty slow through the holidays, however should pick back up past New Years. With the dollar falling out of bed (i.e. $78.35 as of this morning), I would expect to see an increase in export orders in January as well. Beef exports for the week of December 5-11, 2008 are as follows:
Beef: Net sales of 2,400 MT resulted as increases for Mexico (2,800 MT), Canada (900 MT), and Japan (100 MT), were partially offset by decreases for Vietnam (700 MT), South Korea (400 MT), and Hong Kong (200 MT). Net Sales of 4,900 MT for delivery in 2009 were primarily for South Korea (1,300 MT), Vietnam (1,300 MT), Japan (1,100 MT), and Hong Kong (400 MT). Exports of 8,500 MT were primarily to Mexico (4,100 MT), Canada (1,800 MT), South Korea (700 MT), Japan (500 MT), and Taiwan (400 MT).
Futures Market Situation and Outlook:
December live cattle settled at $86.45 a loss of $.12, February live cattle settled at $86.87 a gain of $.07, and the April live cattle settled at $89.45 a gain of $.30. In the feeder cattle pit, January feeder cattle settled at $93.45 a gain of $2.32, March feeder cattle settled at $92.97 a gain of $2.05, and the April feeder cattle settled at $93.85 a gain of $2.00. The reported CME feeder cattle index for 12/16/08 was $89.81 a gain of $.38. Live cattle spreads: Dec/Feb settled at -$.42 a loss of $.20, Feb/April settled at -$2.57 a loss of $.22, and April/June settled at $3.65 a gain of $.05. Feeder cattle spreads: Jan/March settled at $.47 a gain of $.27, March/April settled at -$.87 a gain of $.05, and April/May settled at -$1.00 a loss of $.15.
Yesterdays live cattle volume saw 21,643 contracts trade in the pit and 9,837 contracts trade on Globex. Live cattle open interest gained 555 contracts to come in this morning at 212,788. Yesterday’s feeder cattle volume saw 4,856 contracts trade in the pit and 1,361 contracts trade on Globex. Feeder cattle open interest declined 265 contracts to come in this morning at 20,593.
It was choppy day in the live cattle futures yesterday as the market opened higher, broke through midsession, only to rally back going into the close. Feeder cattle held onto most of their gains throughout the session and acted very well all day. All in all the futures act pretty well and I think we will continue to see support under the market on minor breaks. There remain no deliveries against the December live cattle contract. Keep in mind there will be a cattle on feed report out after the close tomorrow. Estimates for the report at on feed 93.9%, placed 93.8%, and marketed 88.8%. Support on any weakness early today should be found at $86 in Feb live, $88.50 in April live, and $91 in March feeders. Keeping front month live cattle futures above $86 and front month feeders above $90 by Friday’s close will look positive going into next week. Look for a $.10-$.20 lower 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:
Cash fed cattle trading in the nations feedlots was at a standstill yesterday as packer bids of $84 live and feeder offering prices of $88-$89/$1.40 plus remain dollars apart as of the midweek point. Weather and margin issues have kept this weeks cattle slaughter running 10,000 head behind last weeks pace, however it is said that certain plants could be getting close to the knife on inventory as they purchased only moderate numbers of fed cattle last week. This could have fed cattle buyers moving their bids closer to steady as early as today in the north as they look to secure some inventory ahead of another stormy weekend slated for northern feeding states. The beef market continues to hold up fairly well early this week and we are seeing some business develop on end meats ahead of the holiday shortened production weeks that lie ahead. Futures managed to hold onto recent gains yesterday, which should be supportive to this week’s cash trade as well. I will continue to look for a steady to $1 higher fed cattle trade for this week at $85-$86 live in the south and $1.36-$1.38 dressed in the north. Cattle selling through the auction markets are all bringing at least $1-$2 higher money on fat cattle, slaughter cows, and feeder cattle. That strength in the salebarn trade should carry over into next week.
Cash Beef Situation and Outlook:
Yesterday’s cattle slaughter was estimated at 105,000 head, which would be steady with a week ago and 22,000 head below the same day a year ago. The week-to-date kill now stands at 345,000 head, which would be 10,000 head below the same period a week ago with the industry looking for a 612,000 head production week. The boxed beef market was mixed yesterday with the choice cutout closing $.05 lower to settle at $144.14 and the select cutout closing $.72 higher to settle at $135.30. Sales volume was good with 303 loads of beef sold (107.88 loads of choice fab cuts, 100.33 loads of select fab cuts, 14.97 loads of trim, 80.19 loads of grinds). The choice/select spread settled at $8.84 a loss of $.77.
The beef market was higher yesterday with decent buyer demand noted on chuck, round, and loin cuts. Rib items were mostly lower yesterday as buying for the holidays has all but dried up. Pricing on ribs into the end of January also takes place at lower money, which weighs on spot prices as well. Boneless beef markets were slightly lower yesterday on an increase of product offered to the market. The beef market should be supported into the first of next week on moderate demand from retail ahead of the holidays. The market will get pretty slow through the holidays, however should pick back up past New Years. With the dollar falling out of bed (i.e. $78.35 as of this morning), I would expect to see an increase in export orders in January as well. Beef exports for the week of December 5-11, 2008 are as follows:
Beef: Net sales of 2,400 MT resulted as increases for Mexico (2,800 MT), Canada (900 MT), and Japan (100 MT), were partially offset by decreases for Vietnam (700 MT), South Korea (400 MT), and Hong Kong (200 MT). Net Sales of 4,900 MT for delivery in 2009 were primarily for South Korea (1,300 MT), Vietnam (1,300 MT), Japan (1,100 MT), and Hong Kong (400 MT). Exports of 8,500 MT were primarily to Mexico (4,100 MT), Canada (1,800 MT), South Korea (700 MT), Japan (500 MT), and Taiwan (400 MT).
Futures Market Situation and Outlook:
December live cattle settled at $86.45 a loss of $.12, February live cattle settled at $86.87 a gain of $.07, and the April live cattle settled at $89.45 a gain of $.30. In the feeder cattle pit, January feeder cattle settled at $93.45 a gain of $2.32, March feeder cattle settled at $92.97 a gain of $2.05, and the April feeder cattle settled at $93.85 a gain of $2.00. The reported CME feeder cattle index for 12/16/08 was $89.81 a gain of $.38. Live cattle spreads: Dec/Feb settled at -$.42 a loss of $.20, Feb/April settled at -$2.57 a loss of $.22, and April/June settled at $3.65 a gain of $.05. Feeder cattle spreads: Jan/March settled at $.47 a gain of $.27, March/April settled at -$.87 a gain of $.05, and April/May settled at -$1.00 a loss of $.15.
Yesterdays live cattle volume saw 21,643 contracts trade in the pit and 9,837 contracts trade on Globex. Live cattle open interest gained 555 contracts to come in this morning at 212,788. Yesterday’s feeder cattle volume saw 4,856 contracts trade in the pit and 1,361 contracts trade on Globex. Feeder cattle open interest declined 265 contracts to come in this morning at 20,593.
It was choppy day in the live cattle futures yesterday as the market opened higher, broke through midsession, only to rally back going into the close. Feeder cattle held onto most of their gains throughout the session and acted very well all day. All in all the futures act pretty well and I think we will continue to see support under the market on minor breaks. There remain no deliveries against the December live cattle contract. Keep in mind there will be a cattle on feed report out after the close tomorrow. Estimates for the report at on feed 93.9%, placed 93.8%, and marketed 88.8%. Support on any weakness early today should be found at $86 in Feb live, $88.50 in April live, and $91 in March feeders. Keeping front month live cattle futures above $86 and front month feeders above $90 by Friday’s close will look positive going into next week. Look for a $.10-$.20 lower to live and feeder cattle futures this morning. Trade Well!!!
Any one wanting a more detailed report on the cattle and beef markets including fundamental, chart and technical analysis, plus spec/hedge recommendations for packers, processors, producers, and meat buyers feel free to contact me by phone or e-mail to set up a free trial.
There is risk in trading futures and options.
Have a Good Day,
Troy Vetterkind
Vetterkind Cattle Brokerage, LLC
Chicago Board of Trade
141 West Jackson Blvd.
Suite 1220A
Chicago, IL 60604
1-888-299-1477 Toll Free
1-312-896-2068 Direct
1-708-224-5985 Mobile
tvetterkind@linngroup.com
Reproduction or rebroadcast of any portion of this information is strictly prohibited without the written permission of the Linn Group, Inc. the information reflected herein is derived from sources believed to be reliable; however, this information is not guaranteed as to its accuracy or completeness. Opinions expressed are subject to change without notice. This material and any view expressed herein are provided for informational purposes only and should not be construed in any way as an inducement to buy or sell commodity futures or options contracts. The Linn Group and its officers, directors, employees and affiliates may take positions for their own accounts in contracts referred to herein. Trading futures involves risk of loss. Past performance is not indicative of future results.
Wednesday, December 17, 2008
December 17, 2008
Good Morning from the Chicago Board of Trade,
Cash Cattle Situation and Outlook:
The cash fed cattle market was untested yesterday as both buyers and sellers spent the day watching price action on the futures board and in the boxed beef market to determine where cattle should be priced this week. Certainly the limit up move in the futures had cattle feeders emboldened to hold out for higher money until the end of the week. The beef market isn’t acting all that bad either this week, which will help to alleviate margins pressures at the packinghouse as well. Showlists look a little larger in Nebraska and Kansas and smaller in Texas this week, and with feeders in the panhandle pulling cattle forward the last couple of weeks will give them some bargaining power in this weeks price negotiations. Cattle performance in the northern feeding areas hasn’t been all that great since last weekend with snow and bitterly cold wind chills impeding daily weight gains, with more of the same type of weather slated for Nebraska and Iowa this coming weekend. This has packers paying higher money for northern fed cattle in the salebarns early this week, and I would expect to see this price strength spill over into the feedlot trade late this week. Packer bids were not being tendered yesterday with feedlot offering prices being raised up to $90 live and $1.40 plus dressed, and I would expect to see a late week trade develop at $87-$88 in the south and $1.36-$1.38 dressed in the north. Kills will be cut back the next couple of weeks for the holiday’s, however if weather becomes an issue and the beef market holds together we should be able to hold the fed market in the mid-upper $80’s into the first of the year. At which time we will have to see how aggressive the retail/wholesale guys come back to the beef market. We know we will have an increased fed cattle supply to kill through for the first couple of months of the new year, so it will be up to demand and weather to determine how high the fed cattle market can trade during this timeframe. Yesterday saw higher feeder cattle and slaughter cow markets in the salebarn trade and I would expect this to continue for the next couple of weeks as many sales shut down for the holiday’s thus curtailing receipts of replacement and slaughter cattle.
Cash Beef Situation and Outlook:
Yesterdays kill was estimated at 125,000 head, which would be 2,000 head above last week and 3,000 head below the same day a year ago. The week-to-date kill now stands at 240,000 head, which would be 10,000 head below last weeks pace with the industry looking for a 620,000 head production week. The boxed beef market was higher yesterday with the choice cutout closing $.54 higher to settle at $144.19 and the select cutout closing $.85 higher to settle at $134.58. Sales volume was light with 228 loads of beef sold (86.98 loads of choice fab cuts, 66.80 loads of select fab cuts, 19.86 loads of trim, 54.73 loads of grinds). The choice/select spread settled at $9.60 a loss of $.31.
The beef market was higher yesterday as strength was being found in chuck and round cuts ahead of the holiday shortened production weeks. Gains in cutout values were tempered by sharp discounts in ribeyes as holiday buying for this item is all but complete. Moderate demand and price strength surfaced again in the short loin and top butt market. Yesterday saw a slight up tick in ground chuck prices with a mixed tone to the boneless beef markets, higher on the cow 90’s and lower on the fed cattle 50’s. Seasonals look to be well at play here as price strength and demand is beginning to show up in end meats with weakness coming into the middle meat complex. This will likely be the case for the next couple of months as the retailer will be aggressively featuring lower priced ground beef and roasting items after the New Year. I would also expect to see the export buyer find some value in lower priced beef items past the first of the year given recent weakness in the U.S. dollar. The U.S. dollar is another $.80 lower this morning trading under $80.00, and holding below this level keeps the door open to the mid-$70’s, which will make exports attractive, especially on chuck and round cuts that have been in free fall the last several weeks. I will continue to look for cutout values to find support for the next several weeks at $1.40 basis choice and $1.30 basis select.
Futures Market Situation and Outlook:
December live cattle settled at $86.57 a gain of $2.42, February live cattle settled at $86.80 a gain of $3.00, and the April live cattle settled at $89.15 a gain of $3.00. In the feeder cattle pit, January feeder cattle settled at $91.12 a gain of $3.00, March feeder cattle settled at $90.92 a gain of $3.00, and the April feeder cattle settled at $91.85 a gain of $3.00. The reported CME feeder cattle index for 12/15/08 was $89.43 a gain of $.21. Live cattle spreads: Dec/Feb settled at -$.22 a loss of $.57, Feb/April settled at -$2.35 steady on the day, and April/June settled at $3.60 a gain of $.22. Feeder cattle spreads: Jan/March settled at $.20 steady on the day and March/April settled at -$.92 steady on the day.
Yesterdays live cattle volume saw 24,418 contracts trade in the pit and 11,865 contracts trade on Globex. Live cattle open interest gained 259 contracts to come in this morning at 212,225. Yesterday’s feeder cattle volume saw 3,531 contracts trade in the pit and 1,083 contracts trade on Globex. Feeder cattle open interest declined 344 contracts to come in this morning at 20,863.
Live and feeder cattle settled sharply higher with some contracts posting limit gains on ideas of higher cash cattle markets for this week and winter weather hampering cattle performance in plains state feeding areas. This inspired a technical short covering rally that eventually pushed Feb and April live cattle and the first 4 contract months in the feeder cattle to limit bid. Technically the market had a very positive close with Feb fats closing above $86 and front month feeders closing above $90. We will need to see these price levels (i.e. $86 in the fats and $90 in the feeders) hold by the end of the week to confirm a near term bottom in cattle futures. The market has a lot of bearish supply/demand news already priced in and we have a huge net short fund and spec position sitting in the market. So could the lows be put in for awhile? Yea, it could be if beef demand were to pick up and we continue to see a pattern of adverse winter weather run through cattle feeding country every other week. The next major level of resistance on front month live cattle futures will be at $90 and in the feeder cattle at $94-$95.
Something I found interesting this morning was how the market acted at the top back in July vs. how it acts now. I have included a daily price chart of February live cattle below, and I want to point out how at the top of the market we were dealing with big premiums and everyone thought we were going to $1.25. It is interesting to note that on Friday June 20th we pushed futures into new highs at $117.65 only to close $1.45 off those highs to settle at $116.20. We spent the next 9 trading days in a consolidation type trade between $115-$117 before trading limit down on Monday July 7th, from which point the market never looked back. As noted on the chart below, on Friday December 5th the market was trading sharply lower into new lows at $80.60 and everyone was talking about $65 fat cattle and the futures were trading at big discounts. That day we closed $.85 off our lows at $81.45, spent the next six trading days in a consolidation type trade between $82-$84 before closing limit up yesterday. I don’t know if two Friday’s ago the market put in a bottom, however I thought the similarities in the price action between the top in July and what we are seeing now was interesting, and you probably want to go with it until it proves you wrong. Look for a $.50 higher open to live cattle futures and $1.00-$1.50 higher in the feeder cattle. Trade Well!!!
Any one wanting a more detailed report on the cattle and beef markets including fundamental, chart and technical analysis, plus spec/hedge recommendations for packers, processors, producers, and meat buyers feel free to contact me by phone or e-mail to set up a free trial.
There is risk in trading futures and options.
Have a Good Day,
Troy Vetterkind
Vetterkind Cattle Brokerage, LLC
Chicago Board of Trade
141 West Jackson Blvd.
Suite 1220A
Chicago, IL 60604
1-888-299-1477 Toll Free
1-312-896-2068 Direct
1-708-224-5985 Mobile
tvetterkind@linngroup.com
Reproduction or rebroadcast of any portion of this information is strictly prohibited without the written permission of the Linn Group, Inc. the information reflected herein is derived from sources believed to be reliable; however, this information is not guaranteed as to its accuracy or completeness. Opinions expressed are subject to change without notice. This material and any view expressed herein are provided for informational purposes only and should not be construed in any way as an inducement to buy or sell commodity futures or options contracts. The Linn Group and its officers, directors, employees and affiliates may take positions for their own accounts in contracts referred to herein. Trading futures involves risk of loss. Past performance is not indicative of future results.
Good Morning from the Chicago Board of Trade,
Cash Cattle Situation and Outlook:
The cash fed cattle market was untested yesterday as both buyers and sellers spent the day watching price action on the futures board and in the boxed beef market to determine where cattle should be priced this week. Certainly the limit up move in the futures had cattle feeders emboldened to hold out for higher money until the end of the week. The beef market isn’t acting all that bad either this week, which will help to alleviate margins pressures at the packinghouse as well. Showlists look a little larger in Nebraska and Kansas and smaller in Texas this week, and with feeders in the panhandle pulling cattle forward the last couple of weeks will give them some bargaining power in this weeks price negotiations. Cattle performance in the northern feeding areas hasn’t been all that great since last weekend with snow and bitterly cold wind chills impeding daily weight gains, with more of the same type of weather slated for Nebraska and Iowa this coming weekend. This has packers paying higher money for northern fed cattle in the salebarns early this week, and I would expect to see this price strength spill over into the feedlot trade late this week. Packer bids were not being tendered yesterday with feedlot offering prices being raised up to $90 live and $1.40 plus dressed, and I would expect to see a late week trade develop at $87-$88 in the south and $1.36-$1.38 dressed in the north. Kills will be cut back the next couple of weeks for the holiday’s, however if weather becomes an issue and the beef market holds together we should be able to hold the fed market in the mid-upper $80’s into the first of the year. At which time we will have to see how aggressive the retail/wholesale guys come back to the beef market. We know we will have an increased fed cattle supply to kill through for the first couple of months of the new year, so it will be up to demand and weather to determine how high the fed cattle market can trade during this timeframe. Yesterday saw higher feeder cattle and slaughter cow markets in the salebarn trade and I would expect this to continue for the next couple of weeks as many sales shut down for the holiday’s thus curtailing receipts of replacement and slaughter cattle.
Cash Beef Situation and Outlook:
Yesterdays kill was estimated at 125,000 head, which would be 2,000 head above last week and 3,000 head below the same day a year ago. The week-to-date kill now stands at 240,000 head, which would be 10,000 head below last weeks pace with the industry looking for a 620,000 head production week. The boxed beef market was higher yesterday with the choice cutout closing $.54 higher to settle at $144.19 and the select cutout closing $.85 higher to settle at $134.58. Sales volume was light with 228 loads of beef sold (86.98 loads of choice fab cuts, 66.80 loads of select fab cuts, 19.86 loads of trim, 54.73 loads of grinds). The choice/select spread settled at $9.60 a loss of $.31.
The beef market was higher yesterday as strength was being found in chuck and round cuts ahead of the holiday shortened production weeks. Gains in cutout values were tempered by sharp discounts in ribeyes as holiday buying for this item is all but complete. Moderate demand and price strength surfaced again in the short loin and top butt market. Yesterday saw a slight up tick in ground chuck prices with a mixed tone to the boneless beef markets, higher on the cow 90’s and lower on the fed cattle 50’s. Seasonals look to be well at play here as price strength and demand is beginning to show up in end meats with weakness coming into the middle meat complex. This will likely be the case for the next couple of months as the retailer will be aggressively featuring lower priced ground beef and roasting items after the New Year. I would also expect to see the export buyer find some value in lower priced beef items past the first of the year given recent weakness in the U.S. dollar. The U.S. dollar is another $.80 lower this morning trading under $80.00, and holding below this level keeps the door open to the mid-$70’s, which will make exports attractive, especially on chuck and round cuts that have been in free fall the last several weeks. I will continue to look for cutout values to find support for the next several weeks at $1.40 basis choice and $1.30 basis select.
Futures Market Situation and Outlook:
December live cattle settled at $86.57 a gain of $2.42, February live cattle settled at $86.80 a gain of $3.00, and the April live cattle settled at $89.15 a gain of $3.00. In the feeder cattle pit, January feeder cattle settled at $91.12 a gain of $3.00, March feeder cattle settled at $90.92 a gain of $3.00, and the April feeder cattle settled at $91.85 a gain of $3.00. The reported CME feeder cattle index for 12/15/08 was $89.43 a gain of $.21. Live cattle spreads: Dec/Feb settled at -$.22 a loss of $.57, Feb/April settled at -$2.35 steady on the day, and April/June settled at $3.60 a gain of $.22. Feeder cattle spreads: Jan/March settled at $.20 steady on the day and March/April settled at -$.92 steady on the day.
Yesterdays live cattle volume saw 24,418 contracts trade in the pit and 11,865 contracts trade on Globex. Live cattle open interest gained 259 contracts to come in this morning at 212,225. Yesterday’s feeder cattle volume saw 3,531 contracts trade in the pit and 1,083 contracts trade on Globex. Feeder cattle open interest declined 344 contracts to come in this morning at 20,863.
Live and feeder cattle settled sharply higher with some contracts posting limit gains on ideas of higher cash cattle markets for this week and winter weather hampering cattle performance in plains state feeding areas. This inspired a technical short covering rally that eventually pushed Feb and April live cattle and the first 4 contract months in the feeder cattle to limit bid. Technically the market had a very positive close with Feb fats closing above $86 and front month feeders closing above $90. We will need to see these price levels (i.e. $86 in the fats and $90 in the feeders) hold by the end of the week to confirm a near term bottom in cattle futures. The market has a lot of bearish supply/demand news already priced in and we have a huge net short fund and spec position sitting in the market. So could the lows be put in for awhile? Yea, it could be if beef demand were to pick up and we continue to see a pattern of adverse winter weather run through cattle feeding country every other week. The next major level of resistance on front month live cattle futures will be at $90 and in the feeder cattle at $94-$95.
Something I found interesting this morning was how the market acted at the top back in July vs. how it acts now. I have included a daily price chart of February live cattle below, and I want to point out how at the top of the market we were dealing with big premiums and everyone thought we were going to $1.25. It is interesting to note that on Friday June 20th we pushed futures into new highs at $117.65 only to close $1.45 off those highs to settle at $116.20. We spent the next 9 trading days in a consolidation type trade between $115-$117 before trading limit down on Monday July 7th, from which point the market never looked back. As noted on the chart below, on Friday December 5th the market was trading sharply lower into new lows at $80.60 and everyone was talking about $65 fat cattle and the futures were trading at big discounts. That day we closed $.85 off our lows at $81.45, spent the next six trading days in a consolidation type trade between $82-$84 before closing limit up yesterday. I don’t know if two Friday’s ago the market put in a bottom, however I thought the similarities in the price action between the top in July and what we are seeing now was interesting, and you probably want to go with it until it proves you wrong. Look for a $.50 higher open to live cattle futures and $1.00-$1.50 higher in the feeder cattle. Trade Well!!!
Any one wanting a more detailed report on the cattle and beef markets including fundamental, chart and technical analysis, plus spec/hedge recommendations for packers, processors, producers, and meat buyers feel free to contact me by phone or e-mail to set up a free trial.
There is risk in trading futures and options.
Have a Good Day,
Troy Vetterkind
Vetterkind Cattle Brokerage, LLC
Chicago Board of Trade
141 West Jackson Blvd.
Suite 1220A
Chicago, IL 60604
1-888-299-1477 Toll Free
1-312-896-2068 Direct
1-708-224-5985 Mobile
tvetterkind@linngroup.com
Reproduction or rebroadcast of any portion of this information is strictly prohibited without the written permission of the Linn Group, Inc. the information reflected herein is derived from sources believed to be reliable; however, this information is not guaranteed as to its accuracy or completeness. Opinions expressed are subject to change without notice. This material and any view expressed herein are provided for informational purposes only and should not be construed in any way as an inducement to buy or sell commodity futures or options contracts. The Linn Group and its officers, directors, employees and affiliates may take positions for their own accounts in contracts referred to herein. Trading futures involves risk of loss. Past performance is not indicative of future results.
Tuesday, December 16, 2008
December 16, 2008
Good Morning from the Chicago Board of Trade,
Cash Cattle Situation and Outlook:
The cash fed cattle market was at a standstill yesterday except for those cattle that sold through auction. A look at last weeks sales volumes and prices shows Texas/OK/NM feedlots selling 36,521 (39,854 the week before) head of fed cattle for $85 live, Kansas feedlots sold 21,269 (29,005) head of fed cattle for $84 live and $1.32 dressed, Nebraska feedlots sold 46,768 (41,713) head of fed cattle for $82-$83 live and $1.30-$1.33 dressed, Colorado feedlots sold 3,360 (5,258) head of fed cattle for $83-$84 live and $1.32 dressed, and Iowa/MN feedlots sold 20,031 (26,833) head of fed cattle for $80-$82 live and $1.31-$1.32 dressed. Movement looked to be moderate again last week, which is leading to a little larger showlist offering in Nebraska and Kansas and smaller in Texas. Packer bids were not being tendered yesterday with most feedlots beginning the week offering their cattle at $88 live in the south and $1.38-$1.40 dressed in the north. Market psychology received a shot in the arm yesterday with the higher settlements in the futures and boxed beef markets. The weather also turned quite a bit cooler in all areas of cattle feeding country, which will impede livestock performance. Overall though, the beef continues to be hard to move, however there was some business beginning to develop yesterday ahead of the two holiday shortened production weeks. The beef should begin to find some support in the upper $1.30’s to lower $1.40’s, which could help to stabilize the cash fed cattle market in the coming weeks. Rallies in the cash market will be limited in the near term though until we get past the holidays. For this week I am going to look for a fed cattle market that trades steady to possibly $1 higher at $85-$86 in the south and $1.32-$1.34 in the north.
Cattle selling in the auction markets are beginning the week with some moderate strength as we see fed cattle trading through the upper Midwest salebarns bringing steady to $1 higher money at $80-$83 on the beef fats and $70-$74 on the Holstein fats. Slaughter cows were $1-$2 higher with the cutters and boners bringing $30-$41 and the fat cows bringing $42-$53. Oklahoma City had an estimated run of 9,500 head of feeder cattle on offer yesterday with that market being called $1 lower early and fully steady to $1 higher late in the day. The calves were off a couple of dollars as buyer demand for calves was diminished due to a lack of moisture on wheat pastures and colder weather throughout the southern plains. The majority of the 5 weight steers in OKC yesterday were bringing $88-$100, 6 weights were bringing $85-$94, 7 weights were bringing $85-$92, and the 8 weights were bringing $85-$90. I would probably look for further strength in the feeder cattle market, especially on the true yearling cattle that will finish late spring/early summer.
Cash Beef Situation and Outlook:
Yesterday’s cattle slaughter was estimated at 118,000 head, which would be 9,000 head below last weeks date and 21,000 head above the same day a year ago. The industry will be looking for a 612,000 head production week. The boxed beef market was higher yesterday with the choice cutout closing $2.43 higher to settle at $143.65 and the select cutout closing $1.34 higher to settle at $133.73. Sales volume was light with 206 loads of beef sold (68.48 loads of choice fab cuts, 77.77 loads of select fab cuts, 13.94 loads of trim, and 45.89 loads of grinds). The choice/select spread settled at $9.92 a gain of $1.09.
The beef market was higher yesterday on retail buying ahead of the holiday shortened production weeks that lie ahead. Strength yesterday was being found in chuck short ribs, inside rounds, strip loins, and top butts. Most rib cuts were under pressure yesterday as were coarse ground beef markets. Boneless manufacturing beef was higher as processors were concerned about inventory ahead of the holidays. 90’s and 50’s could find a little support going through the holidays as cow and fed cattle kills will be down. It looks as though rib cuts will remain under pressure for the next several weeks now that the majority of the holiday buying is wrapped up. To counter act some of this weakness though, it is expected that chuck and round cuts could start to move both through domestic and export channels, especially considering certain round cuts are now at yearly lows. Loins will move in spurts but like the rib cuts, we likely won’t see any type of lasting rally in the loins until spring arrives. This will leave end meats to carry the burden of holding cutout values together. I would expect to see lower priced cuts like chuck, round, and ground beef items to begin moving better through retail once we get past the holidays. This should help stabilize boneless beef items as well. Look for choice cutout values to stabilize in the lower $1.40 area and the select cutout to stabilize in the lower $1.30 area going through the holiday.
Futures Market Situation and Outlook:
December live cattle settled at $84.15 a gain of $.82, February live cattle settled at $83.80 a gain of $1.00, and the April live cattle settled at $86.15 a gain of $1.20. In the feeder cattle pit, January feeder cattle settled at $88.12 a gain of $.95, March feeder cattle settled at $87.92 a gain of $1.47, and the April feeder cattle settled at $88.85 a gain of $1.72. The reported CME feeder cattle index for 12/12/08 was $89.22 a gain of $.65. Live cattle spreads: Dec/Feb settled at $.35 a loss of $.17, Feb/April settled at -$2.35 a loss of $.20 and April/June settled at $3.37 a gain of $.17. Feeder cattle: Jan/March settled at $.20 a loss of $.52 and March/April settled at -$.92 a loss of $.25.
Yesterdays live cattle volume saw 18,260 contracts trade in the pit and 6,932 contracts trade on Globex. Live cattle open interest gained 1,856 contracts to come in this morning at 211,967. Yesterday’s feeder cattle volume saw 1,915 contracts trade in the pit and 855 contracts trade on Globex. Feeder cattle open interest declined 238 contracts to come in this morning at 21,208.
Live and feeder cattle futures settled with decent gains yesterday on continued discounts to the current cash markets, winter weather concerns in cattle feeding country, and short covering by speculative accounts. There was also some liquidation out of December live cattle ahead of that contracts expiration at the end of the month and the movement of Jan feeder longs into deferred month contracts. There remain no deliveries against the December live cattle contract due to current discounts to the cash fed cattle market. Deferred month fat cattle spreads (i.e. April/June and June/August) also firmed up yesterday on ideas of winter weather beginning to hit the plains and in anticipation of this Friday’s cattle on feed report, which is expected to show another month of lower placements into the nations feedlots thus continuing to build on a moderate marketing hole in early spring. The report is expected to show cattle on feed numbers 6% below last year with placements during November running 5%-8% below last year and marketing’s during November running 10%-12% below a year ago. The market is anticipating the lower marketing rate and increased yearling cattle placements from August-October by pricing Feb/April at a $2.35 discount and the subsequent trend of lower calf placements throughout the fall by pricing April/June @$3.37 and June/August @$.80. Option trading was rather subdued yesterday with the main feature of the day looking to be unwinding of Feb live cattle $90 risk/reversals, where they were selling the $90 put and buying back the $90 call. The volatility skew flattened out further with atm volatility now trading at 25% from Feb-June. Flat price action looked pretty good in April and June live cattle futures as those months managed to take out and close above last week’s highs. Most feeder cattle futures, with the exception of April, came right up to last week’s highs and stopped. Follow through to the upside today and tomorrow would indicate a further appreciation of prices into next week and further adjustment of basis from positive to negative. Support for Feb live cattle for the rest of the week will be found at $82-$82.25 and in the April live cattle at $84-$84.50. Both Jan and March feeders will have support at $86. Resistance in Feb live cattle will be encountered at $85-$86 and in April live at $87-$88. Feeder cattle closed right up against resistance yesterday at $88 and holding above that level would keep the door open to $90-$92 in the near term. 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 at a standstill yesterday except for those cattle that sold through auction. A look at last weeks sales volumes and prices shows Texas/OK/NM feedlots selling 36,521 (39,854 the week before) head of fed cattle for $85 live, Kansas feedlots sold 21,269 (29,005) head of fed cattle for $84 live and $1.32 dressed, Nebraska feedlots sold 46,768 (41,713) head of fed cattle for $82-$83 live and $1.30-$1.33 dressed, Colorado feedlots sold 3,360 (5,258) head of fed cattle for $83-$84 live and $1.32 dressed, and Iowa/MN feedlots sold 20,031 (26,833) head of fed cattle for $80-$82 live and $1.31-$1.32 dressed. Movement looked to be moderate again last week, which is leading to a little larger showlist offering in Nebraska and Kansas and smaller in Texas. Packer bids were not being tendered yesterday with most feedlots beginning the week offering their cattle at $88 live in the south and $1.38-$1.40 dressed in the north. Market psychology received a shot in the arm yesterday with the higher settlements in the futures and boxed beef markets. The weather also turned quite a bit cooler in all areas of cattle feeding country, which will impede livestock performance. Overall though, the beef continues to be hard to move, however there was some business beginning to develop yesterday ahead of the two holiday shortened production weeks. The beef should begin to find some support in the upper $1.30’s to lower $1.40’s, which could help to stabilize the cash fed cattle market in the coming weeks. Rallies in the cash market will be limited in the near term though until we get past the holidays. For this week I am going to look for a fed cattle market that trades steady to possibly $1 higher at $85-$86 in the south and $1.32-$1.34 in the north.
Cattle selling in the auction markets are beginning the week with some moderate strength as we see fed cattle trading through the upper Midwest salebarns bringing steady to $1 higher money at $80-$83 on the beef fats and $70-$74 on the Holstein fats. Slaughter cows were $1-$2 higher with the cutters and boners bringing $30-$41 and the fat cows bringing $42-$53. Oklahoma City had an estimated run of 9,500 head of feeder cattle on offer yesterday with that market being called $1 lower early and fully steady to $1 higher late in the day. The calves were off a couple of dollars as buyer demand for calves was diminished due to a lack of moisture on wheat pastures and colder weather throughout the southern plains. The majority of the 5 weight steers in OKC yesterday were bringing $88-$100, 6 weights were bringing $85-$94, 7 weights were bringing $85-$92, and the 8 weights were bringing $85-$90. I would probably look for further strength in the feeder cattle market, especially on the true yearling cattle that will finish late spring/early summer.
Cash Beef Situation and Outlook:
Yesterday’s cattle slaughter was estimated at 118,000 head, which would be 9,000 head below last weeks date and 21,000 head above the same day a year ago. The industry will be looking for a 612,000 head production week. The boxed beef market was higher yesterday with the choice cutout closing $2.43 higher to settle at $143.65 and the select cutout closing $1.34 higher to settle at $133.73. Sales volume was light with 206 loads of beef sold (68.48 loads of choice fab cuts, 77.77 loads of select fab cuts, 13.94 loads of trim, and 45.89 loads of grinds). The choice/select spread settled at $9.92 a gain of $1.09.
The beef market was higher yesterday on retail buying ahead of the holiday shortened production weeks that lie ahead. Strength yesterday was being found in chuck short ribs, inside rounds, strip loins, and top butts. Most rib cuts were under pressure yesterday as were coarse ground beef markets. Boneless manufacturing beef was higher as processors were concerned about inventory ahead of the holidays. 90’s and 50’s could find a little support going through the holidays as cow and fed cattle kills will be down. It looks as though rib cuts will remain under pressure for the next several weeks now that the majority of the holiday buying is wrapped up. To counter act some of this weakness though, it is expected that chuck and round cuts could start to move both through domestic and export channels, especially considering certain round cuts are now at yearly lows. Loins will move in spurts but like the rib cuts, we likely won’t see any type of lasting rally in the loins until spring arrives. This will leave end meats to carry the burden of holding cutout values together. I would expect to see lower priced cuts like chuck, round, and ground beef items to begin moving better through retail once we get past the holidays. This should help stabilize boneless beef items as well. Look for choice cutout values to stabilize in the lower $1.40 area and the select cutout to stabilize in the lower $1.30 area going through the holiday.
Futures Market Situation and Outlook:
December live cattle settled at $84.15 a gain of $.82, February live cattle settled at $83.80 a gain of $1.00, and the April live cattle settled at $86.15 a gain of $1.20. In the feeder cattle pit, January feeder cattle settled at $88.12 a gain of $.95, March feeder cattle settled at $87.92 a gain of $1.47, and the April feeder cattle settled at $88.85 a gain of $1.72. The reported CME feeder cattle index for 12/12/08 was $89.22 a gain of $.65. Live cattle spreads: Dec/Feb settled at $.35 a loss of $.17, Feb/April settled at -$2.35 a loss of $.20 and April/June settled at $3.37 a gain of $.17. Feeder cattle: Jan/March settled at $.20 a loss of $.52 and March/April settled at -$.92 a loss of $.25.
Yesterdays live cattle volume saw 18,260 contracts trade in the pit and 6,932 contracts trade on Globex. Live cattle open interest gained 1,856 contracts to come in this morning at 211,967. Yesterday’s feeder cattle volume saw 1,915 contracts trade in the pit and 855 contracts trade on Globex. Feeder cattle open interest declined 238 contracts to come in this morning at 21,208.
Live and feeder cattle futures settled with decent gains yesterday on continued discounts to the current cash markets, winter weather concerns in cattle feeding country, and short covering by speculative accounts. There was also some liquidation out of December live cattle ahead of that contracts expiration at the end of the month and the movement of Jan feeder longs into deferred month contracts. There remain no deliveries against the December live cattle contract due to current discounts to the cash fed cattle market. Deferred month fat cattle spreads (i.e. April/June and June/August) also firmed up yesterday on ideas of winter weather beginning to hit the plains and in anticipation of this Friday’s cattle on feed report, which is expected to show another month of lower placements into the nations feedlots thus continuing to build on a moderate marketing hole in early spring. The report is expected to show cattle on feed numbers 6% below last year with placements during November running 5%-8% below last year and marketing’s during November running 10%-12% below a year ago. The market is anticipating the lower marketing rate and increased yearling cattle placements from August-October by pricing Feb/April at a $2.35 discount and the subsequent trend of lower calf placements throughout the fall by pricing April/June @$3.37 and June/August @$.80. Option trading was rather subdued yesterday with the main feature of the day looking to be unwinding of Feb live cattle $90 risk/reversals, where they were selling the $90 put and buying back the $90 call. The volatility skew flattened out further with atm volatility now trading at 25% from Feb-June. Flat price action looked pretty good in April and June live cattle futures as those months managed to take out and close above last week’s highs. Most feeder cattle futures, with the exception of April, came right up to last week’s highs and stopped. Follow through to the upside today and tomorrow would indicate a further appreciation of prices into next week and further adjustment of basis from positive to negative. Support for Feb live cattle for the rest of the week will be found at $82-$82.25 and in the April live cattle at $84-$84.50. Both Jan and March feeders will have support at $86. Resistance in Feb live cattle will be encountered at $85-$86 and in April live at $87-$88. Feeder cattle closed right up against resistance yesterday at $88 and holding above that level would keep the door open to $90-$92 in the near term. 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, December 15, 2008
December 15, 2008
Good Morning from the Chicago Board of Trade,
Cash Cattle Situation and Outlook:
We left last week with a moderate fed cattle trade that developed in Nebraska and Iowa at mostly $82 live and $1.30-$1.33 dressed, Colorado at $83-$84 live, Kansas at $84 live, and in Texas at $85 live. For the week the USDA was reporting 18,000 head of cattle sold in Kansas, 39,000 head in Nebraska, 2,400 head in Colorado, 19,000 head in Iowa, and 400 head in Texas. The Texas trade took place late Friday afternoon and many cattle sales won’t be reported until today, at which time I will relay the information tomorrow morning. Most of last weeks trade was $2-$3 lower on a live weight basis and $5 lower on a dressed basis, which was in line with most expectations. Texas feeders were able to hold their market at $85 as they had the smallest showlist last week. Last weeks feeder cattle market was mostly lower early, however a firmer tone did start to develop late in the week mostly on weaned calves and true yearling cattle. Moisture concerns over the southern plains wheat crop had wheat pasture buyers looking to procure lightweight cattle at lower money. Slaughter cow and bull markets were mostly $1-$2 lower as well last week. Looking into this week, cash fed cattle markets don’t look all that positive as the lower boxed beef and drop markets continues to pressure packer margins. As a result we can expect to see them keep production levels curtailed and working from contract and formula supplies. Packers will also be buying for a short kill next week and the week after due to the holiday’s, which again will give them some leverage in the market. The feeder cattle market and slaughter cow markets could find some support for this week and during the holiday’s as many auction markets will begin to shut down for Christmas and New Year’s, which will severely curtail receipts.
Cash Beef Situation and Outlook:
Last weeks cattle kill was estimated at 607,000 head, which would be 14,000 head below the previous week and 44,000 head below the same week a year ago. The weekly slaughter produced an estimated 475-mil lbs of beef compared to 484 mil lbs the week before. Year-to-date beef production is running even with a year ago at 25.099 bil lbs, with the ytd cattle slaughter running .2% below a year ago at 32.401 mil head. From Thursday to Thursday of last week choice boxed beef lost $4.22 to settle at $141.56 and select boxed beef lost $4.41 to settle at $132.73 on moderate movement of 1,066 loads of fabricated cuts. Friday saw another lower day in the beef market with the choice cutout closing $.34 lower to settle at $141.22 and the select cutout closing $.34 lower to settle at $132.39. Sales volume on Friday was light with 235 loads of beef sold (74.49 loads of choice fab cuts, 73.23 loads of select fab cuts, 33.11 loads of trim, 54.31loads of grinds). The choice/select spread settled at $8.82 steady on the day and a gain of $1.67 for the week.
The beef market was lower last week on a lack of retail and export demand. The price declines were witnessed throughout all primal areas of the carcass with chuck and round cuts leading the way down along with coarse ground markets, which shows a lack of consumer demand for these items at retail. With that said though, there was some moderate strength beginning to develop in the chuck roll and inside/bottom round markets, especially the round cuts, as they dip below year ago levels and some were looking at these items as having some value. The boneless beef items were under pressure last week as well, however as we approach two holiday shortened production weeks we could begin to see some stabilization begin to surface in the boneless beef markets. The same could be said for some of the chuck and round cuts from the fed steer and heifer carcass as the upcoming slaughter reductions could help to stabilize recent price declines. Middle meats will continue to be under pressure as most holiday buying is wrapped up and we likely won’t see any major buying sprees in ribs and loins until after the holiday’s. Look for beef cutout values to be under pressure early this week and possibly finding some stabilization late. Overall though I would expect to see cutout values lower into the first week of January.
Futures Market Situation and Outlook:
For the week, December live cattle gained $1.77 to settle at $83.22, February live cattle gained $1.35 to settle at $82.80, and the April live cattle gained $1.57 to settle at $84.95. In the feeder cattle pit for the week, January feeder cattle gained $.52 to settle at $87.17, March feeder cattle gained $1.17 to settle at $86.45, and the April feeder cattle gained $.72 to settle at $87.12. The reported CME feeder cattle index for 12/11/08 was $88.57 a loss of $.01 for the day and a loss of $2.60 for the week.
Friday’s live cattle volume saw 16,596 contracts trade in the pit and 8,332 contracts trade on Globex. Live cattle open interest gained 1,377 contracts to come in this morning at 210,195. Friday’s feeder cattle volume saw 2,215 contracts trade in the pit and 986 contracts trade on Globex. Feeder cattle open interest declined 210 contracts to come in this morning at 21,437. For the week, live cattle open interest gained 729 contracts and feeder cattle open interest gained 776 contracts.
The latest commitment of traders report showed the small funds net short 15,404 contracts of live cattle futures/options a gain of 1,866 shorts. The commercial trader was net short 58,835 contracts of live cattle F/O a decline of 4,924 shorts. The index fund trader was net long 97,938 contracts of live cattle F/O a decline of 2,921 longs. The small spec trader was net short 23,699 contracts of live cattle F/O a gain of 138 shorts. In the feeder cattle, small funds were net short 4,025 contracts of feeder cattle F/O a decline of 85 shorts. The commercial trader was net long 2,415 contracts of feeder cattle F/O a gain of 181 longs. The index trader was net long 6,427 contracts of feeder cattle F/O a decline of 133 longs. The small spec trader was net short 4,816 contracts of feeder cattle F/O a gain of 132 shorts.
Live and feeder cattle futures ended the week with moderate gains on an adjustment in basis and commercial short covering. This week I think we will see futures continue to move closer to the cash market, and while we could likely see another lower cash trade I think we could again see some moderate strength in the futures. Early week support on front month live cattle will be found at $82.50 in the Dec and $82.25 in the Feb. In the feeder cattle both Jan and March will find some support at $86 early this week. Front month cattle will find resistance at $85 and front month feeders will find resistance at $88. Taking out support or resistance early this week would indicate a move of $2 in the direction of the breakout in both live and feeder cattle futures. There remain no deliveries against the December live cattle contract. Look for a $.10-$.30 higher 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:
We left last week with a moderate fed cattle trade that developed in Nebraska and Iowa at mostly $82 live and $1.30-$1.33 dressed, Colorado at $83-$84 live, Kansas at $84 live, and in Texas at $85 live. For the week the USDA was reporting 18,000 head of cattle sold in Kansas, 39,000 head in Nebraska, 2,400 head in Colorado, 19,000 head in Iowa, and 400 head in Texas. The Texas trade took place late Friday afternoon and many cattle sales won’t be reported until today, at which time I will relay the information tomorrow morning. Most of last weeks trade was $2-$3 lower on a live weight basis and $5 lower on a dressed basis, which was in line with most expectations. Texas feeders were able to hold their market at $85 as they had the smallest showlist last week. Last weeks feeder cattle market was mostly lower early, however a firmer tone did start to develop late in the week mostly on weaned calves and true yearling cattle. Moisture concerns over the southern plains wheat crop had wheat pasture buyers looking to procure lightweight cattle at lower money. Slaughter cow and bull markets were mostly $1-$2 lower as well last week. Looking into this week, cash fed cattle markets don’t look all that positive as the lower boxed beef and drop markets continues to pressure packer margins. As a result we can expect to see them keep production levels curtailed and working from contract and formula supplies. Packers will also be buying for a short kill next week and the week after due to the holiday’s, which again will give them some leverage in the market. The feeder cattle market and slaughter cow markets could find some support for this week and during the holiday’s as many auction markets will begin to shut down for Christmas and New Year’s, which will severely curtail receipts.
Cash Beef Situation and Outlook:
Last weeks cattle kill was estimated at 607,000 head, which would be 14,000 head below the previous week and 44,000 head below the same week a year ago. The weekly slaughter produced an estimated 475-mil lbs of beef compared to 484 mil lbs the week before. Year-to-date beef production is running even with a year ago at 25.099 bil lbs, with the ytd cattle slaughter running .2% below a year ago at 32.401 mil head. From Thursday to Thursday of last week choice boxed beef lost $4.22 to settle at $141.56 and select boxed beef lost $4.41 to settle at $132.73 on moderate movement of 1,066 loads of fabricated cuts. Friday saw another lower day in the beef market with the choice cutout closing $.34 lower to settle at $141.22 and the select cutout closing $.34 lower to settle at $132.39. Sales volume on Friday was light with 235 loads of beef sold (74.49 loads of choice fab cuts, 73.23 loads of select fab cuts, 33.11 loads of trim, 54.31loads of grinds). The choice/select spread settled at $8.82 steady on the day and a gain of $1.67 for the week.
The beef market was lower last week on a lack of retail and export demand. The price declines were witnessed throughout all primal areas of the carcass with chuck and round cuts leading the way down along with coarse ground markets, which shows a lack of consumer demand for these items at retail. With that said though, there was some moderate strength beginning to develop in the chuck roll and inside/bottom round markets, especially the round cuts, as they dip below year ago levels and some were looking at these items as having some value. The boneless beef items were under pressure last week as well, however as we approach two holiday shortened production weeks we could begin to see some stabilization begin to surface in the boneless beef markets. The same could be said for some of the chuck and round cuts from the fed steer and heifer carcass as the upcoming slaughter reductions could help to stabilize recent price declines. Middle meats will continue to be under pressure as most holiday buying is wrapped up and we likely won’t see any major buying sprees in ribs and loins until after the holiday’s. Look for beef cutout values to be under pressure early this week and possibly finding some stabilization late. Overall though I would expect to see cutout values lower into the first week of January.
Futures Market Situation and Outlook:
For the week, December live cattle gained $1.77 to settle at $83.22, February live cattle gained $1.35 to settle at $82.80, and the April live cattle gained $1.57 to settle at $84.95. In the feeder cattle pit for the week, January feeder cattle gained $.52 to settle at $87.17, March feeder cattle gained $1.17 to settle at $86.45, and the April feeder cattle gained $.72 to settle at $87.12. The reported CME feeder cattle index for 12/11/08 was $88.57 a loss of $.01 for the day and a loss of $2.60 for the week.
Friday’s live cattle volume saw 16,596 contracts trade in the pit and 8,332 contracts trade on Globex. Live cattle open interest gained 1,377 contracts to come in this morning at 210,195. Friday’s feeder cattle volume saw 2,215 contracts trade in the pit and 986 contracts trade on Globex. Feeder cattle open interest declined 210 contracts to come in this morning at 21,437. For the week, live cattle open interest gained 729 contracts and feeder cattle open interest gained 776 contracts.
The latest commitment of traders report showed the small funds net short 15,404 contracts of live cattle futures/options a gain of 1,866 shorts. The commercial trader was net short 58,835 contracts of live cattle F/O a decline of 4,924 shorts. The index fund trader was net long 97,938 contracts of live cattle F/O a decline of 2,921 longs. The small spec trader was net short 23,699 contracts of live cattle F/O a gain of 138 shorts. In the feeder cattle, small funds were net short 4,025 contracts of feeder cattle F/O a decline of 85 shorts. The commercial trader was net long 2,415 contracts of feeder cattle F/O a gain of 181 longs. The index trader was net long 6,427 contracts of feeder cattle F/O a decline of 133 longs. The small spec trader was net short 4,816 contracts of feeder cattle F/O a gain of 132 shorts.
Live and feeder cattle futures ended the week with moderate gains on an adjustment in basis and commercial short covering. This week I think we will see futures continue to move closer to the cash market, and while we could likely see another lower cash trade I think we could again see some moderate strength in the futures. Early week support on front month live cattle will be found at $82.50 in the Dec and $82.25 in the Feb. In the feeder cattle both Jan and March will find some support at $86 early this week. Front month cattle will find resistance at $85 and front month feeders will find resistance at $88. Taking out support or resistance early this week would indicate a move of $2 in the direction of the breakout in both live and feeder cattle futures. There remain no deliveries against the December live cattle contract. Look for a $.10-$.30 higher 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.
Friday, December 12, 2008
December 12, 2008
Good Morning from the Chicago Board of Trade,
Cash Cattle Situation and Outlook:
A light fed cattle trade began to develop late yesterday in eastern Nebraska and western Iowa with about 7,000 head of cattle changing hands at $1.33-$1.35 dressed, which would be $1-$2 lower from the bulk of last weeks trade. Southern plains packers and cattle feeders were still at odds with price negotiations this week, with packers in that part of the country bidding $83-$84 and feedlots priced at $88-$89 live. I would expect to see trade become active sometime today in Texas and Kansas at $85-$86 and in the north at the above mentioned $1.33-$1.35 dressed. The fundamentals of the market remain largely unchanged from earlier in the week with numbers of market ready fed cattle remaining manageable and carcass weights coming down (steer carcass weights @855 lbs last week vs. 860 lbs the previous week). However, beef demand, or lack there of, remains the key issue. With cutout values continuing to plummet, packers are losing margin and as such will be looking to buy cattle cheaper and keep production levels curtailed, which will keep rallies in cash fed cattle values limited for the next several weeks. Going home for the weekend, cattle selling in the salebarns across the country are lower on the fed cattle and slaughter cows, however mostly $1-$3 higher on the feeder cattle. Buyer demand for feeder cattle has improved this week despite the lower trend to the fed cattle market. I believe buyers are looking for a better fed cattle trade next spring and are anticipating a marketing hole during the April-June timeframe, and as such are trying to procure animals that will finish during that timeframe. Look for a steady to firmer trend to the feeder cattle market into the first part of next week.
Cash Beef Situation and Outlook:
Yesterdays cattle kill was estimated at 126,000 head, which would be 2,000 head above last week and 2,000 head above the same day a year ago. The week-to-date kill now stands at 481,000 head, which would be 2,000 head below the same pace 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 $2.57 lower to settle at $141.56 and the select cutout closing $.84 lower to settle at $132.73. Sales volume was good on the lower market with 367 loads of beef sold (127.79 loads of choice fab cuts, 131.37 loads of select fab cuts, 49.97 loads of trim, 58.19 loads of grinds). The choice/select spread settled at $8.83 a loss of $1.73.
The beef market was lower again yesterday with lower priced rib and loin cuts finally showing up in the USDA cutout values. Yesterday did see some price strength starting to surface throughout the round and chuck primal as production cutbacks at the packinghouse level had packers offering chuck rolls and gooseneck rounds at higher money going into retail and finding buyers at those price levels. Ground beef and boneless beef markets were trading at lower money yesterday on a lack of retail interest on these items. It is said that there is ground beef product available on both the buy side and sell side. The beef market is going to remain under pressure until we get past the first of the year and we are going to need to see some demand surface from either domestic or foreign interests before we are able to turn the market around. Look for the beef to continue to drift lower into the first part of next week.
Futures Market Situation and Outlook:
December live cattle settled at $84.47 a gain of $.50, February live cattle settled at $83.82 a gain of $.02, and the April live cattle settled at $85.67 a gain of $.20. In the feeder cattle pit, January feeder cattle settled at $87.60 a gain of $.25, March feeder cattle settled at $87.32 a gain of $.45, and the April feeder cattle settled at $87.85 a gain of $.32. The reported CME feeder cattle index for 12/10/08 was $88.58 a loss of $.16.
Yesterdays live cattle volume saw 15,001 contracts trade in the pit and 7,374 contracts trade on Globex. Live cattle open interest declined 383 contracts to come in this morning at 208,876. Yesterday’s feeder cattle volume saw 3,271 contracts trade in the pit and 1,000 contracts trade on Globex. Feeder cattle open interest gained 526 contracts to come in this morning at 21,649.
Live and feeder cattle futures managed to settle higher yesterday on moderate short covering and light fund buying. The market did start to drift lower going into the close though on weakness in the equity markets, and of course will be under pressure early this morning due to the sharply lower stock market. Spreads were active again yesterday with Dec/Feb bull spreading prominent. Dec/Feb went out yesterday trading $.65 over. The market was also selling April and buying June on spreads yesterday with that spread settling at $3.32 premium the April. Option trading was rather quiet with no real features throughout the day, although Feb atm vol did come back into 26%. The market will be very volatile today with most attention focused on the fallout on Wall Street and where the cash fed cattle market will end up trading. Cattle futures have still not separated themselves from the equity markets and this will keep market participant on edge into the first part of next week. I still like being short April cattle and long June on spreads and I want to be looking for big breaks in June live cattle to buy some futures or call options as I think we are building a marketing hole during the May/June timeframe. Look for a sharply lower open to live and feeder cattle futures (i.e. $1.00-$1.50 lower) this morning and the market will need to come back and close above $83 in Dec and Feb live and $87 in front month feeder futures in order to stave off further selling into early next week. Have a Good Weekend and Trade Well!!!
Any one wanting a more detailed report on the cattle and beef markets including fundamental, chart and technical analysis, plus spec/hedge recommendations for packers, processors, producers, and meat buyers feel free to contact me by phone or e-mail to set up a free trial.
There is risk in trading futures and options.
Have a Good Day,
Troy Vetterkind
Vetterkind Cattle Brokerage, LLC
Chicago Board of Trade
141 West Jackson Blvd.
Suite 1220A
Chicago, IL 60604
1-888-299-1477 Toll Free
1-312-896-2068 Direct
1-708-224-5985 Mobile
tvetterkind@linngroup.com
Reproduction or rebroadcast of any portion of this information is strictly prohibited without the written permission of the Linn Group, Inc. the information reflected herein is derived from sources believed to be reliable; however, this information is not guaranteed as to its accuracy or completeness. Opinions expressed are subject to change without notice. This material and any view expressed herein are provided for informational purposes only and should not be construed in any way as an inducement to buy or sell commodity futures or options contracts. The Linn Group and its officers, directors, employees and affiliates may take positions for their own accounts in contracts referred to herein. Trading futures involves risk of loss. Past performance is not indicative of future results.
Good Morning from the Chicago Board of Trade,
Cash Cattle Situation and Outlook:
A light fed cattle trade began to develop late yesterday in eastern Nebraska and western Iowa with about 7,000 head of cattle changing hands at $1.33-$1.35 dressed, which would be $1-$2 lower from the bulk of last weeks trade. Southern plains packers and cattle feeders were still at odds with price negotiations this week, with packers in that part of the country bidding $83-$84 and feedlots priced at $88-$89 live. I would expect to see trade become active sometime today in Texas and Kansas at $85-$86 and in the north at the above mentioned $1.33-$1.35 dressed. The fundamentals of the market remain largely unchanged from earlier in the week with numbers of market ready fed cattle remaining manageable and carcass weights coming down (steer carcass weights @855 lbs last week vs. 860 lbs the previous week). However, beef demand, or lack there of, remains the key issue. With cutout values continuing to plummet, packers are losing margin and as such will be looking to buy cattle cheaper and keep production levels curtailed, which will keep rallies in cash fed cattle values limited for the next several weeks. Going home for the weekend, cattle selling in the salebarns across the country are lower on the fed cattle and slaughter cows, however mostly $1-$3 higher on the feeder cattle. Buyer demand for feeder cattle has improved this week despite the lower trend to the fed cattle market. I believe buyers are looking for a better fed cattle trade next spring and are anticipating a marketing hole during the April-June timeframe, and as such are trying to procure animals that will finish during that timeframe. Look for a steady to firmer trend to the feeder cattle market into the first part of next week.
Cash Beef Situation and Outlook:
Yesterdays cattle kill was estimated at 126,000 head, which would be 2,000 head above last week and 2,000 head above the same day a year ago. The week-to-date kill now stands at 481,000 head, which would be 2,000 head below the same pace 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 $2.57 lower to settle at $141.56 and the select cutout closing $.84 lower to settle at $132.73. Sales volume was good on the lower market with 367 loads of beef sold (127.79 loads of choice fab cuts, 131.37 loads of select fab cuts, 49.97 loads of trim, 58.19 loads of grinds). The choice/select spread settled at $8.83 a loss of $1.73.
The beef market was lower again yesterday with lower priced rib and loin cuts finally showing up in the USDA cutout values. Yesterday did see some price strength starting to surface throughout the round and chuck primal as production cutbacks at the packinghouse level had packers offering chuck rolls and gooseneck rounds at higher money going into retail and finding buyers at those price levels. Ground beef and boneless beef markets were trading at lower money yesterday on a lack of retail interest on these items. It is said that there is ground beef product available on both the buy side and sell side. The beef market is going to remain under pressure until we get past the first of the year and we are going to need to see some demand surface from either domestic or foreign interests before we are able to turn the market around. Look for the beef to continue to drift lower into the first part of next week.
Futures Market Situation and Outlook:
December live cattle settled at $84.47 a gain of $.50, February live cattle settled at $83.82 a gain of $.02, and the April live cattle settled at $85.67 a gain of $.20. In the feeder cattle pit, January feeder cattle settled at $87.60 a gain of $.25, March feeder cattle settled at $87.32 a gain of $.45, and the April feeder cattle settled at $87.85 a gain of $.32. The reported CME feeder cattle index for 12/10/08 was $88.58 a loss of $.16.
Yesterdays live cattle volume saw 15,001 contracts trade in the pit and 7,374 contracts trade on Globex. Live cattle open interest declined 383 contracts to come in this morning at 208,876. Yesterday’s feeder cattle volume saw 3,271 contracts trade in the pit and 1,000 contracts trade on Globex. Feeder cattle open interest gained 526 contracts to come in this morning at 21,649.
Live and feeder cattle futures managed to settle higher yesterday on moderate short covering and light fund buying. The market did start to drift lower going into the close though on weakness in the equity markets, and of course will be under pressure early this morning due to the sharply lower stock market. Spreads were active again yesterday with Dec/Feb bull spreading prominent. Dec/Feb went out yesterday trading $.65 over. The market was also selling April and buying June on spreads yesterday with that spread settling at $3.32 premium the April. Option trading was rather quiet with no real features throughout the day, although Feb atm vol did come back into 26%. The market will be very volatile today with most attention focused on the fallout on Wall Street and where the cash fed cattle market will end up trading. Cattle futures have still not separated themselves from the equity markets and this will keep market participant on edge into the first part of next week. I still like being short April cattle and long June on spreads and I want to be looking for big breaks in June live cattle to buy some futures or call options as I think we are building a marketing hole during the May/June timeframe. Look for a sharply lower open to live and feeder cattle futures (i.e. $1.00-$1.50 lower) this morning and the market will need to come back and close above $83 in Dec and Feb live and $87 in front month feeder futures in order to stave off further selling into early next week. Have a Good Weekend and Trade Well!!!
Any one wanting a more detailed report on the cattle and beef markets including fundamental, chart and technical analysis, plus spec/hedge recommendations for packers, processors, producers, and meat buyers feel free to contact me by phone or e-mail to set up a free trial.
There is risk in trading futures and options.
Have a Good Day,
Troy Vetterkind
Vetterkind Cattle Brokerage, LLC
Chicago Board of Trade
141 West Jackson Blvd.
Suite 1220A
Chicago, IL 60604
1-888-299-1477 Toll Free
1-312-896-2068 Direct
1-708-224-5985 Mobile
tvetterkind@linngroup.com
Reproduction or rebroadcast of any portion of this information is strictly prohibited without the written permission of the Linn Group, Inc. the information reflected herein is derived from sources believed to be reliable; however, this information is not guaranteed as to its accuracy or completeness. Opinions expressed are subject to change without notice. This material and any view expressed herein are provided for informational purposes only and should not be construed in any way as an inducement to buy or sell commodity futures or options contracts. The Linn Group and its officers, directors, employees and affiliates may take positions for their own accounts in contracts referred to herein. Trading futures involves risk of loss. Past performance is not indicative of future results.
Thursday, December 11, 2008
December 11, 2008
Good Morning from the Chicago Board of Trade,
Cash Cattle Situation and Outlook:
Yesterday’s cash fed cattle market was quiet again in the feedlot trade with the salebarn cattle continuing to be under pressure. There were a few packer bids beginning to surface in the south at $84 live and in the north at $83 live and $1.33 dressed. Those bids go unmatched against feedlot offering prices of $88-$90 live and $1.40-$1.42 dressed. Both sides will ultimately have to give in again this week as I don’t see that much of a higher fed cattle trade, however I don’t see the market being as low as where the bids are at. Rather, I think we could see a $85-$86 type trade in the south and $1.35-$1.36 type trade in the north. It’s no secret that the beef is a problem here right now. Does that change after the first of the year? Yea, I think it can but going through the holidays the beef is going to be hard to move. This will keep the buyer looking to procure his live inventory at lower money until he can see some profit for his end product. The bottom line here is that we will have more fat cattle to kill from now until March, which means that we are going to need to see the beef market pick back up, otherwise rallies are going to be hard to come by. I would look for the cash market to chop around in the mid $80’s to the lower $80’s until we get into the New Year, at which time I think we could see a little better demand scenario develop to help stabilize the market.
The salebarn trade of cattle was lower again on most all classes, fats, feeders, and cows. Fed cattle selling through the Sioux Falls, SD auction market were being called $1-$2 lower at $80-$82 on the beef cattle and $4-$5 lower on the Holsteins at $65-$70. Slaughter cows were $2-$3 lower at $30-$40 on the cutters and boners and $40-$45 on the breakers. Feeder cattle were mostly $1-$2 higher across the country yesterday. Kearney, NE had approximately 4,500 head of cattle on offer yesterday with their 5 weight steers bringing $95-$110, the 6 weight steers bringing $90-$98, the 7weight steers bringing $87-$97, and the 8 weight steers bringing $86-$94. The cash feeder cattle market may have found a little support from now until after the New Year as many salebarns in the country will begin shutting down for the holidays thus reducing feeder cattle receipts for the rest of the year.
Cash Beef Situation and Outlook:
Yesterdays kill was estimated at 105,000 head, which would be 8,000 head below last week and 15,000 head below the same day a year ago. The week-to-date kill now stands at 355,000 head, which would be 4,000 head below the same pace last week with the industry looking for a 620,000 head production week. The boxed beef market was lower yesterday with the choice cutout closing $.58 lower to settle at $144.13 and the select cutout closing $.55 lower to settle at $133.57. Sales volume was good with 386 loads of beef sold (133.86 loads of choice fab cuts, 112.06 loads of select fab cuts, 34.51 loads of trim, 105.07 loads of grinds). The choice/select spread settled at $10.56 a loss of $.03.
The beef market was lower yesterday with continued discounting noted throughout the rib, loin, and round primals of the beef carcass. The chuck market was mostly steady yesterday as was the coarse ground beef market. Boneless beef markets were lower; especially the boneless cow 90’s, as processor demand wanes towards the end of the week. Domestic demand for beef remains weak and as such I think we can expect to see the beef market continue to drift lower. Packers have gotten serious about cutting kills and this will help to keep the market from falling out of bed, however over the course of the next couple of weeks I don’t see much of a rally coming out of the market. Past the first of the year I think we will see export demand pick up marginally and we will likely see a little better domestic demand as well. Here again though, we will be dealing with an increase in fed cattle production during the same timeframe, which will keep rallies in check. Our next major rally in the beef complex isn’t likely to come until mid March when buyers begin searching for middle meat items for spring/summer demand. Buyers should begin looking for pricing opportunities on middle meats via deferred month live cattle futures on any further weakness during the next 30-60 days. Export sales for the week of November 28-December 4, 2008 are as follows:
Beef: Net sales of 7,100 MT reported for Mexico (2,600 MT), Japan (1,600 MT), South Korea (1,500 MT), and Canada (1,300 MT), were partially offset by decreases for Vietnam (600 MT). Net Sales of 4,600 MT for delivery in 2009 were primarily for Mexico (2,000 MT) and Vietnam (l, 600 MT). Exports of 7,700 MT were mainly to Mexico (3,200 MT), Canada (1,500 MT), Japan (900 MT), South Korea (800 MT), and Vietnam (500 MT).
Futures Market Situation and Outlook:
December live cattle settled at $83.97 a gain of $1.37, February live cattle settled at $83.80 a gain of $1.52, and the April live cattle settled at $85.47 a gain of $1.30. In the feeder cattle pit, January feeder cattle settled at $87.35 a gain of $.80, March feeder cattle settled at $86.87 a gain of $.77, and the April feeder cattle settled at $87.52 a gain of $.35. The reported CME feeder cattle index for 12/9/08 was $88.74 a loss of $.51.
Yesterdays live cattle volume saw 13,798 contracts trade in the pit and 8,594 contracts trade on Globex. Live cattle open interest declined 690 contracts to come in this morning at 209,239. Yesterday’s feeder cattle volume saw 3,189 contracts trade in the pit and 1,719 contracts trade on Globex. Feeder cattle open interest declined 22 contracts to come in this morning at 21,119.
Live and feeder cattle futures settled sharply higher yesterday on oversold market conditions, discounts to cash, and general short covering and moderate fund buying. The market acted pretty good yesterday and holding front month live cattle futures above the $83 area keeps the door open to $85 in the near term, where we will run into our next area of resistance. The same can be said for front month feeder cattle holding above the $87 area, which would keep them open to the next area of resistance at $90. This will very likely be our trading range for the next couple of weeks, $80-$85 in the fat cattle and $85-$90 in the feeder cattle. The USDA released supply/demand numbers this morning, which look to be a little bearish to the corn and wheat markets due to increased carryout numbers. In the meats, the USDA lowered 08/09 beef production 110 mil lbs each. They raised this years import 9 mil lbs and left next years import numbers alone. Exports for this year were raised 19 mil lbs and they left next years number alone. The USDA also lowered domestic consumption 120 mil and 110 mil respectively for 08 and 09. Outside commodity markets are mostly higher this morning (i.e. metals/energies) with the Dollar Index sharply lower. The stock futures are pointing to a modestly lower open this morning. Cattle futures will likely open $.10-$.20 lower, and I would be interested in buying a lower open. Trade Well!!!
Any one wanting a more detailed report on the cattle and beef markets including fundamental, chart and technical analysis, plus spec/hedge recommendations for packers, processors, producers, and meat buyers feel free to contact me by phone or e-mail to set up a free trial.
There is risk in trading futures and options.
Have a Good Day,
Troy Vetterkind
Vetterkind Cattle Brokerage, LLC
Chicago Board of Trade
141 West Jackson Blvd.
Suite 1220A
Chicago, IL 60604
1-888-299-1477 Toll Free
1-312-896-2068 Direct
1-708-224-5985 Mobile
tvetterkind@linngroup.com
Reproduction or rebroadcast of any portion of this information is strictly prohibited without the written permission of the Linn Group, Inc. the information reflected herein is derived from sources believed to be reliable; however, this information is not guaranteed as to its accuracy or completeness. Opinions expressed are subject to change without notice. This material and any view expressed herein are provided for informational purposes only and should not be construed in any way as an inducement to buy or sell commodity futures or options contracts. The Linn Group and its officers, directors, employees and affiliates may take positions for their own accounts in contracts referred to herein. Trading futures involves risk of loss. Past performance is not indicative of future results.
Good Morning from the Chicago Board of Trade,
Cash Cattle Situation and Outlook:
Yesterday’s cash fed cattle market was quiet again in the feedlot trade with the salebarn cattle continuing to be under pressure. There were a few packer bids beginning to surface in the south at $84 live and in the north at $83 live and $1.33 dressed. Those bids go unmatched against feedlot offering prices of $88-$90 live and $1.40-$1.42 dressed. Both sides will ultimately have to give in again this week as I don’t see that much of a higher fed cattle trade, however I don’t see the market being as low as where the bids are at. Rather, I think we could see a $85-$86 type trade in the south and $1.35-$1.36 type trade in the north. It’s no secret that the beef is a problem here right now. Does that change after the first of the year? Yea, I think it can but going through the holidays the beef is going to be hard to move. This will keep the buyer looking to procure his live inventory at lower money until he can see some profit for his end product. The bottom line here is that we will have more fat cattle to kill from now until March, which means that we are going to need to see the beef market pick back up, otherwise rallies are going to be hard to come by. I would look for the cash market to chop around in the mid $80’s to the lower $80’s until we get into the New Year, at which time I think we could see a little better demand scenario develop to help stabilize the market.
The salebarn trade of cattle was lower again on most all classes, fats, feeders, and cows. Fed cattle selling through the Sioux Falls, SD auction market were being called $1-$2 lower at $80-$82 on the beef cattle and $4-$5 lower on the Holsteins at $65-$70. Slaughter cows were $2-$3 lower at $30-$40 on the cutters and boners and $40-$45 on the breakers. Feeder cattle were mostly $1-$2 higher across the country yesterday. Kearney, NE had approximately 4,500 head of cattle on offer yesterday with their 5 weight steers bringing $95-$110, the 6 weight steers bringing $90-$98, the 7weight steers bringing $87-$97, and the 8 weight steers bringing $86-$94. The cash feeder cattle market may have found a little support from now until after the New Year as many salebarns in the country will begin shutting down for the holidays thus reducing feeder cattle receipts for the rest of the year.
Cash Beef Situation and Outlook:
Yesterdays kill was estimated at 105,000 head, which would be 8,000 head below last week and 15,000 head below the same day a year ago. The week-to-date kill now stands at 355,000 head, which would be 4,000 head below the same pace last week with the industry looking for a 620,000 head production week. The boxed beef market was lower yesterday with the choice cutout closing $.58 lower to settle at $144.13 and the select cutout closing $.55 lower to settle at $133.57. Sales volume was good with 386 loads of beef sold (133.86 loads of choice fab cuts, 112.06 loads of select fab cuts, 34.51 loads of trim, 105.07 loads of grinds). The choice/select spread settled at $10.56 a loss of $.03.
The beef market was lower yesterday with continued discounting noted throughout the rib, loin, and round primals of the beef carcass. The chuck market was mostly steady yesterday as was the coarse ground beef market. Boneless beef markets were lower; especially the boneless cow 90’s, as processor demand wanes towards the end of the week. Domestic demand for beef remains weak and as such I think we can expect to see the beef market continue to drift lower. Packers have gotten serious about cutting kills and this will help to keep the market from falling out of bed, however over the course of the next couple of weeks I don’t see much of a rally coming out of the market. Past the first of the year I think we will see export demand pick up marginally and we will likely see a little better domestic demand as well. Here again though, we will be dealing with an increase in fed cattle production during the same timeframe, which will keep rallies in check. Our next major rally in the beef complex isn’t likely to come until mid March when buyers begin searching for middle meat items for spring/summer demand. Buyers should begin looking for pricing opportunities on middle meats via deferred month live cattle futures on any further weakness during the next 30-60 days. Export sales for the week of November 28-December 4, 2008 are as follows:
Beef: Net sales of 7,100 MT reported for Mexico (2,600 MT), Japan (1,600 MT), South Korea (1,500 MT), and Canada (1,300 MT), were partially offset by decreases for Vietnam (600 MT). Net Sales of 4,600 MT for delivery in 2009 were primarily for Mexico (2,000 MT) and Vietnam (l, 600 MT). Exports of 7,700 MT were mainly to Mexico (3,200 MT), Canada (1,500 MT), Japan (900 MT), South Korea (800 MT), and Vietnam (500 MT).
Futures Market Situation and Outlook:
December live cattle settled at $83.97 a gain of $1.37, February live cattle settled at $83.80 a gain of $1.52, and the April live cattle settled at $85.47 a gain of $1.30. In the feeder cattle pit, January feeder cattle settled at $87.35 a gain of $.80, March feeder cattle settled at $86.87 a gain of $.77, and the April feeder cattle settled at $87.52 a gain of $.35. The reported CME feeder cattle index for 12/9/08 was $88.74 a loss of $.51.
Yesterdays live cattle volume saw 13,798 contracts trade in the pit and 8,594 contracts trade on Globex. Live cattle open interest declined 690 contracts to come in this morning at 209,239. Yesterday’s feeder cattle volume saw 3,189 contracts trade in the pit and 1,719 contracts trade on Globex. Feeder cattle open interest declined 22 contracts to come in this morning at 21,119.
Live and feeder cattle futures settled sharply higher yesterday on oversold market conditions, discounts to cash, and general short covering and moderate fund buying. The market acted pretty good yesterday and holding front month live cattle futures above the $83 area keeps the door open to $85 in the near term, where we will run into our next area of resistance. The same can be said for front month feeder cattle holding above the $87 area, which would keep them open to the next area of resistance at $90. This will very likely be our trading range for the next couple of weeks, $80-$85 in the fat cattle and $85-$90 in the feeder cattle. The USDA released supply/demand numbers this morning, which look to be a little bearish to the corn and wheat markets due to increased carryout numbers. In the meats, the USDA lowered 08/09 beef production 110 mil lbs each. They raised this years import 9 mil lbs and left next years import numbers alone. Exports for this year were raised 19 mil lbs and they left next years number alone. The USDA also lowered domestic consumption 120 mil and 110 mil respectively for 08 and 09. Outside commodity markets are mostly higher this morning (i.e. metals/energies) with the Dollar Index sharply lower. The stock futures are pointing to a modestly lower open this morning. Cattle futures will likely open $.10-$.20 lower, and I would be interested in buying a lower open. Trade Well!!!
Any one wanting a more detailed report on the cattle and beef markets including fundamental, chart and technical analysis, plus spec/hedge recommendations for packers, processors, producers, and meat buyers feel free to contact me by phone or e-mail to set up a free trial.
There is risk in trading futures and options.
Have a Good Day,
Troy Vetterkind
Vetterkind Cattle Brokerage, LLC
Chicago Board of Trade
141 West Jackson Blvd.
Suite 1220A
Chicago, IL 60604
1-888-299-1477 Toll Free
1-312-896-2068 Direct
1-708-224-5985 Mobile
tvetterkind@linngroup.com
Reproduction or rebroadcast of any portion of this information is strictly prohibited without the written permission of the Linn Group, Inc. the information reflected herein is derived from sources believed to be reliable; however, this information is not guaranteed as to its accuracy or completeness. Opinions expressed are subject to change without notice. This material and any view expressed herein are provided for informational purposes only and should not be construed in any way as an inducement to buy or sell commodity futures or options contracts. The Linn Group and its officers, directors, employees and affiliates may take positions for their own accounts in contracts referred to herein. Trading futures involves risk of loss. Past performance is not indicative of future results.
Tuesday, December 9, 2008
December 9, 2008
Good Morning from the Chicago Board of Trade,
Cash Cattle Situation and Outlook:
The cash fed cattle market was non-existent yesterday with packer bids poorly defined and feedlot offering prices beginning the week at $89-$90 live and $1.40 plus dressed. A look at last weeks feedlot movement shows Texas/OK/NM feedlots selling 39,854 head of fed cattle (42,535 the week before) for mostly $87 live, with late sales as low as $85-$86. Kansas feedlots sold 29,005 head of fed cattle (44,080) for $85-$87 live and $1.36-$1.37 ½ dressed, Nebraska feedlots sold 41,713 head of fed cattle (62,038) for $85-$86 live and $1.36 dressed, Colorado feedlots sold 5,258 head of fed cattle (4,398) for $85 live and $1.37 dressed, and Iowa/MN feedlots sold 26,833 head of fed cattle (25,020) for $84-$85 live and $1.36-$1.37 dressed. Movement looked moderate last week, which is giving us a slightly larger showlist offering for this week in Kansas and Nebraska, while numbers for sale in Texas look to be a little smaller. The beef market still remains sluggish and as a result packers are already talking about cutting hours out of production later this week. For right now, until I see some better demand out of the beef market or we get an incredible rally on the futures board, I am going to call for a steady to $1 lower fed cattle market that trades mostly $86-$87 in the south and $1.35-$1.36 dressed in the north.
In auction market news, fed cattle selling in the upper Midwest salebarns were trading lower keeping pace with last weeks declines in the feedlot trade. Beef steers were bringing $78-$83 with the Holstein steers bringing $70-$72. Slaughter cows were lower bringing $29-$41 on the thin cows and $42-$46 on the fat cows. Oklahoma City had approximately 14,000 head of feeder cattle on offer yesterday with that market being called $1-$3 lower early in the day and moving to $1 lower late with the rally on the futures board. The majority of the 500 lbs steers in OKC yesterday were bringing $93-$103, the 600 lbs and 700 lbs steers were bringing $87-$93, and the 800 lbs steers were bringing $83-$90. I would look for continued weakness in the feeder cattle until midweek depending on what the futures board does.
Cash Beef Situation and Outlook:
Yesterdays kill was estimated at 127,000 head, which would be 7,000 head above the same day a week ago and 2,000 head below the same day a year ago. The industry will be looking for a 620,000 head production week. The boxed beef market was mixed yesterday with the choice cutout closing $.87 higher to settle at $144.02 and the select cutout closing $.99 lower to settle at $135.01. Sales volume was light with 259 loads of beef sold (93.70 loads of choice fab cuts, 91.33 loads of select fab cuts, 13.30 loads of trim, 60.50 loads of grinds). The choice/select spread settled at $9.01 a gain of $1.86.
The beef market was mostly lower yesterday again yesterday with just a few pockets of strength being noted in the choice/select/no-roll chuck roll market. The rest of the complex looked to be under pressure, especially in items like ribeyes, knuckles, inside rounds, and short loins as retail demand for said cuts remains sluggish. Coarse ground markets were under pressure from last week as well as consumer pulls of ground beef over the weekend were slow. Yesterdays boneless beef markets were for the most part steady with very little activity, however with weakness in ground beef sales, one would have to assume that boneless markets would be under pressure towards the middle of the week as well. Imported beef markets were higher yesterday as a lack of product from overseas and recent strength in the U.S. dollar had importers bidding higher on foreign product. I will continue to look for a softer undertone to the cash beef market until at least late in the week.
Futures Market Situation and Outlook:
December live cattle settled at $83.10 a gain of $1.55, February live cattle settled at $82.67 a gain of $1.22, and the April live cattle settled at $84.80 a gain of $1.42. In the feeder cattle pit, January feeder cattle settled at $87.90 a gain of $1.25, March feeder cattle settled at $86.92 a gain of $1.65, and the April feeder cattle settled at $87.92 a gain of $1.52. The reported CME feeder cattle index for 12/5/08 was $89.78 a loss of $1.39.
Yesterdays live cattle volume saw 23,671 contracts trade in the pit and 8,491 contracts trade on Globex. Live cattle open interest gained 1,954 contracts to come in this morning at 211,420. Yesterday’s feeder cattle volume saw 3,746 contracts trade in the pit and 1,018 contracts trade on Globex. Feeder cattle open interest gained 221 contracts to come in this morning at 20,882.
Live and feeder cattle futures opened sharply higher yesterday and were able to hold onto most of those gains going into the close as ideas the market was oversold and too discount to the current cash market along with higher equity and outside commodity markets all combined for the higher trade. Yesterday was first notice day for December live cattle with no deliveries posted against the front month contract. This morning we find stock futures marginally lower along with some of the other commodity markets, which could give us a softer open to live and feeder cattle futures. Options’ trading was rather quiet yesterday with an even mix of calls and puts trading and no real feature throughout the day. Option volatility did increase again with most Feb at the money volatility trading around 28% and April and June vol trading around 25%-26%. There is probably some opportunity there, whether you are bullish or bearish to sell some slightly out of the money calls or puts and cover them with futures to take advantage of the volatility increase. The futures market could see some further strength this week as front month contracts narrow the basis between cash. There are some gaps left underneath the market from yesterday’s higher open that could be filled today at $82.50 in the Dec and $82.30 in the Feb. Otherwise there will be support at Friday’s lows of $80.65 in Dec, $80.60 in the Feb, and $85.45 in the Jan feeders. Resistance for today will be encountered at $83.70 in Dec live, $83.60 in Feb live, and $89.50 in Jan feeders. Look for a $.10-$.20 lower open to live and feeder cattle futures this morning. Trade Well!!!
Any one wanting a more detailed report on the cattle and beef markets including fundamental, chart and technical analysis, plus spec/hedge recommendations for packers, processors, producers, and meat buyers feel free to contact me by phone or e-mail to set up a free trial.
There is risk in trading futures and options.
Have a Good Day,
Troy Vetterkind
Vetterkind Cattle Brokerage, LLC
Chicago Board of Trade
141 West Jackson Blvd.
Suite 1220A
Chicago, IL 60604
1-888-299-1477 Toll Free
1-312-896-2068 Direct
1-708-224-5985 Mobile
tvetterkind@linngroup.com
Reproduction or rebroadcast of any portion of this information is strictly prohibited without the written permission of the Linn Group, Inc. the information reflected herein is derived from sources believed to be reliable; however, this information is not guaranteed as to its accuracy or completeness. Opinions expressed are subject to change without notice. This material and any view expressed herein are provided for informational purposes only and should not be construed in any way as an inducement to buy or sell commodity futures or options contracts. The Linn Group and its officers, directors, employees and affiliates may take positions for their own accounts in contracts referred to herein. Trading futures involves risk of loss. Past performance is not indicative of future results.
Good Morning from the Chicago Board of Trade,
Cash Cattle Situation and Outlook:
The cash fed cattle market was non-existent yesterday with packer bids poorly defined and feedlot offering prices beginning the week at $89-$90 live and $1.40 plus dressed. A look at last weeks feedlot movement shows Texas/OK/NM feedlots selling 39,854 head of fed cattle (42,535 the week before) for mostly $87 live, with late sales as low as $85-$86. Kansas feedlots sold 29,005 head of fed cattle (44,080) for $85-$87 live and $1.36-$1.37 ½ dressed, Nebraska feedlots sold 41,713 head of fed cattle (62,038) for $85-$86 live and $1.36 dressed, Colorado feedlots sold 5,258 head of fed cattle (4,398) for $85 live and $1.37 dressed, and Iowa/MN feedlots sold 26,833 head of fed cattle (25,020) for $84-$85 live and $1.36-$1.37 dressed. Movement looked moderate last week, which is giving us a slightly larger showlist offering for this week in Kansas and Nebraska, while numbers for sale in Texas look to be a little smaller. The beef market still remains sluggish and as a result packers are already talking about cutting hours out of production later this week. For right now, until I see some better demand out of the beef market or we get an incredible rally on the futures board, I am going to call for a steady to $1 lower fed cattle market that trades mostly $86-$87 in the south and $1.35-$1.36 dressed in the north.
In auction market news, fed cattle selling in the upper Midwest salebarns were trading lower keeping pace with last weeks declines in the feedlot trade. Beef steers were bringing $78-$83 with the Holstein steers bringing $70-$72. Slaughter cows were lower bringing $29-$41 on the thin cows and $42-$46 on the fat cows. Oklahoma City had approximately 14,000 head of feeder cattle on offer yesterday with that market being called $1-$3 lower early in the day and moving to $1 lower late with the rally on the futures board. The majority of the 500 lbs steers in OKC yesterday were bringing $93-$103, the 600 lbs and 700 lbs steers were bringing $87-$93, and the 800 lbs steers were bringing $83-$90. I would look for continued weakness in the feeder cattle until midweek depending on what the futures board does.
Cash Beef Situation and Outlook:
Yesterdays kill was estimated at 127,000 head, which would be 7,000 head above the same day a week ago and 2,000 head below the same day a year ago. The industry will be looking for a 620,000 head production week. The boxed beef market was mixed yesterday with the choice cutout closing $.87 higher to settle at $144.02 and the select cutout closing $.99 lower to settle at $135.01. Sales volume was light with 259 loads of beef sold (93.70 loads of choice fab cuts, 91.33 loads of select fab cuts, 13.30 loads of trim, 60.50 loads of grinds). The choice/select spread settled at $9.01 a gain of $1.86.
The beef market was mostly lower yesterday again yesterday with just a few pockets of strength being noted in the choice/select/no-roll chuck roll market. The rest of the complex looked to be under pressure, especially in items like ribeyes, knuckles, inside rounds, and short loins as retail demand for said cuts remains sluggish. Coarse ground markets were under pressure from last week as well as consumer pulls of ground beef over the weekend were slow. Yesterdays boneless beef markets were for the most part steady with very little activity, however with weakness in ground beef sales, one would have to assume that boneless markets would be under pressure towards the middle of the week as well. Imported beef markets were higher yesterday as a lack of product from overseas and recent strength in the U.S. dollar had importers bidding higher on foreign product. I will continue to look for a softer undertone to the cash beef market until at least late in the week.
Futures Market Situation and Outlook:
December live cattle settled at $83.10 a gain of $1.55, February live cattle settled at $82.67 a gain of $1.22, and the April live cattle settled at $84.80 a gain of $1.42. In the feeder cattle pit, January feeder cattle settled at $87.90 a gain of $1.25, March feeder cattle settled at $86.92 a gain of $1.65, and the April feeder cattle settled at $87.92 a gain of $1.52. The reported CME feeder cattle index for 12/5/08 was $89.78 a loss of $1.39.
Yesterdays live cattle volume saw 23,671 contracts trade in the pit and 8,491 contracts trade on Globex. Live cattle open interest gained 1,954 contracts to come in this morning at 211,420. Yesterday’s feeder cattle volume saw 3,746 contracts trade in the pit and 1,018 contracts trade on Globex. Feeder cattle open interest gained 221 contracts to come in this morning at 20,882.
Live and feeder cattle futures opened sharply higher yesterday and were able to hold onto most of those gains going into the close as ideas the market was oversold and too discount to the current cash market along with higher equity and outside commodity markets all combined for the higher trade. Yesterday was first notice day for December live cattle with no deliveries posted against the front month contract. This morning we find stock futures marginally lower along with some of the other commodity markets, which could give us a softer open to live and feeder cattle futures. Options’ trading was rather quiet yesterday with an even mix of calls and puts trading and no real feature throughout the day. Option volatility did increase again with most Feb at the money volatility trading around 28% and April and June vol trading around 25%-26%. There is probably some opportunity there, whether you are bullish or bearish to sell some slightly out of the money calls or puts and cover them with futures to take advantage of the volatility increase. The futures market could see some further strength this week as front month contracts narrow the basis between cash. There are some gaps left underneath the market from yesterday’s higher open that could be filled today at $82.50 in the Dec and $82.30 in the Feb. Otherwise there will be support at Friday’s lows of $80.65 in Dec, $80.60 in the Feb, and $85.45 in the Jan feeders. Resistance for today will be encountered at $83.70 in Dec live, $83.60 in Feb live, and $89.50 in Jan feeders. Look for a $.10-$.20 lower open to live and feeder cattle futures this morning. Trade Well!!!
Any one wanting a more detailed report on the cattle and beef markets including fundamental, chart and technical analysis, plus spec/hedge recommendations for packers, processors, producers, and meat buyers feel free to contact me by phone or e-mail to set up a free trial.
There is risk in trading futures and options.
Have a Good Day,
Troy Vetterkind
Vetterkind Cattle Brokerage, LLC
Chicago Board of Trade
141 West Jackson Blvd.
Suite 1220A
Chicago, IL 60604
1-888-299-1477 Toll Free
1-312-896-2068 Direct
1-708-224-5985 Mobile
tvetterkind@linngroup.com
Reproduction or rebroadcast of any portion of this information is strictly prohibited without the written permission of the Linn Group, Inc. the information reflected herein is derived from sources believed to be reliable; however, this information is not guaranteed as to its accuracy or completeness. Opinions expressed are subject to change without notice. This material and any view expressed herein are provided for informational purposes only and should not be construed in any way as an inducement to buy or sell commodity futures or options contracts. The Linn Group and its officers, directors, employees and affiliates may take positions for their own accounts in contracts referred to herein. Trading futures involves risk of loss. Past performance is not indicative of future results.
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