February 11, 2009


Good Morning from the Chicago Board of Trade,

Cash Cattle Situation and Outlook:

The cash fed cattle market was untested yesterday with no real bids evident as of late yesterday and cattle feeders priced at $86 live and $1.36-$1.37 dressed. A late week trade is expected at prices steady to higher with last week providing the futures board can hold onto its early week gains. Packers will be cutting kills late in the week, which could keep them less active in the market late in the week. Fed cattle selling through the Midwest auction markets yesterday were a little softer, as were slaughter cows. Feeder cattle remain firm with most auctions that I canvass across the country reporting $1-$3 higher markets.

Cash Beef Situation and Outlook:

Yesterday’s cattle kill was estimated at 127,000 head, which would be 3,000 head above last week and 4,000 head above the same day a year ago. The week-to-date kill now stands at 252,000 head, which would be 3,000 head above the same period last week with the industry looking for a 610,000 head production week. The boxed beef market was higher yesterday with the choice cutout closing $.39 higher to settle at $137.15 and the select cutout closing $.54 higher to settle at $134.83. Sales volume was light with 236 loads of beef sold (108.44 loads of choice fab cuts, 70.72 loads of select fab cuts, 23.52 loads of trim, 33.70 loads of grinds). The choice/select spread settled at $2.32 a loss of $.15.

The beef market was modestly higher yesterday on some renewed buying in choice/select rib roasts, clods, inside/gooseneck rounds, strips, and top butts. The top butt was responsible for leading us higher yesterday as there is good demand from a few of the major restaurant chains in the country that are featuring sirloin steak meal deals for the next couple of weeks. For the most part the ground beef and boneless beef complexes looked steady. Look for sideways price action in the boxed beef complex into the end of the week.

Futures Market Situation and Outlook:

February live cattle settled at $84.77 a gain of $.07, April live cattle settled at $88.05 a gain of $.30, and the June live cattle settled at $85.40 a gain of $.47. In the feeder cattle pit, March feeder cattle settled at $95.70 a gain of $.15, April feeder cattle settled at $97.10 a loss of $.25, and the May feeder cattle settled at $98.47 a loss of $.05. The reported CME feeder cattle index for 2/9/09 was $94.66 a gain of $.53. Live cattle spreads: Feb/April settled at -$3.27 a loss of $.22, April/June settled at $2.65 a loss of $.17, and June/August settled at -$.80 steady on the day. Feeder cattle spreads: March/April settled at -$1.40 a gain of $.40, April/May settled at -$1.37 a loss of $.20, and the May/August settled at -$2.00 a loss of $.02.

Yesterdays live cattle volume saw 26,164 contracts trade in the pit and 21,188 trade on Globex. Live cattle open interest declined 2,085 contracts to come in this morning at 202,092. Yesterday’s feeder cattle volume saw 5,021 contracts trade in the pit and 1,885 contracts trade on Globex. Feeder cattle open interest gained 262 contracts to come in this morning at 22,160.

Live cattle futures settled with modest gains yesterday with feeder cattle closing with moderate losses despite the collapse in the stock market. Open interest went down 2,000 cars yesterday with half of the daily trading volume being executed on the screen, which would lead one to believe that some fund was covering shorts. The futures market continues to respect overhead resistance at $85 in Feb live cattle and $96 in March feeders. A close above these price levels would indicate higher markets into next week. Holding below this resistance keeps $82 in Feb live and $93 in March feeders in the cards. There were no deliveries against the Feb live cattle last night. 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.