Vetterkind Opening Cattle Report

2009-02-13T06:46:00.000-08:00

February 13, 2009

Good Morning from the Chicago Board of Trade,

Cash Cattle Situation and Outlook:

The cash fed cattle market was mostly untested again yesterday except for a handful of cattle that changed hands in eastern Nebraska and western Iowa at steady money with last week. USDA reported 3,795 head of fed cattle sold in Nebraska at $1.30-$1.31 dressed in their afternoon report yesterday afternoon. The rest of cattle feeding country was quiet with packer bids of $80/$1.30 remaining unmatched against feedlot asking prices of $86/$1.36-$1.37. I would assume we will see trade turn active by this afternoon in all feeding areas, and the way it would appear right now it shouldn’t be any worse than steady with last week given a February board priced at $84.35. Packer margins took it on the chin again this week and it would seem like they would want to try and buy cattle cheaper this week but I don’t imagine feeders are going to want to sell many cattle at lower money with the futures holding above $84. There still haven’t been any deliveries against Feb and depending on how well the packing community can tow the line this week in terms of spending, perhaps we start seeing some deliveries next week. Going home for the weekend, slaughter cows remain under pressure as do fat cattle selling in the auction markets. Feeder cattle are strong with demand rated as aggressive by several of the major feeding companies. I would look for more of the same next week.

Cash Beef Situation and Outlook:

Yesterdays kill was estimated at 122,000 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 494,000 head, which is running 3,000 head above last weeks pace with the industry looking for a 610,000 head production week. The boxed beef market was mixed yesterday with the choice cutout closing $.30 lower to settle at $136.12 and the select cutout closing $.05 higher to settle at $135.25. Sales volume was light with 227 loads of beef sold (103.86 loads of choice fab cuts, 56.82 loads of select fab cuts, 24.75 loads of trim, 41.28 loads of grinds). The choice/select spread settled at $.87 a loss of $.35.

The beef market was mostly steady yesterday on light trading volume. Buyer demand was rated as slow yesterday and as such there weren’t many features to speak of. There was some light discounting noted on many items throughout the beef carcass as a result. Ground beef markets were also under some pressure yesterday, however there were a few instances of higher money being paid on trimming’s, especially the fed cattle 50’s, where talk of production cuts into next week had grinders looking to secure product. I will continue to call for a sideways to lower beef market into next week.

Futures Market Situation and Outlook:

February live cattle settled at $84.35 a loss of $.17, April live cattle settled at $87.50 a loss of $.10, and the June live cattle settled at $85.22 a gain of $.05. In the feeder cattle pit, March feeder cattle settled at $95.15 a loss of $.25, April feeder cattle settled at $96.15 a loss of $.25, and the May feeder cattle settled at $97.80 a loss of $.10. The reported CME feeder cattle index for 2/11/09 was $95.01 a gain of $.18. Live cattle spreads: Feb/April settled at -$3.15 a loss of $.07, April/June settled at $2.27 a loss of $.15, and June/August settled at -$.92 a loss of $.12.

Yesterdays live cattle volume saw 18,132 contracts trade in the pit and 10,412 contracts trade on Globex. Live cattle open interest gained 398 contracts to come in this morning at 201,864. Yesterday’s feeder cattle volume saw 5,061 contracts trade in the pit and 1,344 contracts trade on Globex. Feeder cattle open interest gained 329 contracts to come in this morning at 21,777.

Cattle futures were under pressure most of the session yesterday on continued concerns over the economy and the lower stock futures. Futures tested some support levels under the market early yesterday and held, which prompted a short covering rally going into the close. I probably wouldn’t expect to see much action today in the futures until more is known about this week’s cash trade of fed cattle. We will probably continue to follow the stock market. I think it will be important for Feb live cattle to hold $84 and April cattle to hold $87 by the close today in order to stave off further selling into next week. March feeders will need to hold above $94 today in order to keep from seeing a couple dollar break next week. Back month feeders continue to look positive closing above $100. There remain no deliveries against the Feb live cattle contract. Keep in mind we will be closed Monday in observance of Presidents Day, we will be on normal trading hours today though. Look for a $.10-$.20 higher open to live and feeder cattle futures today. Have a Good Weekend and Trade Well!!!

Any one wanting a more detailed report on the cattle and beef markets including fundamental, chart and technical analysis, plus spec/hedge recommendations for packers, processors, producers, and meat buyers feel free to contact me by phone or e-mail to set up a free trial.

There is risk in trading futures and options.

Have a Good Day,

Troy Vetterkind
Vetterkind Cattle Brokerage, LLC
Chicago Board of Trade
141 West Jackson Blvd.
Suite 1220A
Chicago, IL 60604
1-888-299-1477 Toll Free
1-312-896-2068 Direct
1-708-224-5985 Mobile
tvetterkind@linngroup.com

Reproduction or rebroadcast of any portion of this information is strictly prohibited without the written permission of the Linn Group, Inc. the information reflected herein is derived from sources believed to be reliable; however, this information is not guaranteed as to its accuracy or completeness. Opinions expressed are subject to change without notice. This material and any view expressed herein are provided for informational purposes only and should not be construed in any way as an inducement to buy or sell commodity futures or options contracts. The Linn Group and its officers, directors, employees and affiliates may take positions for their own accounts in contracts referred to herein. Trading futures involves risk of loss. Past performance is not indicative of future results.

2009-02-12T06:47:00.000-08:00

February 12, 2009

Good Morning from the Chicago Board of Trade,

Cash Cattle Situation and Outlook:

The cash fed cattle trade was at a standstill yesterday with packer bids of $80-$81 live and $1.30 dressed going unmatched against feedlot offering prices of $86 live and $1.36-$1.37 dressed. We could begin to see a few cattle trade as early as today, however I would expect to see the bulk of business to wait until Friday. Packer margins have been suffering the last week or so and as such they are beginning to take hours out of weekly production schedules. The beef is still acting sluggish, although we have had good movement the last several sessions, showlists are mostly larger this week, and I wasn’t very impressed with how the board closed yesterday, so I don’t know high we can get fat cattle sold this week. They are likely going to try to press the futures lower today and tomorrow, which could break sellers resolve. Fed cattle selling in Sioux Falls, SD yesterday were trading lower with the beef fats bringing $78-$80 and the Holstein fats bringing $67-$72. Slaughter cows were lower yesterday as well with the bulk of the cutter and boning utility cows bringing $40-$46, and the breakers bringing $48-$52. Feeder cattle continue to trade mostly higher on all classes, however I did notice a few pockets of weakness on cattle weighing over 800 lbs. El Reno, OK had their weekly feeder sale yesterday with about 5,000 head of cattle on offer and a market they called mostly steady to $1 higher. In El Reno yesterday the 5 weight steer calves were bringing $104-$115, 6 weight steers were bringing $96-$107, 7 weight steers were bringing $94-$97, and the weight steers were bringing $87-$95.

Cash Beef Situation and Outlook:

Yesterday’s cattle kill was estimated at 120,000 head, which would be 2,000 head below last week and 2,000 head below the same day a year ago. The week-to-date kill now stands at 372,000 head, which would be 1,000 head above the same period a week ago with the industry looking for a 610,000 head production week. The boxed beef market was mixed yesterday with the choice cutout closing $.73 lower to settle at $136.42 and the select cutout closing $.37 higher to settle at $135.20. Sales volume was good with 416 loads of beef sold (203.09 loads of choice fab cuts, 82.88 loads of select fab cuts, 42.05 loads of trim, 87.57 loads of grinds). The choice/select spread settled at $1.22 a loss of $1.10.

The beef market was a little sluggish again yesterday, as demand for most cuts of beef remains flat. Packers needed to discount clods, outside/gooseneck rounds, and PSMO’s. However, the lower price levels on these items did attract some extra business as we saw trading volumes pick up. Ground beef values were mostly steady yesterday and boneless beef items, both domestic and imported were trading lower. The exception was fed cattle 50’s where talk of packers cutting kills late this week and next supported that market. Continue to look for a steady to lower beef trade into early next week. Beef exports for the week of January 30-Februrary 5, 2009 are as follows:
Beef: Net sales of 9,300 MT were primarily for Mexico (2,300 MT), Vietnam (2,300 MT), Japan (1,900 MT), Canada (1,600 MT), the Netherlands (800 MT), and Hong Kong (600 MT). Decreases were reported for South Korea (900 MT). Exports of 7,900 MT were mainly to Mexico (3,100 MT), Canada (1,200 MT), South Korea (1,100 MT), Vietnam (800 MT), and Japan (700 MT).
Futures Market Situation and Outlook:

February live cattle settled at $84.52 a loss of $.25, April live cattle settled at $87.60 a loss of $.45, June live cattle settled at $85.17 a loss of $.22. In the feeder cattle pit, March feeder cattle settled at $95.40 a loss of $.30, April feeder cattle settled at $96.40 a loss of $.70, and May feeder cattle settled at $97.90 a loss of $.57. The reported CME feeder cattle index for 2/10/09 was $94.83 a gain of $.17. Live cattle spreads: Feb/April settled at -$3.07 a gain of $.20, April/June settled at $2.42 a loss of $.22, June/August settled at -$.80 steady on the day. Feeder cattle spreads: March/April settled at -$1.00 a gain of $.40, April/May settled at -$1.50 a loss of $.12, May/August settled at -$1.85 a gain of $.15.

Yesterdays live cattle volume saw 13,529 contracts trade in the pit and 8,650 contracts trade on Globex. Live cattle open interest declined 539 contracts to come in this morning at 201,466. Yesterday’s feeder cattle volume saw 4,879 contracts trade in the pit and 1,538 contracts trade on Globex. Feeder cattle open interest declined 735 contracts to come in this morning at 21,448.

The futures market settled under pressure yesterday on renewed spec selling and profit taking from the recent run up in prices. As I mentioned above, I wasn’t very impressed with yesterdays close in the cattle as we couldn’t get through overhead resistance and faded late. The market was probably getting a little over priced compared to where cash fed cattle are going to trade this week and with renewed selling in the equity markets the path of least resistance would seem to be lower. We can probably expect to see further selling in the cattle complex this morning as equity and outside commodity markets are all lower this morning. The market appears as though it could move back into near term weekly support at $82.50 in Feb live, $85.50 in April live and $92.50-$93 in March feeders. There remain no deliveries against the February live cattle contract. In a statement released by the Cooperatives Working Together program, members have voted to commit to funding a dairy herd retirement program over the course of two years that will eventually take 200,000-300,000 dairy cows out of production. 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.

2009-02-11T06:46:00.001-08:00

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.

2009-02-10T06:45:00.001-08:00

February 10, 2009

Good Morning from the Chicago Board of Trade,

Cash Cattle Situation and Outlook:

The cash fed cattle market was quiet yesterday with showlist distribution the main feature of the day. A look at last weeks feedlot transactions shows Texas/OK/NM yards selling 35,525 head of fed cattle for $83, Kansas yards sold 37,656 head of fed cattle for $83/$1.31, Nebraska feedlots sold 60,135 head of fed cattle for $80-$82/$1.31, Colorado feedlots sold 8,213 head of fed cattle for $83/$1.31, and Iowa/MN feedlots sold 21,267 head of fed cattle for $80-$82/$1.29-$1.30. Showlist numbers coming into this week look smaller in the northern feeding states and larger in the south. Packers were not bidding on any cattle yesterday with most feedlots pricing cattle at $86/$1.36-$1.37. Fed cattle selling through the sale barns in the Midwest were a little lower yesterday with the fed beef steers bringing $77-$82.50 and the fed Holsteins brining $68-$75. Slaughter cows begin the week with a mixed tone, higher at some sales and lower at others, but the bulk of the cutter and boning utility cows across the country continue to bring $35-$45. Feeder cattle markets have some follow through strength from last week as we see Oklahoma City calling their market steady to $1 higher on an estimated run of 10,500 head. In OKC yesterday the 5 weight steers were bringing $103-$116, the 6 weights were bringing $96-$107, the 7 weights were bringing $92-$98, and the 8 weights were bringing $89-$97. The jury is still out on this weeks feedlot trade of fed cattle, however the board was implying that it will be steady to $1 higher. Keep in mind thought that the week is still young and futures can still fall apart by the end of the week, especially if the beef continues to move lower. Feeder cattle markets should continue to find support for most of the week and slaughter cows might move into a more steady market, especially if we see boneless markets stall out and we continue to see more milk cows come to kill.

Cash Beef Situation and Outlook:

Yesterdays kill was estimated at 125,000 head, which would be even with a week ago and 6,000 head above the same day a year ago. The industry will be looking for a 610,000 head production week. The boxed beef market was mixed yesterday with the choice cutout closing $.11 lower to settle at $136.76 and the select cutout closing $.33 higher to settle at $134.29. Sales volume was good for a Monday with 358 loads of beef sold (153.26 loads of choice fab cuts, 73.11 loads of select fab cuts, 56.17 loads of trim, 75.21 loads of grinds). The choice/select spread settled at $2.46 a loss of $.44.

The beef market turned mixed yesterday on increased sales volumes. Coarse ground beef prices and sharply lower peeled tenderloin prices were the culprits in lending to a lower choice cutout yesterday. Choice and select chuck rolls were also trading at reduced price levels yesterday adding pressure to cutout values. The only cuts trading at higher money were inside rounds and top butts. Interesting to note that choice PSMO’s printed a 10 year low yesterday with USDA’s wtd ave price of $589.66. Choice short loins were very near a 10 year low at $357.77. As mentioned though, the lower price levels attracted increased trading levels yesterday with each item trading right at 500,000 lbs, which are some of the highest load counts we have seen on these items since the first quarter of 2008. There were increased trading levels in chuck rolls and short ribs as well yesterday, with each of these cuts showing over 500,000 lbs of product trading. Some of this could be export booking’s. Look for the beef market to remain under pressure until late week, when we could begin to see some stabilization in prices.

Futures Market Situation and Outlook:

February live cattle settled at $84.70 a gain of $1.05, April live cattle settled at $87.75 a gain of $1.05, and June live cattle settled at $84.92 a gain of $.85. In the feeder cattle pit, March feeder cattle settled at $95.55 a gain of $1.20, April feeder cattle settled at $97.35 a gain of $1.82, and the May feeder cattle settled at $98.52 a gain of $1.27. The reported CME feeder cattle index for 2/6/09 was $94.13 a gain of $.20. Live cattle spreads: Feb/April settled at -$3.05 steady on the day, April/June settled at $2.82 a gain of $.20, June/August settled at -$.80 a gain of $.20. Feeder cattle spreads: March/April settled at -$1.80 a loss of $.62, April/May settled at -$1.17 a gain of $.55, and May/August settled at -$1.97 a gain of $.17.

Yesterdays live cattle volume saw 22,147 contracts trade in the pit and 11,319 contracts trade on Globex. Live cattle open interest gained 57 to come in this morning at 204,005. Yesterday’s feeder cattle volume saw 4,395 contracts trade in the pit and 1,245 contracts trade on Globex. Feeder cattle open interest gained 198 contracts to come in this morning at 21,899.

Live and feeder cattle futures were higher yesterday on short covering and hedge lifting from last weeks late cash trade and some technical buying. There were no deliveries against the February live cattle contract last night. Yesterday was also the second day of the “Goldman Roll” of March feeder cattle long’s into April, with that spread losing $.62 on approximately 500-600 cars rolled. The USDA released new supply/demand data this morning. They lowered 2009 beef production 430 mil lbs, lowered 2009 pork production 55 mil lbs, and lowered 2009 poultry production 148 mil lbs. On the import/export side, USDA left beef imports alone and lowered exports by 40 mil, they lowered pork imports 40 mil and lowered exports 100 mil, and they left poultry imports unchanged and lowered exports 100 mil. The lowered revisions to the recent cattle inventory report were the main reasons for the lowered 09 beef production. We start out this morning right up against some weekly resistance numbers that I have at $85.25 in Feb live and $88.37 in April live. March feeders will have weekly resistance at $97.02. The above mentioned resistance levels will be a battleground today and closing above them would indicate a higher market into the end of the week. Holding below these resistance levels would indicate a move back to $82.50 in Feb live, $85.50 in April live, and $92.50 in March feeders. Look for a $.20-$.40 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.

2009-02-09T06:42:00.000-08:00

February 9, 2009

Good Morning from the Chicago Board of Trade,

Cash Cattle Situation and Outlook:

We left last week with a fed cattle market that trades mostly $1-$2 higher in the Nebraska and Iowa at $1.31-$1.32, mostly $1.31 on moderate movement. Cattle trading turned active in Colorado, Kansas, and Texas late Friday afternoon at mostly $83 live and $1.31 dressed, which would be $1 higher on what looks to be moderate movement. I will report on actual sales volumes tomorrow morning once everything is counted and reported to the USDA. For the week, feeder cattle markets were mostly $1-$4 higher, with the biggest gains being found in cattle weighing less than 600 lbs. Slaughter cow markets were mostly $1-$3 higher. Looking into this week, the fed cattle market will be dictated by market psychology and early week trading activity in the stock market and beef market. Feeder cattle markets will be supported early in the week as buyers look to secure inventory ahead of perceived shrinking supplies of replacement cattle. Slaughter cows should be steady to higher, although increased slaughter of dairy cows will be noted.

Cash Beef Situation and Outlook:

Last weeks cattle slaughter was estimated at 622,000 head, which would be 9,000 head smaller than the previous week and included a Friday kill of 120,000 and a Saturday kill of 11,000. For the week, choice beef values declined $4.92 and select beef values declined $4.34 on moderate demand and increased movement. Friday saw further losses in the beef complex with the choice cutout closing $1.98 lower to settle at $136.87 and the select cutout closing $1.38 lower to settle at $133.96. Sales volume on Friday was good with 375 loads of beef sold (150.46 loads of choice fab cuts, 99.39 loads of select fab cuts, 37.41 loads of trim, 88.15 loads of grinds). The choice/select spread settled at $2.92 a loss of $.60.

The beef market was under pressure all last week on over production and slackened demand due to winter doldrums and economic concerns. The biggest losers on the week were chuck and loin cuts as export demand and consumer demand for high priced steak cuts remains dull. Ground beef values also came under pressure last week as demand post Super Bowl weekend declined. The only bright spot in the beef carcass was choice rib cuts were we saw moderate price strength by the end of the week. Looking into this week, I would expect to see packers cut kills in an attempt to support beef prices. This could lend some support to the beef complex late in the week or early next week, however until then I would expect to see beef trade on the defensive for the first part of the week.

Futures Market Situation and Outlook:

For the week, February live cattle gained $1.65 to settle at $83.65, April live cattle gained $1.60 to settle at $86.70, and June live cattle gained $1.62 to settle at $84.07. In the feeder cattle pit for the week, March feeder cattle gained $3.35 to settle at $94.35, April feeder cattle gained $3.20 to settle at $95.52, and the May feeder cattle gained $2.93 to settle at $97.25. The reported CME feeder cattle index for 2/5/09 was $93.93 a gain of $.44.

Fridays live cattle volume saw 20,963 contracts trade in the pit and 13,005 contracts trade on Globex. Live cattle open interest declined 7,779 contracts to come in this morning at 203,305. Friday’s feeder cattle volume saw 4,140 contracts trade in the pit and 1,640 contracts trade on Globex. Feeder cattle open interest gained 538 contracts to come in this morning at 21,705.

Live and feeder cattle ended the week with moderate gains, with most of the price strength coming early in the week in reaction to the friendly cattle inventory report. We pretty much traded sideways the rest of the week awaiting news on the cash trade, which as we can see came in higher. Looking into this week, I would imagine that we trade in tandem with the equity markets, which as of this writing, are trading modestly lower. Other factors affecting trade this week will be a pending announcement over a dairy herd buyout and first notice day for deliveries against the February live cattle. Support and resistance numbers I have for this week are as follows: Support Feb live, $81.35, April live, $84.47, March feeders, $90.92. Resistance Feb live, $85.25, April live, $88.37, March feeder cattle, $97.02. Look for a mixed 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.

2009-02-06T06:50:00.001-08:00

February 6, 2009

Good Morning from the Chicago Board of Trade,

Cash Cattle Situation and Outlook:

The cash fed cattle market became active in eastern Nebraska and western Iowa yesterday with close to 30,000 head of cattle changing hands at $1.31 dressed. The Omaha packers were reportedly paying $1.32 dressed on a limited basis on better grading cattle. Southern feedlots were continuing to resist $80 packer bids yesterday and offer their cattle at $84-$85. Both sides will undoubtedly have to give a little bit in order to get business done today, and as of now I would expect to see a fed cattle trade in Texas and Kansas that transpires around $82-$83. Looking into next week, packer margins will take a pretty good hit by the close of business today and as such I would expect them to get pretty serious about cutting kills. I don’t expect to see much out of the beef market early next week either, and we will need to see some sort of early week beef business to make the packing community to want to pay any kind of higher money for fat cattle. Going home for the weekend feeder cattle and slaughter cow markets are firm and will likely remain that way into the first part of next week.

Cash Beef Situation and Outlook:

The boxed beef market was lower yesterday as late week demand from the retail/wholesale sector remains dull. There were a few higher price transactions on choice ribeyes and top butts yesterday, however for the most part discounts were needed throughout the rib, chuck, round, and loin primals of the beef carcass. Ground beef demand after the Super Bowl weekend is also said to be waning, which weighs on course ground markets as well. About the only good thing that can be said about yesterdays beef trade was that trade volumes did pick up again on the lower market, indicating that buyers are willing to take on some extra inventory at the lower price levels. I will continue to look for a lower beef trade into the middle of next week.

Futures Market Situation and Outlook:

The futures market opened under some pressure yesterday, however once news of the higher fed cattle trade in Nebraska hit Chicago we saw the market rally on hedge lifting and local short covering. I don’t expect to see a whole lot today as we have a higher fed trade priced in for Texas and Kansas and participants in the market will be looking out into next week to determine where that cash market should be priced. As mentioned above, packers will likely be tough to do business with next week and we are going to need to see something happen with the beef in order to keep any rally attempts alive. The stock market has opened sharply higher, which could add a level of support to live and feeder cattle trade today. Feb live cattle will continue to find support at $82 and resistance at $85 into early next week and a breach of either the support or resistance would likely indicate a couple dollar move in the direction of the breakout. Front month March feeders should have some support back at the $92.50 area, with the next formidable resistance being found at $96. Keep in mind today is option expiration for Feb live cattle and first notice day for Feb is Monday. Look for a mixed open $.10 higher to $.10 lower in live and feeder cattle futures this morning. Have a Good Weekend and Trade Well!!!

Any one wanting a more detailed report on the cattle and beef markets including fundamental, chart and technical analysis, plus spec/hedge recommendations for packers, processors, producers, and meat buyers feel free to contact me by phone or e-mail to set up a free trial.

There is risk in trading futures and options.

Have a Good Day,

Troy Vetterkind
Vetterkind Cattle Brokerage, LLC
Chicago Board of Trade
141 West Jackson Blvd.
Suite 1220A
Chicago, IL 60604
1-888-299-1477 Toll Free
1-312-896-2068 Direct
1-708-224-5985 Mobile
tvetterkind@linngroup.com

Reproduction or rebroadcast of any portion of this information is strictly prohibited without the written permission of the Linn Group, Inc. the information reflected herein is derived from sources believed to be reliable; however, this information is not guaranteed as to its accuracy or completeness. Opinions expressed are subject to change without notice. This material and any view expressed herein are provided for informational purposes only and should not be construed in any way as an inducement to buy or sell commodity futures or options contracts. The Linn Group and its officers, directors, employees and affiliates may take positions for their own accounts in contracts referred to herein. Trading futures involves risk of loss. Past performance is not indicative of future results.

2009-02-05T06:47:00.001-08:00

February 5, 2009

Good Morning from the Chicago Board of Trade,

Cash Cattle Situation and Outlook:

The cash feedlot trade was quiet yesterday as bids of $80/$1.29-$1.30 remain dollars apart from asking prices of $84-$85/$1.35. I wouldn’t expect to see much business transpire before Friday as packers have inventory around them into next week and of course they are losing margin daily as the beef market continues to erode, which will keep them less aggressive in this weeks price negotiations. We will have to see what happens, the board right now is implying a steady to higher fed trade for this week, however with the way it acted yesterday it feels like we may go and test downside support today or Friday. Fat cattle in Sioux Falls, SD yesterday were bringing mostly steady money on the beef cattle and $1-$2 higher on the Holsteins. The majority of the beef fats in Sioux Falls yesterday were bringing $79-$82 with the Holsteins bringing $70-$74. Slaughter cows continue to bring higher money across the country with cutters and boners bringing $40-$50 and the breakers bringing $49-$52. Feeder cattle auctions continue to turn higher transactions pretty much everywhere you look in the country. El Reno, OK had 7,000 head on offer yesterday with that market being called $1-$3 higher. In El Reno yesterday, the 7 weight steers brought mostly $92-$97 and the 8 weights brought mostly $88-$95.

Cash Beef Situation and Outlook:

Yesterdays kill was estimated at 122,000 head, which would be even with a week ago and 4,000 head above the same day a year ago. The week-to-date kill now stands at 371,000 head, which would be 3,000 head below the same period a week ago with the industry looking for a 625,000 head production week. The beef market was lower yesterday with the choice cutout closing $.91 lower to settle at $140.21 and the select cutout closing $.47 lower to settle at $136.90. Sales volume was good with 420 loads of beef sold (162.75 loads of choice fab cuts, 144.87 loads of select fab cuts, 42.41 loads of trim, 70.14 loads of grinds). The choice/select spread settled at $3.30 a loss of $.44.

The beef market was lower yesterday on continued buyer resistance to current price levels. Peeled tenders and ground beef supplies are said to be outpacing current demand and as such these were the items that received the deepest discounts yesterday. With that said though, yesterday’s lower market did entice some to take on extra inventory of chuck rolls and top butt’s as evident by yesterdays increased load count of choice beef items. The beef market still feels heavy and we can expect to see lower prices into the first of next week. Beef exports for the week of January 23-29, 2009 are as follows:
Beef: Net sales of 6,700 MT were primarily for Mexico (4,300 MT), Canada (1,000 MT), South Korea (600 MT), the Netherlands (300 MT), and Taiwan (200 MT). Exports of 8,000 MT were mainly to Mexico (3,000 MT), Canada (1,200 MT), South Korea (1,100 MT), Vietnam (900 MT), and Japan (800 MT).
Futures Market Situation and Outlook:

February live cattle settled at $83.17 a loss of $.35, April live cattle settled at $85.95 a loss of $.17, and the June live cattle settled at $83.67 a loss of $.07. In the feeder cattle pit, March feeder cattle settled at $93.42 steady on the day, April feeder cattle settled at $94.32 a loss of $.27, and the May feeder cattle settled at $96.42 a loss of $.02. The reported CME feeder cattle index for 2/3/09 was $93.32 a gain of $.12. Live cattle spreads: Feb/April settled at -$2.77 a loss of $.17, April/June settled at $2.27 a loss of $.10, and June/August settled at -$.95 a loss of $.07. Feeder cattle spreads: March/April settled at -$.90 a gain of $.27, April/May settled at -$2.10 a loss of $.25, May/August settled at -$2.27 a loss of $.25.

Yesterdays live cattle volume saw 12,500 contracts trade in the pit and 7,563 contracts trade on Globex. Live cattle open interest gained 598 contracts to come in this morning at 207,843. Yesterday’s feeder cattle volume saw 1,811 contracts trade in the pit and 689 contracts trade on Globex. Feeder cattle open interest declined 202 contracts to come in this morning at 20,765.

The futures market was very quiet yesterday as participants await fresh inputs regarding this weeks cash fed cattle trade. Monday’s rally in the market was a bullish reaction to the cattle inventory report and pricing in a steady to higher fed cattle trade for this week. Now, as we get towards the end of the week, the market has to justify whether or not the fed cattle market will be higher, and as such has started to drift lower. It looks like we will be lower on the open this morning, and the market feels heavy coming out of yesterday, so I wouldn’t doubt we trade lower and test some support under the market at $82 in Feb and $85 in April. March feeders should have a little support at $92 for today, and whether these support areas can hold, will be key in determining cash stability this 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.

2009-02-04T06:41:00.001-08:00

February 4, 2009

Good Morning from the Chicago Board of Trade,

Cash Cattle Situation and Outlook:

The cash feedlot trade went untested again yesterday with just a few token bids of $80 in the south going unmatched against feedlot offering prices of $85 live and $1.35 plus dressed. We likely won’t see any meaningful trade develop before late Thursday or Friday as packers are said to have some inventory around them. Beef values continue to erode, which is starting to weigh on margins, however a lower showlist offering this week and prospects for fed cattle numbers to get tighter by the end of the month should give cattle feeders a little bargaining power. A Feb futures board trading at $83.50 should also help provide a little support to the cash fed cattle market as well. I will still call for a steady to $1/$2 higher fed cattle trade for this week. The cash feeder cattle market continues to build on gains from Monday with most sales across the circuit like Huron, SD and La Junta, CO calling their markets mostly $1-$2 higher on both lightweight cattle weighing under 700 lbs and yearling types weighing over 700 lbs. There were some exceptions as we saw a big run of cattle in Phillip, SD yesterday with that market being called mostly $1-$3 lower. Overall though there seems to be better demand in the procurement of feeder cattle since last week and I would expect to see the market trend higher into next week. As we hit the midweek point slaughter cows are trading mostly $1-$3 higher pretty much everywhere in the country.

Cash Beef Situation and Outlook:

Yesterdays kill was estimated at 124,000 head, which would be 1,000 head below last week and 3,000 head below the same day a year ago. The week-to-date kill now stands at 249,000 head, which would be 3,000 head below the same period last week with the industry looking for a 625,000 head production week. The boxed beef market was lower yesterday with the choice cutout closing $.41 lower to settle at $141.12 and the select cutout closing $.80 lower to settle at $137.37. Sales volume was light with 222 loads of beef sold (91.30 loads of choice fab cuts, 77.22 loads of select fab cuts, 7.67 loads of trim, 46.02 loads of grinds). The choice/select spread settled at $3.76 a gain of $.39.

The beef market was lower again yesterday with discounts showing up in most primal areas of the beef carcass. Ground beef markets have now taken a significant downturn in the market and this adds to overall lower cutout values. Fed cattle 50% trim was also sharply lower yesterday on softening demand from the grinding sector. Many on the buy side continue to monitor consumer pulls at the retail level, or lack there of, and as such continue to procure beef on an as need basis. Look for a continued lower trend to the beef market into late this week.

Futures Market Situation and Outlook:

February live cattle settled at $83.52 a loss of $.37, April live cattle settled at $86.12 a loss of $.70, and June live cattle settled at $83.75 a loss of $.60. In the feeder cattle pit, March feeder cattle settled at $93.42 a loss of $.57, April feeder cattle settled at $94.60 a loss of $.72, and May feeder cattle settled at $96.45 a loss of $.55. The reported CME feeder cattle index for 2/2/09 was $93.20 a loss of $.15. Live cattle spreads: Feb/April settled at -$2.60 a gain of $.32, April/June settled at $2.37 a loss of $.10, June/August settled at -$.87 a gain of $.07. Feeder cattle spreads: March/April settled at -$1.17 a gain of $.15, April/May settled at -$1.85 a loss of $.17, May/August settled at -$2.02 a loss of $.17.

Yesterdays live cattle volume saw 17,225 contracts trade in the pit and 12,179 contracts trade on Globex. Live cattle open interest declined 486 contracts to come in this morning at 207,224. Yesterday’s feeder cattle volume saw 2,504 contracts trade in the pit and 663 contracts trade on Globex. Feeder cattle open interest declined 89 contracts to come in this morning at 20,976.

Live and feeder cattle futures settled lower on the day yesterday as profit taking from Monday’s rally and ideas the market was a little overpriced kept futures under pressure all day. Until we can see a better demand tone out of the beef market rallies in the futures market are likely to be capped for the balance of this week. With that said though, I don’t know how much we will break either, as I expect to see higher trend to the cash cattle markets develop in the coming weeks. I would expect futures to remain choppy for the balance of the week as we pretty much already have a higher cash fed cattle trade priced in for this week. Support for the balance of the week will continue to be found at $82 in Feb, $85 in April, and $92 in March feeders. We would need to see the market start closing back above $85 in Feb, $88 in April, and $95 in March feeders to negate some of the recent bearishness. Look for a $.10-$.20 higher open to live and feeder cattle futures. 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.

2009-02-03T06:48:00.003-08:00

February 3, 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 packer bids evident and feedlots beginning the week pricing their cattle at $85 in the south and $1.35 plus dressed in the north. With last weeks decent feedlot movement (i.e. 37,000 head in TX, 36,000 head in KS, and 79,000 head in NE) showlists are coming in smaller in most trading areas. This along with recent strength on the board and the fact that Texas cattle feeders were able to hold their market steady last week should go a long way in stabilizing the cash market this week. While the beef was a little lower again yesterday I expect to see that market begin to find some support as well. I will call for a steady to $1-$2 higher fed cattle market for this week. Feeder cattle markets begin the week higher with Oklahoma City and Joplin, MO calling their markets $2 higher yesterday. With idea of higher fed cattle markets into the spring and dwindling feeder cattle supplies going forward, buyers stepped up procurement pricing yesterday and I would expect this to continue for most of the week. Slaughter cows continue to trade at higher money throughout much of the country.

Cash Beef Situation and Outlook:

Yesterdays kill was estimated at 125,000 head, which would be 2,000 head below the same day a week ago and 6,000 head above the same day a year ago. The industry will be looking for a 625,000 head production week. The boxed beef market was lower yesterday with the choice cutout closing $.30 lower to settle at $141.53 and the select cutout closing $.73 lower to settle at $138.17. Sales volume was good with 374 loads of beef sold (148.32 loads of choice fab cuts, 76.32 loads of select fab cuts, 83.17 loads of trim, 66.19 loads of grinds). The choice/select spreads settled at $3.36 a gain of $.43.

The beef market was lower yesterday; however given the recent declines in many beef items over the last couple of weeks, the declines have begun to moderate. Most all items throughout the beef carcass were lower yesterday with the main emphasis being put on loin items and ground beef items. With that said though, sellers of beef are optimistic that steady to higher pricing will return to the beef complex by late this week or early next week. I will look for the beef market to begin to find some support in the $1.40 area basis the choice cutout.

Futures Market Situation and Outlook:

February live cattle settled at $83.90 a gain of $1.90, April live cattle settled at $86.82 a gain of $1.72, and June live cattle settled at $84.35 a gain of $1.90. In the feeder cattle pit, March feeder cattle settled at $94.00 a gain of $3.00, April feeder cattle settled at $95.32 a gain of $3.00, and May feeder cattle settled at $97.00 a gain of $2.67. The reported CME feeder cattle index for 1/30/09 was $93.35 a loss of $1.01. Live cattle spreads: Feb/April settled at -$2.92 a gain of $.17, April/June settled at $2.47 a loss of $.17, June/August settled at -$.95 a loss of $.30. Feeder cattle spreads: March/April settled at -$1.32 steady on the day, April/May settled at -$1.67 a gain of $.32, May/August settled at -$1.85 a loss of $.10.

Yesterdays live cattle volume saw 23,419 contracts trade in the pit and 17,019 contracts trade on Globex. Live cattle open interest declined 602 contracts to come in this morning at 207,786. Yesterday’s feeder cattle volume saw 2,586 contracts trade in the pit and 928 contracts trade on Globex. Feeder cattle open interest declined 761 contracts to come in this morning at 21,076.

Live and feeder cattle futures settled sharply higher to limit up yesterday on short covering and commercial buying in reaction to the bullishly construed cattle inventory report. Here again the market is certainly supply friendly going forward and once we get some of these near term demand issues worked out, I think we can see a sizeable rally in both live and feeder cattle futures. Weekly support in the market should now hold at $82 in the Feb live and $85 in the April live. The futures will find some resistance late this week at $85.50 in Feb and $88.25 in the April. March feeders should have good support now at $92.50 and the next major resistance level will be found at $96.50. I would probably look for a slightly lower open today on profit taking with some strength coming back to the market into late week, when we could see a more pronounced round of profit taking into the weekend. 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.

2009-02-03T06:48:00.001-08:00

2009-02-02T06:46:00.001-08:00

February 2, 2009

Good Morning from the Chicago Board of Trade,

Cash Cattle Situation and Outlook:

We left last week with a fed cattle market that finally traded in the Texas panhandle at $82 on approximately 20,000 head. For the week feeder cattle values were steady to $3 lower with the biggest declines noticed in cattle weighing over 700 lbs. Slaughter cows were mostly $1-$3 higher on reduced numbers coming to market in the west, although dairy cow slaughter is seen increasing in major dairy producing states. Looking into this week I would expect to see cash fed cattle and feeder cattle values begin to stabilize and I would expect to find further support in the slaughter cow market. We had a bullishly construed cattle inventory report on Friday afternoon. Some highlights of the report revealed all cattle and calves as of January 1, 2009 at 94.491 mil head or 98.4% of a year ago (99.3%), all cows and heifer 41.005 mil head or 98.4% of a year ago (99%), 2008 calf crop at 36.113 mil head or 98.2% of a year ago (99.3%) and cattle on feed 13.851 mil head was 93.4% of a year ago. Pre-report estimates for the report are in parenthesis and the report shows that cattle supplies going forward are going to get tight and once we see near term demand get straightened out we can expect to see a sizeable rally in the cattle market.

Cash Beef Situation and Outlook:

The beef market was lower last week and we can expect to see more of the same again for the first half of this week. I expect to see some support come into the beef market as the choice cutout approaches the $1.40 area, give or take a couple of dollars. We did see trade volumes pick up a bit on the lower market, which leads me to believe that buyers are beginning to find value in certain items as the market works lower. This would especially be true in middle meat items. Look for a softer start to the beef market this week, with some support being found late in the week.

Futures Market Situation and Outlook:

Live cattle futures lost $.67/$.70 respectively in Feb and April with June and August losing $1.70 apiece last week. Feeder cattle futures lost $1.20-$1.70 across the board last week as well with technical selling and worries over near term cash and beef demand being the catalyst for the lower markets. This week, I think we can begin to stabilize the cash markets and we should get at least some what of a friendly reaction to the cattle inventory report. The Dow and the other outside commodity markets are all lower this morning, so we probably won’t open as high as we would like to see in the cattle futures this morning and I’m sure we will find people willing to sell a higher open despite what the inventory report said on Friday. As mentioned above, we will get the near term demand fundamentals of the market straightened out in another couple of weeks, at which time I think we can see a sizeable rally in cattle futures, so I would caution about getting too bearish at current price levels. Look for a $.25-$.50 higher open to live and feeder cattle futures this morning, with more strength and less sell pressure being found in the deferred contracts as opposed to the front months. 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.

2009-01-30T06:50:00.001-08:00

January 30, 2009

Good Morning from the Chicago Board of Trade,

Cash Cattle Situation and Outlook:

We saw continued feedlot movement of fed cattle in Nebraska, Kansas, Colorado, and Iowa yesterday with each state selling about 4,000-5,000 head apiece at mostly $80 live and $1.28-$1.30 dressed. Texas feedlots have yet to sell any cattle and with the way the board is acting it looks like it should be an $81 market down there by this afternoon. So far this week movement looks pretty good in all trading areas with Kansas selling 34,000 head, Nebraska selling 70,000 head, Colorado selling 15,000 head, and Iowa/MN selling 24,000 head. This will help in keeping front end numbers of fed cattle manageable in the coming weeks. Going home for the weekend feeder cattle markets remain under pressure by $1-$3. I would expect to see both the cash fed cattle and feeder cattle markets begin to stabilize at current price levels going into next week. Slaughter cow markets remain $1-$3 higher going into the end of the week on good packer demand and I will look for more of the same early next week.

Cash Beef Situation and Outlook:

Yesterdays kill was estimated at 123,000 head, which would be 3,000 head below last week and 3,000 head above the same day a year ago. The week-to-date kill now stands at 497,000 head, which would be 7,000 head above the same period last week with the industry looking for a 640,000 head production week. The boxed beef market was lower yesterday with the choice cutout closing $2.46 lower to settle at $143.77 and the select cutout closing $1.20 lower to settle at $139.68. Sales volume was good with 340 loads of beef sold (205.17 loads of choice fab cuts, 80.44 loads of select fab cuts, 20.29 loads of trim, 34.09 loads of grinds). The choice/select spread settled at $4.09 a loss of $1.26.

The beef market was lower yesterday as packers offer product at sharply lower price levels to entice buyers back into the market. The strategy worked with many on the buy side willing to take on extra inventory of rib and loin items at the lower market values. Boneless beef items were about the only thing that was trading at higher money yesterday as there remains good demand for processing beef from the grinding sector and cow numbers are said to be getting tighter. I am going to look for beef values to begin finding support as the choice cutout approaches the $1.40 area by late next week.

Futures Market Situation and Outlook:

February live cattle settled at $81.10 a loss of $.07, April live cattle settled at $84.32 a loss of $.10, and the June live cattle settled at $82.02 a loss of $.27. In the feeder cattle pit, March feeder cattle settled at $90.62 a gain of $.05, April feeder cattle settled at $91.65 a loss of $.15, and the May feeder cattle settled at $93.55 a gain of $.10. The reported CME feeder cattle index for 1/28/09 was $94.70 a loss of $.17. Live cattle spreads: Feb/April settled at -$3.22 a gain of $.02, April/June settled at $2.30 a gain of $.17, and June/August settled at -$.60 a loss of $.27. Feeder cattle spreads: March/April settled at -$1.02 a gain of $.20, April/May settled at -$1.90 a loss of $.20, and May/August settled at -$1.60 a gain of $.50.

Yesterdays live cattle volume saw 26,011 contracts trade in the pit and 9,996 contracts trade on Globex. Live cattle open interest declined 23 contracts to come in this morning at 206,973. Yesterday’s feeder cattle volume saw 2,714 contracts trade in the pit and 1,322 trade on Globex. Feeder cattle open interest gained 322 contracts to come in this morning at 22,182.

Futures managed to come back and settle mixed to slightly lower yesterday after trading sharply lower early in the session and making new contract lows in February live cattle. January feeder cattle went off the board yesterday at $94.27 without much excitement. March feeders take over as lead contract month with a $4 discount to the CME index. We have this weeks cash fed and feeder cattle markets prices about right now the market will be positioning ahead of the semi-annual cattle inventory report set to be released at 2:00 pm. Estimates for the report are all cattle and calves on Jan 1 99.3%, annual calf crop 99.3%, total cows 99%, beef cows 98.8%, and dairy cows 100.1%. Once again the report will show that the supply side of the market remains friendly going forward and once we get the near term demand situation straightened out we can expect to see a sizeable rally in cattle futures and cash cattle values. If we are not at a bottom, we are getting very close, so if looking for long term trading strategies I think you want to be looking at the long side of the market. Look for a $.20-$.40 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.

2009-01-29T06:40:00.000-08:00

January 29, 2009

Good Morning from the Chicago Board of Trade,

Cash Cattle Situation and Outlook:

We saw further trading in the cash feedlot market yesterday with prices drifting another $1-$2 lower from Tuesday’s trade. Kansas feedlots started trading cattle yesterday at $80-$80.50 on about 8,000 head. Nebraska feedlots saw further trade at $80-$80.50 live and $1.29-$1.30 dressed on about 25,000 head, with Iowa and Colorado each selling about 5,000 head of cattle at $80 live and $1.29-$1.30 dressed. Texas feedlots did not sell any cattle yesterday opting to hold out for higher money. This will likely turn out to be a futile attempt and I would look for a steady to $1 lower market in that part of the country by the end of the week. Feeder cattle sales remain under pressure going into the weekend as weakness in the fed cattle market and a few more receipts around keep pressure on that market. Slaughter cows are higher coming into the end of the week and I would continue to look for support in that market.

Cash Beef Situation and Outlook:

Yesterdays kill was estimated at 122,000 head, which would be 1,000 head below the same day a week ago and 1,000 head below the same day a year ago. The week-to-date kill now stands at 374,000 head, which would be 10,000 head above the same period a week ago with the industry looking for a 640,000 head production week. The boxed beef market was lower with the choice cutout closing $1.18 lower to settle at $146.23 and the select cutout closing $1.66 lower to settle at $140.88. Sales volume was good with 349 loads of beef sold (145.98 loads of choice fab cuts, 97.13 loads of select fab cuts, 20.84 loads of trim, 84.85 loads of grinds). The choice/select spread settled at $5.35 a gain of $.48.

The beef market was lower again yesterday with discounts now surfacing throughout the entire beef carcass. Weekly production running 10,000 head above last week and steady at best demand for beef are reasons for the lower market. Lower money was also beginning to show up in the ground beef market. The beef market will likely continue to drift into the lower $1.40’s basis the choice cutout into the first couple of weeks of February. Exports for the week of January 16-22, 2009 are as follows:

Beef: Net sales of 7,800 MT were primarily for Mexico (4,800 MT), South Korea (1,200 MT), Canada (1,000 MT), and Taiwan (400 MT). Exports of 8,000 MT were mainly to Mexico (3,100 MT), South Korea (1,300 MT), Canada (1,200 MT), Vietnam (900 MT), and Japan (700 MT).

Futures Market Situation and Outlook:

February live cattle settled at $81.17 a loss of $.10, April live cattle settled at $84.42 a gain of $.02, and the June live cattle settled at $82.30 steady on the day. In the feeder cattle pit, January feeder cattle settled at $94.20 a gain of $.10, March feeder cattle settled at $90.57 a gain of $.30, and the April feeder cattle settled at $91.80 a gain of $.27. The reported CME feeder cattle index for 1/27/09 was $94.87 a loss of $.08. Live cattle spreads: Feb/April settled at -$3.25 a loss of $.12, April/June settled at $2.12 a gain of $.02, and June/August settled at -$.32 a gain of $.42. Feeder cattle spreads: Jan/March settled at $3.62 a loss of $.20, March/April settled at -$1.22 a gain of $.02, and April/May settled at -$1.70 a loss of $.02.

Yesterdays live cattle volume saw 19,300 contracts trade in the pit and 11,245 contracts trade on Globex. Live cattle open interest gained 328 contracts to come in this morning at 207,060. Yesterday’s feeder cattle volume saw 2,329 contracts trade in the pit and 953 contracts trade on Globex. Feeder cattle open interest gained 473 contracts to come in this morning at 21,860.

Live and feeder cattle futures settled mixed yesterday with some moderate strength being found in feeder cattle by the close. Lower cash markets and idea cash cattle might be lower again next week were reasons live cattle couldn’t rally much yesterday. Spec selling and some new hedge selling were also showing up in the market yesterday. February live cattle futures are making new contract lows on the overnight Globex trade, which along with lower stock futures will certainly keep some pressure on the market today as well. We have a lower cash market priced in for this week so now the market will await the cash fed cattle trade in Texas and begin positioning for the semi-annual cattle inventory report set to be released tomorrow afternoon after the close. Estimates for the report are all cattle and calves 99.3%, annual calf crop 99.3%, total cows/heifers 99%, beef cows 98.8%, and dairy cows 100.1%. The report again will show the supply friendliness of the market going forward into 2010/2011. Look for a lower trade in the cattle futures today and new contract lows in February live. 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.

2009-01-28T06:46:00.001-08:00

January 28, 2009

Good Morning from the Chicago Board of Trade,

Cash Cattle Situation and Outlook:

We saw a light fed cattle trade develop in eastern Nebraska and western Iowa late yesterday afternoon at $1-$2 lower money. Approximately 5,000-10,000 head of cattle changed hands at mostly $81 live and $1.30-$1.31 dressed yesterday afternoon in the north on fears the market was going to get worse before it gets better. Most other feedlots in the north and in the south were resisting the lower packer bids opting to see if the board can rebound any by the end of the week before negotiating prices on this week’s showlists. If we can get a rally in the futures by Friday, which could happen given oversold conditions and strength in the stock market, perhaps the rest of cattle feeding country can hold the market steady with last week. Feeder cattle markets remain under pressure with most auction markets across the country calling their markets $1-$3 lower. This will likely be the case for the next week or two until we begin to see feeder cattle numbers coming to market subside a little and we stabilize the fed cattle market. There remains a pretty good call for slaughter cows with most salebarns reporting $1-2 higher.

Cash Beef Situation and Outlook:

Yesterdays kill was estimated at 125,000 head, which would be even with last week and 5,000 head below the same day a year ago. The week-to-date kill now stands at 252,000 head, which would be 11,000 head above the same period with the industry looking for a 640,000 head production week. The boxed beef market was lower yesterday with the choice cutout closing $.72 lower to settle at $147.41 and the select cutout closing $1.01 lower to settle at $142.54. Sales volume was light with 228 loads of beef sold (97.96 loads of choice fab cuts, 77.35 loads of select fab cuts, 18.46 loads of trim, 34.55 loads of grinds). The choice/select spread settled at $4.87 a gain of $.29.

The beef market was lower again yesterday as slaughter levels running 11,000 head above last week at this time are being met with steady to weaker buyer demand. Most items throughout the major primal areas of the beef carcass were either trading at steady to lower price levels yesterday, with the exception of a few select middle meat items. Ground beef still had a steady call as did lean boneless beef during yesterdays trading session. With the increased fed cattle production the first part of this week, 50% fed cattle trim was starting to come under pressure yesterday. I will continue to look for boxed beef markets to drift lower into next week.

Futures Market Situation and Outlook:

February live cattle settled at $81.27 a loss of $1.07, April live cattle settled at $84.40 a loss of $1.20, and June live cattle settled at $82.30 a loss of $1.52. In the feeder cattle pit, January feeder cattle settled at $94.10 a gain of $.35, March feeder cattle settled at $90.27 a loss of $1.45, and the April feeder cattle settled at $91.52 a loss of $1.07. The reported CME feeder cattle index for 1/26/09 was $94.95 a loss of $.19. Live cattle spreads: Feb/April settled at -$3.12 a gain of $.12, April/June settled at $2.10 a gain of $.32, and June/August settled at -$.75 a loss of $.15. Feeder cattle spreads: Jan/March settled at $3.82 a gain of $1.80, March/April settled at -$1.25 a loss of $.37, and April/May settled at -$1.67 a gain of $.22.

Yesterdays live cattle volume saw 22,188 contracts trade in the pit and 10,494 contracts trade on Globex. Live cattle open interest declined 321 contracts to come in this morning at 206,740. Yesterday’s feeder cattle volume saw 2,957 contracts trade in the pit and 1,119 trade on Globex. Feeder cattle open interest gained 382 contracts to come in this morning at 21,379.

Cattle futures were under pressure for most of the session yesterday as ideas of lower cash cattle and beef values along with formidable spec selling kept the market under wraps all day. It certainly appears as though the futures market wants to go and test old contract lows and perhaps make new lows in Feb and April live despite the recent strength we are seeing in the equity markets. We have now priced in a lower fed cattle trade for this week along with lower cash feeder markets, which could mean that we could see a reprieve in selling for today and tomorrow. Stock futures are pointing to a higher open in the Dow this morning, which I think will translate into a higher open and perhaps a small rally in cattle futures this morning. If you are selling cash fed cattle down here you need to be looking for a spot to buy them back on paper. 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.

2009-01-27T06:45:00.001-08:00

January 27, 2009

Good Morning from the Chicago Board of Trade,

Cash Cattle Situation and Outlook:

Yesterdays cash fed cattle market went largely untested with no real packer bids to speak of and feedlots beginning the week offering cattle at $85-$86 live and $1.35-$1.37 dressed. Last weeks feedlot movement looks like this, Texas/OK/NM yards sold 43,796 head of fed cattle, Kansas yards sold 41,860 head of fed cattle, and Nebraska yards sold 75,446 head of fed cattle all for mostly $82 live and $1.32 dressed. Movement looked to be decent given the number of cattle for sale last week, which is leading to a modestly smaller offering of cattle in the south this week with larger numbers for sale in Nebraska. Fed cattle selling through the nations salebarns begin the week trading at lower money in sympathy with last weeks feedlot sales. Feeder cattle look softer to begin the week as well with Oklahoma City calling their market steady to $3 lower. I will look for this weeks fed cattle trade to be softer early and firming late.

Cash Beef Situation and Outlook:

Yesterdays kill was estimated at 124,000 head, which would be 8,000 head below the same day a week ago and 3,000 head above the same day a year ago. The industry will look for a 640,000 head production week. The boxed beef market was lower yesterday with the choice cutout closing $.18 lower to settle at $148.13 and the select cutout closing $.32 lower to settle at $143.55. Sales volume was light with 210 loads of beef sold (105.66 loads of choice fab cuts, 56.16 loads of select fab cuts, 17.83 loads of trim, 30.45 loads of grinds). The choice/select spread settled at $4.58 a gain of $.14.

The beef market was under pressure again yesterday with discounts once again surfacing in the rib, round, and loin complexes. The ground beef market was mostly steady yesterday, however sources cited demand was beginning to back off a bit. Packers have pretty decent margins right now and will want to be killing extra cattle to take advantage of it. This is going to put extra product on the market for the balance of this week and into the first of next, which inevitably will weigh on cutout values. Continue to look for a lower beef trade.

Futures Market Situation and Outlook:

February live cattle settled at $82.35 a loss of $.32, April live cattle settled at $85.60 a loss of $.20, and the June live cattle settled at $83.82 a loss of $.35. In the feeder cattle pit, January feeder cattle settled at $93.75 a gain of $.10, March feeder cattle settled at $91.72 a loss of $1.02, and the April feeder cattle settled at $92.60 a loss of $.92. The reported CME feeder cattle index for 1/23/09 was $95.14 a loss of $.20. Live cattle spreads: Feb/April settled at -$3.25 a loss of $.12, April/June settled at $1.77 a gain of $.15, June/August settled at -$.60 a gain of $.10. Feeder cattle spreads: Jan/March settled at $2.02 a gain of $1.12, March/April settled at -$.87 a loss of $.10, April/May settled at -$1.90 a gain of $.22.

Yesterdays live cattle volume saw 23,134 contracts trade in the pit and 5,533 contracts trade on Globex. Live cattle open interest gained 1,793 contracts to come in this morning at 207,062. Yesterday’s feeder cattle volume saw 3,182 contracts trade in the pit and 601 contracts trade on Globex. Feeder cattle open interest declined 264 contracts to come in this morning at 20,991.

The futures market opened higher yesterday in reaction to the friendly cattle on feed report, however spec and hedge selling surfaced shortly after the open to cap the early rally attempt. The cattle on feed report indicated that the market has very supply friendly fundamentals going forward, however worries over near term demand are an overriding factor right now and this keeps rallies in the market at bay. We will continue to look for support in the market at contract lows of $80.60 in the Feb and $82.45 in the April. The market sure seems like it want to go and test those old lows and we will have to see if they hold or not. My opinion is that if they don’t hold we could get one more quick break before rallying into spring. Feeders should be able to hold the $89-$90 area on any further weakness. We will need to see Feb cattle start closing back above the $83 area in order to negate some of the recent bearishness. Look for a $.10-$.20 higher open to live and feeder cattle futures this morning. Trade Well!!!

Any one wanting a more detailed report on the cattle and beef markets including fundamental, chart and technical analysis, plus spec/hedge recommendations for packers, processors, producers, and meat buyers feel free to contact me by phone or e-mail to set up a free trial.

There is risk in trading futures and options.

Have a Good Day,

Troy Vetterkind
Vetterkind Cattle Brokerage, LLC
Chicago Board of Trade
141 West Jackson Blvd.
Suite 1220A
Chicago, IL 60604
1-888-299-1477 Toll Free
1-312-896-2068 Direct
1-708-224-5985 Mobile
tvetterkind@linngroup.com

Reproduction or rebroadcast of any portion of this information is strictly prohibited without the written permission of the Linn Group, Inc. the information reflected herein is derived from sources believed to be reliable; however, this information is not guaranteed as to its accuracy or completeness. Opinions expressed are subject to change without notice. This material and any view expressed herein are provided for informational purposes only and should not be construed in any way as an inducement to buy or sell commodity futures or options contracts. The Linn Group and its officers, directors, employees and affiliates may take positions for their own accounts in contracts referred to herein. Trading futures involves risk of loss. Past performance is not indicative of future results.

2009-01-26T06:44:00.001-08:00

January 26, 2009

Good Morning from the Chicago Board of Trade,

Cash Cattle Situation and Outlook:

We left last week with a fed cattle market that trades mostly $2-$4 lower at $82 live and $1.32 dressed. For the week feeder cattle values were off by $2-$4 and slaughter cows were mostly $1-$2 higher. The USDA released its monthly cattle on feed report on Friday, with on feed Jan 1 at 11.234 mil head or 92.9% (93.9% pre-report), placed during December 1.647 mil head or 96.8% (100.1% pre-report), and marketed during December at 1.683 mil head or 102.3% (99.3% pre-report). The report will be considered friendly at the placement numbers came in below expectations and the marketing number came in above pre-report estimates. The overall on feed number will continue to be supply friendly into spring/early summer marketing timeframes and continues to show feedlots remain current on marketing’s. Placements of cattle continue to run below year ago levels on cattle weighing less than 700 lbs. This week’s cash fed cattle market should be steady to $1 higher, feeder cattle values will likely remain under pressure for the first part of the week, and I would look for continued support in the slaughter cow market.

Cash Beef Situation and Outlook:

The boxed beef market lost $1 on the choice product and the select cutout held mostly steady according to the USDA on moderate movement. Retail and wholesale interest for boxed beef began to wane early last week as many buyers filled their most immediate needs and moved to the sidelines looking for improved consumer demand and bargains in the beef complex. Discounts were noted throughout the entire beef carcass last week, with the exception of select rib items and ground beef. I would look for more of the same early this week in the beef market and I will still target the $1.43-$1.45 on the choice cutout and $1.39-$1.40 area on the select cutout.

Futures Market Situation and Outlook:

The futures market was choppy and volatile all of last week as the market anticipated a lower cash fed and feeder cattle market. The futures market was also very sensitive to the wild gyrations in the stock market. This week we should open a little higher on the friendly cattle on feed report and the possibility of a higher cash fed cattle market. The market will once again be on pins and needles in terms of what the stock market does early this week and I’m sure we will find people who will want to sell a higher open. However, I still think we will get our near term fed cattle supplies cleaned up in a couple of weeks and I expect to see improved beef demand by mid-February, both domestic and international. It’s not to say that we can’t see the stock market go and test old lows at 7500 basis the Dow, which would inevitably push fed cattle futures down into new lows, but if such a scenario were to develop I don’t think it would last very long and I still think higher prices are in the cards by March/April. Look for a $.25-$.50 higher open to live and feeder cattle futures this morning. Trade Well!!!

Any one wanting a more detailed report on the cattle and beef markets including fundamental, chart and technical analysis, plus spec/hedge recommendations for packers, processors, producers, and meat buyers feel free to contact me by phone or e-mail to set up a free trial.

There is risk in trading futures and options.

Have a Good Day,

Troy Vetterkind
Vetterkind Cattle Brokerage, LLC
Chicago Board of Trade
141 West Jackson Blvd.
Suite 1220A
Chicago, IL 60604
1-888-299-1477 Toll Free
1-312-896-2068 Direct
1-708-224-5985 Mobile
tvetterkind@linngroup.com

Reproduction or rebroadcast of any portion of this information is strictly prohibited without the written permission of the Linn Group, Inc. the information reflected herein is derived from sources believed to be reliable; however, this information is not guaranteed as to its accuracy or completeness. Opinions expressed are subject to change without notice. This material and any view expressed herein are provided for informational purposes only and should not be construed in any way as an inducement to buy or sell commodity futures or options contracts. The Linn Group and its officers, directors, employees and affiliates may take positions for their own accounts in contracts referred to herein. Trading futures involves risk of loss. Past performance is not indicative of future results.

2009-01-23T06:46:00.001-08:00

January 23, 2009

Good Morning from the Chicago Board of Trade,

Cash Cattle Situation and Outlook:

The cash fed cattle market turned active yesterday in southern plains feedlots at prices generally $2 lower than the week before. Texas/OK/NM feedlots sold 18,500 head of fed cattle for $82 live and Kansas feedlots sold 28,200 head of fed cattle for $82 live. There was also trade that took place in the north with prices mostly steady with Wednesday as we see Nebraska feedlots selling 26,300 head of fed cattle for $1.32 dressed, Colorado selling 1,500 head of fed cattle for $82 live, and Iowa/MN feedlots selling 7,700 head of fed cattle for $1.32 dressed. The northern trade of fed cattle should be about wrapped up for the week and any cleanup trade that occurs today should take place at steady money with yesterday. The south could probably use to sell a few more cattle and here too, any trade that does develop should take place at steady money with the bulk of yesterday’s trade. A few plants in the north are said to be booked up with cattle into the end of next week and first half of the following week. Southern packers remain rather close to the knife in terms of inventory and this might take some leverage away from them in next weeks price negotiations. I am going to look for a steady to higher fed cattle trade for next week. Going home for the weekend, slaughter cow markets remain firm and given the level of demand for ground beef, lack of near term beef imports, and tightening of cow numbers in the west I will call for a steady to firm cow market early next week. Feeder cattle markets remain a under pressure going into the weekend as lower fed cattle markets, both futures and cash, keeps buyers looking to procure inventory at lower money. Feeder cattle runs should start to tighten up a bit towards the end of the month, which I think with an increase in fed cattle prices should support feeder cattle values in the lower $90’s basis the CME index.

Cash Beef Situation and Outlook:

Yesterdays kill was estimated at 126,000 head, which would be 1,000 head above the same day last week and 1,000 head above the same day a year ago. The week-to-date kill now stands at 490,000 head, which would be 8,000 head above the same period a week ago, with the industry looking for a 620,000 head production week. The boxed beef market was lower with the choice cutout closing $2.10 lower to settle at $149.65 and the select cutout closing $.98 lower to settle at $143.54. Sales volume was good with 301 loads of beef sold (127.22 loads of choice fab cuts, 110.19 loads of select fab cuts, 22.58 loads of trim, 41.22 loads of grinds). The choice/select spread settled at $6.12 a loss of $1.12.

The beef market was lower again yesterday with price discounts showing up in most all primal areas of the beef carcass as packer margins are attractive and they ramp up production to take advantage of the situation. This has put a larger mix of beef cuts on the market that buyers are only willing to absorb now that they have comfortable inventory positions. Ground beef remains firm from most points of sale and higher prices in that complex along with higher prices in the boneless grinding beef complex should prevail into next week. I will continue to look for choice cutout values to drift into the $1.45 area and select cutout values to drift into the $1.40 area by the first of February. Export sales for the week of January 9-15, 2009 are as follows:
Beef: Net sales of 7,500 MT were primarily for Mexico (2,000 MT), Japan (1,800 MT), South Korea (1,300 MT), and Canada (1,100 MT). Exports of 8,400 MT were mainly to Mexico (3,100 MT), South Korea (1,800 MT), Vietnam (1,400 MT), Canada (800 MT), and Japan (700 MT).
Futures Market Situation and Outlook:

February live cattle settled at $82.27 a loss of $.07, April live cattle settled at $85.40 a gain of $.20, and the June live cattle settled at $84.17 a gain of $.07. In the feeder cattle pit, January feeder cattle settled at $93.47 a gain of $.60, March feeder cattle settled at $92.30 a gain of $.95, and the April feeder cattle settled at $93.40 a gain of $.60. The reported CME feeder cattle index for 1/21/09 was $95.52 a loss of $.11. Live cattle spreads: Feb/April settled at -$3.12 a loss of $.27, April/June settled at $1.22 a gain of $.12, and June/August settled at -$.77 a loss of $.05. Feeder cattle spreads: Jan/March settled at $1.17 a loss of $.35, March/April settled at -$1.10 a gain of $.35, April/May settled at -$2.05 a loss of $.15.

Yesterdays live cattle volume saw 21,962 contracts trade in the pit and 10,406 contracts trade on Globex. Live cattle open interest gained 131 contracts to come in this morning at 205,233. Yesterday’s feeder cattle volume saw 2,443 contracts trade in the pit and 762 contracts trade on Globex. Feeder cattle open interest declined 200 contracts to come in this morning at 21,068.

Live and feeder cattle futures settled higher yesterday on hedge lifting, short covering, and a late rally in the Dow. We did nothing more yesterday than trade with the lower stock market early, tested Wednesday’s lows and rallied into the close. It looks like the exact same thing is going to happen again this morning with overnight Dow futures down 200, S&P futures down 22, and overnight Globex cattle futures down $.50. Keep in mind we will have a cattle on feed report out tonight after the close, which is expected to show on feed Jan 1, 2009 93.9%, placed during December 100.1%, and marketed during December 99.3%. The report should show that fed cattle numbers get very manageable in the next 4 weeks, which should be supportive to the front end of the board. Feedlot placement activity will continue to grow in the coming months as placements the last several months have been running below year ago levels. These cattle are outside feedlots right now waiting to be placed at heavier weights, which is going to start to build fed cattle supplies for the late summer/early fall marketing timeframes. The market should find some support on a lower trade today until we get the on feed report behind us. Look for a $.25-$.50 lower open to live and feeder cattle futures this morning, and if today is like any other day this week, you can buy fats and feeders $1 lower and look to sell them out higher on the day by the close. Trade Well!!!

Any one wanting a more detailed report on the cattle and beef markets including fundamental, chart and technical analysis, plus spec/hedge recommendations for packers, processors, producers, and meat buyers feel free to contact me by phone or e-mail to set up a free trial.

There is risk in trading futures and options.

Have a Good Day,

Troy Vetterkind
Vetterkind Cattle Brokerage, LLC
Chicago Board of Trade
141 West Jackson Blvd.
Suite 1220A
Chicago, IL 60604
1-888-299-1477 Toll Free
1-312-896-2068 Direct
1-708-224-5985 Mobile
tvetterkind@linngroup.com

Reproduction or rebroadcast of any portion of this information is strictly prohibited without the written permission of the Linn Group, Inc. the information reflected herein is derived from sources believed to be reliable; however, this information is not guaranteed as to its accuracy or completeness. Opinions expressed are subject to change without notice. This material and any view expressed herein are provided for informational purposes only and should not be construed in any way as an inducement to buy or sell commodity futures or options contracts. The Linn Group and its officers, directors, employees and affiliates may take positions for their own accounts in contracts referred to herein. Trading futures involves risk of loss. Past performance is not indicative of future results.

2009-01-22T06:30:00.000-08:00

January 22, 2009

Good Morning from the Chicago Board of Trade,

Cash Cattle Situation and Outlook:

The cash fed cattle market turned moderately active in the north yesterday with sales running generally $1-$3 lower when compared to last week. The USDA was reporting 7,400 head of cattle sold in Nebraska at $81-$82 live and $1.32 dressed and 9,600 head of cattle sold in Colorado at $82.50 live and $1.32 dressed. Packers in Texas and Kansas were bidding $81-$82 with most feedlots opting to pass on those bids. Lower cattle futures and boxed beef markets were the catalysts for the lower trade yesterday, and it now looks like the southern trade will inevitably take place at $82-$83. Fat cattle at the Sioux Falls, SD auction market were also being marked about $1 lower yesterday with the beef fats bringing $80-$82 and the Holstein fats bringing $69-$72. Slaughter cow markets are firm by $1-$2 this week with the majority of the cutter and boning utility cows bringing $43-$48 and the breakers and whites bringing $48-$56. Most feeder cattle sales around the country are turning $1-$3 lower results. Sales like El Reno, OK and Dodge City, KS were calling their market that way yesterday with the majority of the 600 lbs to 800 lbs steer cattle bringing $88-$99. The fed cattle market is dragging the feeder cattle market lower as we get into the last half of January. Boxed beef values are expected to drift down to the mid-$1.40’s basis the choice cutout, which should begin to support cash fed cattle values at current price levels, given that packers are currently making $35-$40 per head. Much of this break has already been priced into the futures and this week’s cash market, which should mean that we could find some support down here for a week or two until we see what kind of demand develops into the first of February. Cash feeder cattle values could have a little more to loose, however the board has already priced in a lower $90’s CME feeder index with yesterdays price action. Cows should find some support at current price levels as there is very good demand for ground beef right now and imports from overseas are down due to production cutbacks in South America and Australia.

Cash Beef Situation and Outlook:

Yesterdays kill was estimated at 123,000 head, which would be 11,000 head below last week and 6,000 head below the same day a year ago. The week-to-date kill now stands at 364,000 head, which would be 7,000 head below the same period a week ago with the industry looking for a 620,000 head production week. The boxed beef market was lower with the choice cutout closing $1.22 lower to settle at $151.75 and the select cutout closing $1.15 lower to settle at $144.52. Sales volume was good with 375 loads of beef sold (137.13 loads of choice fab cuts, 140.97 loads of select fab cuts, 15.27 loads of trim, 81.61 loads of grinds). The choice/select spread settled at $7.23 a loss of $.07.

The beef market was under pressure yesterday with price discounts now showing up in all major primal areas of the beef carcass. We talked the last several weeks about how most major retail and wholesale buyers were hand to mouth in their purchases and due to the production cutbacks through the holidays were forced to pay up for product to get their inventory positions back into comfortable levels. Most of that buying has been completed as of late last week, and now many of the major buyers of boxed beef have moved to the sidelines looking for opportunities in the marketplace. This had packinghouse meat salesmen offering ribeyes, chuck rolls, knuckles, and peeled tenders along with many other items throughout the beef carcass at lower money. It appears as though some of the export business we saw the last couple of weeks might have been sufficed as well with chuck rolls and short ribs becoming more available in the marketplace. Ground beef demand remains very robust at the retail level and in many instances demand outweighs availability of product. With packer margins in such good shape I would imagine they will want to take advantage of the current situation and overkill for current demand. I will continue to look for a lower trend to the boxed beef market into the end of the month, with choice cutout values targeting the $1.45-$1.48 area in coming weeks.

Futures Market Situation and Outlook:

February live cattle settled at $82.35 a loss of $.27, April live cattle settled at $85.20 a loss of $.15, and the June live cattle settled at $84.10 a gain of $.05. In the feeder cattle pit, January feeder cattle settled at $92.87 a loss of $.12, March feeder cattle settled at $91.35 a loss of $.40, and the April feeder cattle settled at $92.80 a loss of $.70. The reported CME feeder cattle index for 1/20/09 was $95.98 a gain of $.02. Live cattle spreads: Feb/April settled at -$2.85 a loss of $.12, April/June settled at $1.10 a loss of $.20, June/August settled at -$.72 a loss of $.02. Feeder cattle spreads: Jan/March settled at $1.52 a gain of $.27, March/April settled at -$1.45 a gain of $.30, April/May settled at -$1.90 a loss of $.47.

Yesterdays live cattle volume saw 21,553 contracts trade in the pit and 14,332 contracts trade on Globex. Live cattle open interest gained 3,070 contracts to come in this morning at 205,110. Yesterday’s feeder cattle volume saw 3,266 contracts trade in the pit and 1,808 contracts trade on Globex. Feeder cattle open interest gained 71 contracts to come in this morning at 21,263.

The futures market was under pressure again yesterday early in the session with technical selling flourishing linked to lower stock markets and the pricing of lower cash cattle markets for this week. We did manage to find some support around midsession as declines in the equity markets abated and hedge lifting came into the market as feedlots in the north began to sell cattle. Contract lows of $80.60 in the Feb live and $82.45 in April live are now a stones through away and one would have to assume that we will be down challenging those lows by early next week given all the negativity in the marketplace. Feeder cattle might have done their job to the downside for a minute with the March contract getting into the $90.50 area early in the session, which is pricing a $5.00 break in the CME index by the first of Feb. The cattle futures market will continue to be ultra sensitive to moves in the equity markets and we will have to see if the late rally in the Dow holds for a day or two. We have a lower cash market priced in for this week, so this along with squaring of positions ahead of this Friday’s cattle on feed report might stem some of the recent selling. Estimates for the report are on feed Dec 1, 93.9%, placed during December, 100.1%, and marketed during December, 99.3%. For the balance of this week, keep an eye on the above mentioned contract lows in Feb and April live cattle and the $90 area in March feeder cattle. Violating any of those price levels on the downside by Friday would open the door for another leg down in prices starting next week, unless we get a wildly bullish report Friday afternoon. 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.

2009-01-21T06:34:00.000-08:00

January 21, 2009

Good Morning from the Chicago Board of Trade,

Cash Cattle Situation and Outlook:

Yesterdays cash fed cattle market was untested with just a few bids surfacing in the south at $82-$83 and most feedlots priced at $87 in the south and $1.38 in the north. Last weeks market showed approximately 36,000 head of cattle sold in Texas at $84.50, 44,000 head of cattle sold in Kansas at $83-$84 live and $1.32-$1.35 dressed, and 71,000 head of cattle sold in Nebraska at $83-$83.50 live and mostly $1.35 dressed, all of which would be $.50-$1 higher on the week. Showlists are mostly larger in all feeding areas again this week except for Kansas as movement in the south was a little light and more cattle become available for market in the north. The beef market, while sharply higher all of last week and modestly higher the first couple of days this week, is going to start to drift lower as most near term buying in the market gets wrapped up. Fed cattle numbers will remain ample in the northern feeding areas of the country for another couple of weeks, which will keep rallies in the market in check, unless we see some sort of weather event or some new beef demand surfaces. With the board closing like it did yesterday we will need to see some sort of turnaround in order to stave off a lower fed cattle market for this week. The way things look right now we would have to call for a steady to $.50-$1 lower fed cattle trade for this week. Feeder cattle markets carry a mostly lower undertone early this week again, with sales such as Oklahoma City and La Junta, Colorado calling their markets mostly $1-$2 lower. Most of this weakness is being found in the bigger yearling type cattle as softness in the futures market and the inability of the fed cattle market to hold much of a rally has buyers trying to buy replacement cattle at lower money. With that said though, most of the major feeding companies remain aggressive buyers for cattle weighing 700 lbs-800 lbs as they try to fill empty pen space and get cattle placed into late spring and early summer. The sales that these guys show up at carry a mostly steady to higher undertone. There is also talk about the first of the year feeder cattle run beginning to dry up and that feeder cattle numbers will become shorter as we get into the end of January. Look for feeder cattle values to drift sideways to lower for the balance of the week.

Cash Beef Situation and Outlook:

Yesterdays kill was estimated at 125,000 head, would be 1,000 head below last week and 1,000 head below the same day a year ago. Including Mondays 116,000 head slaughter the week-to-date kill now stands at 241,000 head, which would be 3,000 head behind 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 $.75 higher to settle at $152.97 and the select cutout closing $.82 higher to settle at $145.67. Sales volume was light with 172 loads of beef sold (56.34 loads of choice fab cuts, 64.11 loads of select fab cuts, 10.22 loads of trim, 41.00 loads of grinds). The choice/select spread settled at $7.30 a loss of $.07.

The beef market was higher yesterday, however there were pockets of weakness beginning to show up in certain primal areas of the carcass. Discounts were beginning to surface in many items throughout the round complex as well as some weakness start5ing to develop in the loin complex. PSMO’s were the main area packers needed to offer discounts as some of the demand ahead of Valentines Day gets filled. Rib and chuck items were still trading steady to higher yesterday, however I think we could end up seeing some lower prices in ribeyes by the end of the week. Ground beef remains in very good demand and higher prices continue to be the norm there. I would start to look for cutout values to begin to drift lower by the end of the week as much of the near term demand we saw the last couple of weeks begins to wane.

Futures Market Situation and Outlook:

February live cattle settled at $82.62 a loss of $1.90, April live cattle settled at $85.35 a loss of $2.32, and June live cattle settled at $84.05 a loss of $2.15. In the feeder cattle pit, January feeder cattle settled at $93.00 a loss of $2.00, March feeder cattle settled at $91.75 a loss of $2.62, and the April feeder cattle settled at $93.50 a loss of $2.45. The reported CME feeder cattle index for 1/19/09 was $95.96 a loss of $.27. Live cattle spreads: Feb/April settled at -$2.72 a gain of $.42, April/June settled at $1.30 a loss of $.17, and June/August settled at -$.70 a loss of $.27. Feeder cattle spreads: Jan/March settled at $1.25 a gain of $.25, March/April settled at -$1.75 a loss of $.17, and April/May settled at -$1.42 a gain of $.02.

Yesterdays live cattle volume saw 25,642 contracts trade in the pit and 13,631 contracts trade on Globex. Live cattle open interest declined 2,419 contracts to come in this morning at 203,960. Yesterday’s feeder cattle volume saw 2,007 contracts trade in the pit and 992 contracts trade on Globex. Feeder cattle open interest gained 64 contracts to come in this morning at 21,226.

Cattle futures started the week on the defensive with live and feeder cattle ending yesterday’s session with sharp losses. Much of the weakness can be attributed to weakness in the equity markets and uncertainty over the banking sector. However, I think the market wasn’t very impressed with the way cattle sold in Texas late on Friday as many were expecting an $85 or better trade. Also there was some concern that the beef market is going to start to move a little lower. Technically the market does not look very good closing into new lows not seen since mid-December. $82 will now be an area that needs to hold in the Feb live cattle otherwise a test of contract lows of $80.60 will be in the cards. That same number in the April cattle comes at $85, otherwise contract lows of $82.45 will be in the cards. March feeders look like they want to go test psychological support at $90 and failing to hold that would keep downside targets of $84.20 in play. Keep an eye on the stock market because if that starts to fail again cattle will follow. 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.

2009-01-16T06:44:00.001-08:00

January 16, 2009

Good Morning from the Chicago Board of Trade,

Cash Cattle Situation and Outlook:

We saw a few more cattle trade yesterday at steady to $.50 higher when compared to Wednesday. The majors stepped into the market yesterday paying $83.50/$1.35 on cattle in Nebraska and Kansas. It looks as though we sold about 8,000 head of cattle in Kansas and 12,000 head of cattle in Nebraska. There were some cattle that sold in Colorado for $83.50 and further cleanup trade in western Iowa at $1.36-$1.37. Texas feedlot managers did not sell any cattle yesterday as the board looked like it had some support and there showlist numbers are manageable. We should see Texas feedlots let loose of cattle today at no worse than steady money, with a pretty good chance of $1 higher. Going home for the weekend slaughter cows are under pressure, however there still remains good support in the cash feeder cattle market. Most feeder cattle sales continue to report steady to higher transactions on lightweight cattle, however there was a softer undertone beginning to develop on the 7-8 weight cattle.

Cash Beef Situation and Outlook:

Yesterdays kill was estimated at 125,000 head, which would be 1,000 head below last week and 5,000 head below the same day a year ago. The week-to-date kill now stands at 482,000 head, which would be 4,000 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 $.85 higher to settle at $150.75 and the select cutout closing $.81 higher to settle at $143.62. Sales volume was good with 278 loads of beef sold (92.37 loads of choice fab cuts, 101.17 loads of select fab cuts, 30.31 loads of grinds, 54.41 loads of grinds). The choice/select spread settled at $7.13 a gain of $.04.

The beef market was higher again yesterday with the choice cutout closing back above $1.50 for the first time since the beginning of December. Yesterday saw continued price strength in the choice ribeye and PSMO market, as retailers and restaurant buyers secure product ahead of Valentines Day. There was also higher prices being paid on chuck rolls and certain round cuts. Ground beef and boneless markets were higher again yesterday as the retail community aggressively features hamburger product. Foodservice accounts also add to the strength in the ground beef complex. As I mentioned yesterday we could be getting close to seeing some of this near term beef demand being sufficed. Again, I am not saying we are in for a big break in beef prices; however we could start to see some of the recent gains begin to slow the acceleration. Look for the beef market to trend sideways into the first part of next week.

Futures Market Situation and Outlook:

February live cattle settled at $84.35 a gain of $1.00, April live cattle settled at $87.30 a gain of $.47, and the June live cattle settled at $85.70 steady on the day. In the feeder cattle pit, January feeder cattle settled at $95.00 a loss of $.70, March feeder cattle settled at $94.30 a loss of $.32, and the April feeder cattle settled at $95.55 a loss of $.67. The reported CME feeder cattle index for 1/14/09 was $96.24 a loss of $.25. Live cattle spreads: Feb/April settled at -$2.95 a gain of $.52, April/June settled at $1.60 a gain of $.47, and the June/August settled at -$.67 a loss of $.12. Feeder cattle spreads: Jan/March settled at $.70 a loss of $.37, March/April settled at -$1.25 a gain of $.35, and the April/May settled at -$1.75 a loss of $.55.

Yesterdays live cattle volume saw 31,573 contracts trade in the pit and 18,871 contracts trade on Globex. Live cattle open interest gained 4,071 contracts to come in this morning at 205,315. Yesterday’s feeder cattle volume saw 2,035 contracts trade in the pit and 1,047 contracts trade on Globex. Feeder cattle open interest gained 494 contracts to come in this morning at 21,236.

It was another choppy day in the cattle futures market yesterday as the knuckleheads who like to sell fat and feeder cattle futures because the Dow is lower were out in full force on the open, only to end up buying back those positions late in the day once the stock market started to rally. We have talked about how the fundamentals of the cash fed and feeder cattle market are supportive enough to promote higher cash and futures prices, and I think this train of thought is what prevailed by the close of trade yesterday. With that said, we will keep an eye on overhead resistance levels mentioned earlier in the week at $85 in Feb live cattle, $88.50 on April live cattle, and $95 in March feeder cattle to determine price direction for next week. Closing above these price points by the close today would keep the market positive into next week in my opinion. Holding below these resistance levels by the close today would keep risk of lower prices in the cards. Stock futures are pointing to a higher open, which should support a $.20-$.30 higher open to live and feeder cattle futures this morning. Keep in mind the futures market will be closed Monday in observance of Martin Luther King Day. 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.

2009-01-15T06:20:00.001-08:00

January 15, 2009

Good Morning from the Chicago Board of Trade,

Cash Cattle Situation and Outlook:

We saw a light test of the northern dressed trade in feedlot cattle yesterday, with one of the smaller Omaha packers paying $1.36-$1.38 dressed on about five thousand head of cattle in eastern Nebraska and western Iowa. The $1.38 was said to be paid on a package of high grading cattle early in the morning and those bids were pulled back to $1.36 late where the majority of the trade took place. There was also about a thousand head of hedged cattle that reportedly sold in Kansas at $83. The rest of feeding country was quiet with feedlots resisting bids from the major packers of $82 live and $1.30-$1.32 dressed looking to get $1.36-$1.38/$86-$87. The beef market continues to trade at higher money with the choice cutout closing back near $1.50 for the first time since the first of December. However, there is a larger offering of fed cattle for the packer to chose from this week and there are a few packing companies that are a little short bought and as such are cutting production hours to manage margins from the supply side. There was a pretty choppy trade in the futures yesterday, however front month contracts did manage to come back from steep losses early in the session. Still feel that even with all the gyrations in the market that this weeks fed cattle trade should be no worse than steady, and if we were to see some strength in the futures today that there would be a very good possibility of $.50-$1 higher for feedlot cattle by the end of the week. Keep in mind that it was a mostly $84 live trade in the south last week and $1.34-$1.36 dressed in the north.

The salebarn trade of cattle saw mostly lower prices on the fed cattle yesterday. Sioux Falls, SD was calling their weekly fed cattle auction $1-$2 lower yesterday with the choice beef steers bringing $81-$83 and the choice Holsteins bringing $70-$72. Slaughter cows in Sioux Falls were being called $2-$3 lower with the bulk of the cutters and boners bringing $39-$45. Feeder cattle markets are mixed as we head into the end of the week, with some sales reporting higher results and some lower. Torrington, WY had an estimated run of 3,700 head yesterday with that market being called $3 higher on the cattle weighing under 700 lbs and $2 lower on cattle weighing over 700 lbs. The majority of the cattle weighing 6-8 were bringing $95-$100. There remains pretty good demand for feeder cattle to get placed into late spring/early summer fed cattle marketing timeframes and with the recent run of feeder cattle coming to market expected to taper off in the coming weeks, I would expect to see some support in the cash feeder cattle market.

Cash Beef Situation and Outlook:

Yesterdays kill was estimated at 112,000 head, which would be 5,000 head above last week and 10,000 head below the same day a year ago. The week-to-date kill now stands at 357,000 head, which would be 5,000 head above the same period a week ago with the industry looking for a 610,000 head production week. The boxed beef market was higher with the choice cutout closing $.64 higher to settle at $149.90 and the select cutout closing $.88 higher to settle at $142.81. Sales volume was good with 376 loads of beef sold (145.99 loads of choice fab cuts, 123.31 loads of select fab cuts, 18.36 loads of trim, 88.02 loads of grinds). The choice/select spread settled at $7.10 a loss of $.24.

The beef market was higher again yesterday on continued buyer demand for quick ship of middle meat product ahead of Valentines Day. Yesterday saw a solid performance in choice bone-in and boneless ribeyes with values gaining $.10-$.20 along with $.05-$.10 gains in bone-in and boneless strips. There was the usual buying in chuck and rounds cuts yesterday with clods and boneless rounds attracting the attention of some buyers yesterday. Steady to higher was the call for chuck rolls and short ribs yesterday. The ground beef market settled down yesterday with steady prices being paid on most coarse ground items. Boneless beef markets were mixed, with lower prices being paid on domestic cow 90’s and imported cow and bull grinding material. The fed cattle 50% trim was higher again yesterday with wtd ave prices now at $.80 a gain of $.15 since the first of the year. We could likely see the beef market cool down a bit as some of this near term buying gets wrapped up. Since last Thursday choice cutout values have gained $6.15 and select cutout values have gained $6.05 on pretty good volume. I don’t know if we will see a big break in the beef market, however to see the market stall out at current values shouldn’t be unexpected. Much will depend on how well packers manage production levels. The USDA and USMEF released November export data for beef and pork yesterday, with beef exports for the month of November running 14% above 2007 at 45,633 MT. Year-to-date Jan-Nov 2008 beef exports were 37% above the same period in 2007 at 582,270 MT. November pork exports were 4% above a year ago at 119,911 MT, with the ytd Jan-Nov total running 54% above the same period in 2007 at 1,463,566 MT. Beef exports for the week of January 2-8. 2009 are as follows:
Beef: Net sales of 7,900 MT were mainly for Mexico (2,500 MT), Vietnam (1,800 MT), Canada (1,700 MT), and South Korea (1,000 MT). Exports of 7,400 MT were mainly to Mexico (2,700 MT), South Korea (1,200 MT), and Vietnam (1,200 MT).
Futures Market Situation and Outlook:

February live cattle settled at $83.35 a loss of $.72, April live cattle settled at $86.82 a loss of $.75, and the June live cattle settled at $85.70 a loss of $.30. In the feeder cattle pit, January feeder cattle settled at $95.70 a loss of $.65, March feeder cattle settled at $94.62 a loss of $.27, and the April feeder cattle settled at $96.22 a loss of $.22. The reported CME feeder cattle index for 1/13/09 was $96.49 a loss of $.10. Live cattle spreads: Feb/April settled at -$3.47 a gain of $.02, April/June settled at $1.12 a loss of $.45, June/August settled at -$.55 a loss of $.07. Feeder cattle spreads: Jan/March settled at $1.07 a loss of $.37, March/April settled at -$1.60 a loss of $.05, April/May settled at -$1.20 a gain of $.17.

Yesterdays live cattle volume saw 46,387 contracts trade in the pit and 24,009 contracts trade on Globex. Live cattle open interest gained 145 contracts to come in this morning at 201,284. Yesterday’s feeder cattle volume saw 2,190 contracts trade in the pit and 727 contracts trade on Globex. Feeder cattle open interest gained 11 contracts to come in this morning at 20,712.

Live and feeder cattle futures had a wild ride yesterday with the market opening lower and trading sharply lower early on profit taking from Tuesday’s rally and weakness in equity and outside commodity markets. Once early selling dried up and word of steady to higher cash fed cattle prices being paid in Nebraska and Iowa hit Chicago, the market staged an impressive rally into the noon hour, only to have some of those gains trimmed going into the close due to the last day of the official “Goldman Roll”. Had it not been for the late roll of Feb longs into deferred month futures, we likely would have closed Feb higher on the day. June forward live cattle and March forward feeder cattle managed to hold onto most of their late session rally going into the close. It looks like the Goldman’s rolled about 8,000 cars late in the day, with Feb open interest going down 8,740 and April OI going up 6,267 and June OI going up 1,948. This morning could see a reprieve of selling pressure in cattle futures as most of the index fund rebalancing should be completed and the official roll period of the Goldman Sachs Commodity Index is over. We managed to hold some of the weekly support I was looking at yesterday basis $81 in Feb and $85 in April live as well as $92 in March feeders. We still have plenty of overhead resistance to deal with though, as $85 in Feb live and $88.50 in April live will be tough barriers to get through by Friday. March feeders ran right into stiff resistance at $95 on the midday rally yesterday, and this, along with the above mentioned live cattle resistance prices, will need to be taken out on a closing basis in order to negate some of the recent bearishness. There should continue to be some optimism towards the cash fed cattle trade this week and I think we are finding willing spec short covering on recent breaks in the market, which should continue to provide a level of support under live and feeder cattle futures for the balance of the week. Overnight stock futures are pointing to a steady to slightly lower open. 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.

2009-01-14T06:41:00.001-08:00

January 14, 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 packer bids evident and feedlot offering prices remaining at $87-$88 live and $1.38 dressed. Higher settlements on the futures board and in the beef market along with winter weather in the northern feeding sections of the country should continue to support ideas of a higher cash trade by the end of the week. Beef demand and movement hasn’t been too bad this week and it is said that a few packers could be getting a little short bought on inventory. Showlists are a little larger in most feeding regions again this week, which along with Jan contract cattle being available could give packers a little leverage in this weeks price negotiations. I will still call for a mostly steady to $.50-$1 higher cash fed cattle trade by the end of the week.

Cash Beef Situation and Outlook:

Yesterdays kill was estimated at 126,000 head, which would be even with a week ago and 1,000 head below the same day a year ago. Monday’s slaughter was revised down to 119,000 head, which now puts the week-to-date kill at 245,000 head, even with the same period a week ago with the industry looking for a 610,000 head production week. The boxed beef market was higher yesterday with the choice cutout closing $1.66 higher to settle at $149.26 and the select cutout closing $2.47 higher to settle at $141.93. Sales volume was good with 272 loads of beef sold (118.68 loads of choice fab cuts, 79.62 loads of select fab cuts, 33.07 loads of trim, 40.85 loads of grinds). The choice/select spread settled at $7.33 a loss of 4.81.

The beef market continued to trend higher yesterday on renewed interest in middle meats from the retail and wholesale sectors of the market. There continues to be very good demand for ground beef and end meats and this is helping packers to advance cutout values. Continue to look for a mostly steady to higher market for the balance of the week.

Futures Market Situation and Outlook:

February live cattle settled at $84.07 a gain of $1.17, April live cattle settled at $87.57 a gain of $1.07, and the June live cattle settled at $86.00 a gain of $.55. In the feeder cattle pit, January feeder cattle settled at $96.35 a gain of $1.15, March feeder cattle settled at $94.90 a gain of $1.57, and the April feeder cattle settled at $96.45 a gain of $1.37. The reported CME feeder cattle index for 1/12/09 was $96.59 a gain of $.11. Live cattle spreads: Feb/April settled at -$3.50 a gain of $.10, April/June settled at $1.57 a gain of $.52, and the June/August settled at -$.47 a gain of $.25. Feeder cattle spreads: Jan/March settled at $1.45 a loss of $.42, March/April settled at -$1.55 a gain of $.20, and the April/May settled at -$1.37 a gain of $.05.

Yesterdays live cattle volume saw 34,921 contracts trade in the pit and 21,811 contracts trade on Globex. Live cattle open interest de3clined 2,794 contracts to come in this morning at 201,142. Yesterday’s feeder cattle volume saw 2,506 contracts trade in the pit and 745 contracts trade on Globex. Feeder cattle open interest declined 183 contracts to come in this morning at 20,710.

Live and feeder cattle futures settled higher yesterday on ideas the cash market would be no worse than steady this week. There was some short covering from last weeks sell off and continued unwinding of bear spreads linked to lower corn and winter weather hitting cattle feeding country. This morning the market looks like it is going to open lower on weakness in the stock market. We should find some support under the market on a lower open however as fundamentals of the fat cattle market remain friendly enough to support a higher cash trade for this week. I will continue to look for weekly support in Feb live cattle at $81 and April live cattle at $85 to hold. March feeders continue to look positive to me above $92. Look for a $.25-$.50 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.

2009-01-13T06:49:00.001-08:00

January 13, 2009

Good Morning from the Chicago Board of Trade,

Cash Cattle Situation and Outlook:

The cash feedlot trade was untested yesterday with showlist assembly and distribution the main feature of the day. Packers were not bidding on any cattle so early in the week, with feedlots pricing a mostly larger offering at $87-$88 live and $1.36-$1.38 dressed. The cash feedlot trade likely won’t be tested until late in the week as packers work off of last weeks buy and Jan contract and formula cattle. The beef market acts pretty good for the first part of the week and there seems to be some demand from the wholesale and retail sectors of the equation. The weather is going to get tough in the northern plains cattle feeding regions by midweek and this along with a futures board that so far seems to found a little stability will have me calling for a mostly steady to $.50 higher market. Cattle selling in the salebarns yesterday were bringing lower money on the fat cattle as that market adjusts to last weeks lower feedlot sales. Slaughter cows were mostly steady to instances of $1 lower. Feeder cattle markets were a little softer reflecting the lower futures and cash markets from last week. Oklahoma City was calling their market steady to $1 lower by the end of the day yesterday and this was the case at many sales across the country. Joplin, MO had a big run of 10,000 head yesterday with that market called mostly steady. Look for feeder cattle to remain mostly steady to $1 lower/$1 higher depending on what sale you are at.

Cash Beef Situation and Outlook:

Yesterday’s cattle kill was estimated at 122,000 head, which would be 3,000 head above last week and 7,000 head below the same day a year ago. The industry will be looking for a 610,000 head production week. The boxed beef market was higher yesterday with the choice cutout closing $2.12 higher to settle at $147.60 and the select cutout closing $1.71 higher to settle at $139.46. Sales volume was typical for a Monday at 261 loads of beef sold (110.70 loads of choice fab cuts, 52.46 loads of select fab cuts, 30.99 loads of trim, and 67.32 loads of grinds). The choice/select spread settled at $8.14 a gain of $.41.

The beef market found good buyer demand from the wholesale market yesterday. Of interest was buying in choice, select, and no-roll ribeyes, short loins, and PSMO’s to the tune of $.10-$.20, as guys get product into position for upcoming Valentine Day features. There was the usual buying in the end meats from retail, which kept steady to higher prices in chuck and round items. There was another strong day in chuck roll and short rib pricing with gains of $.05-$.10 noted. Ground beef markets were once again higher on good demand and movement as this is the shining star for the retailer right now. Boneless beef markets were higher yesterday, especially fed cattle 50’s with product said to be falling short of demand right now. Continue to look for a higher trending beef market into the end of the week.

Futures Market Situation and Outlook:

February live cattle settled at $82.90 a loss of $.20, April live cattle settled at $86.50 a loss of $.32, and the June live cattle settled at $85.45 a loss of $.25. In the feeder cattle pit, January feeder cattle settled at $95.20 a gain of $1.10, March feeder cattle settled at $93.32 a gain of $.65, and the April feeder cattle settled at $95.07 a gain of $1.07. The reported CME feeder cattle index for 1/9/09 was $96.48 a loss of $.04. Live cattle spreads: Feb/April settled at -$3.60 a gain of $.12, April/June settled at $1.05 a loss of $.07, and June/August settled at -$.72 a gain of $.27. Feeder cattle spreads: Jan/March settled at $1.87 a gain of $.45, March/April settled at -$1.75 a loss of $.42, and April/May settled at -$1.42 a gain of $.17.

Yesterdays live cattle volume saw 38,582 contracts trade in the pit and 15,486 contracts trade on Globex. Live cattle open interest declined 4,407 to come in this morning at 203,923. Yesterday’s feeder cattle volume saw 2,830 contracts trade in the pit and 580 contracts trade on Globex. Feeder cattle open interest gained 299 contracts to come in this morning at 20,886.

Live cattle futures were under a degree of pressure on continued “Goldman Rolling” and index fund liquidation. Yesterday was the 3rd day of the Goldman Roll and we saw some stuff rolled into April; however there was some outright liquidation as open interest went down 4,407 yesterday. Another big feature of the day was unwinding bear spreads that were put on the last couple of weeks when corn was rallying. August open interest alone went down 1,000 cars because of this. Weekly support in live cattle futures should continue to be found at $81 in Feb and $85 in April. I think we would need to see futures get back above $85 in Feb and $88.50 in April to negate some of last weeks bearishness. Weekly feeder support comes into play at $90.50 on the March, with the market needing to get back above $94 to keep rally attempts alive. We don’t have as much outside commodity selling to contend with this morning, so I will call for a $.10-$.20 higher open to live and feeder cattle futures. 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.

2009-01-12T06:45:00.000-08:00

January 12, 2009

Good Morning from the Chicago Board of Trade,

Cash Cattle Situation and Outlook:

We left last week with a fed cattle market that trades mostly $3-$5 lower with the bulk of business being done on Thursday. Texas feedlots reported selling 31,614 head of fed cattle for $84, Kansas yards sold 25,603 head of fed cattle for $84 live and $131.50 dressed, Nebraska feedlots sold 48,583 head of fed cattle for $83 live and $1.33-$1.35 dressed, Colorado feedlots sold 6,324 head of fed cattle for $83 live and $1.33 dressed, and Iowa feedlots sold 18,399 head of fed cattle for $83 live and $1.33-$1.35 dressed. Friday saw some light cleanup trade of 2,500-5,000 head apiece in Kansas, Nebraska, Iowa, and Colorado at prices steady with Thursday. Lower futures prices linked to fund liquidation and spec/technical selling forced cattle feeders to accept lower money for their live inventory last week. Compared to a couple weeks ago, feeder cattle markets were $4-$10 higher as we saw our first true test of the market since the holiday’s. Cattle feeders came back from the holiday break and actively pursued cattle to fill empty pens and fill what many perceive to be a marketing hole of fed cattle by late April/May. Last weeks slaughter cow market was mixed, $1 higher to $1 lower depending on what part of the country you were in. Looking into this week, we will have to see if the futures board can stabilize to keep the fed cattle market from moving any lower. Packers say they came out of last week with beef inventories that are very manageable after offering deep discounts on items that wouldn’t move and eventually getting said items sold. There will likely be more cattle offered for sale again this week in the north, however the weather in that part of the country isn’t going to be very good. The fed cattle market will likely trade on the defensive early with the possibility of prices firming late. The big feeding companies were very aggressive in feeder cattle procurement last week and I would expect to see more of the same this week. Slaughter cows should find some support this week, as winter weather in the northern plains will hamper livestock movement.

Cash Beef Situation and Outlook:

Last weeks cattle slaughter was estimated at 601,000 head, which included a Friday kill of 114,000 head and a Saturday kill of 9,000 head. The weekly slaughter was 90,000 head above the previous week and 33,000 head below the same week a year ago and produced an estimated 470-mil lbs of beef. Year-to-date beef production is running 27% below last year at 597 mil lbs with ytd cattle slaughter running 28% below last year at 764,000 head. From Friday to Thursday of last week choice boxed beef gained $.56 to settle at $143.75 and select boxed beef gained $1.26 to settle at $136.76 on increased movement of 1,181 loads of fabricated cuts sold. Friday saw further gains in the beef market with the choice cutout closing $1.73 higher to settle at $145.48 and the select cutout closing $.99 higher to settle at $137.75. Sales volume on Friday was light with 223 loads of beef sold (77.34 loads of choice fab cuts, 74.75 loads of select fab cuts, 33.43 loads of trim, 37.79 loads of grinds). The choice/select spread settled at $7.73 a gain of $.74 for the day and $.04 for the week.

Packers came into last week with push lists consisting of ribeyes, short loins, and peeled tenderloins that they needed to move. By Wednesday they had offered deep price reductions on said items and by Friday had most of the burdensome inventory cleared. End meats moved very well all of last week on good demand from retail and wholesale buyers along with grinders. Ground beef demand is very strong right now, and as a result we saw higher prices and very good movement all last week in the coarse ground market, so much so that grinders were buying two-piece and boneless chucks to put into the grind to suffice demand. The increased demand from the grinding sector also supported 90% cow beef and 50% fed cattle trim values. There was also said to be some light export demand supporting chuck roll and short rib values. I would look for a mostly steady beef market early this week as manageable inventories of beef to sell and reduced production schedules last week has packers optimistic towards the beef market coming into this week. There is talk that there will be active steak features going into Valentines Day, which along with sharply lower price levels on ribeyes, strip loins, and short loins the last several weeks, was thought to be price supportive.

Futures Market Situation and Outlook:

For the week, February live cattle lost $4.00 to settle at $83.10, April live cattle lost $3.93 to settle at $86.82, and the June live cattle lost $2.30 to settle at $85.70. In the feeder cattle pit for the week, January feeder cattle lost $1.50 to settle at $94.10, March feeder cattle lost $2.85 to settle at $92.67, and the April feeder cattle lost $2.15 to settle at $94.00. The reported CME feeder cattle index for 1/8/09 was $96.52 a gain of $.09 for the day and $3.60 for the week. For the week in live cattle spreads: Feb/April lost $.07 to settle at -$3.72, April/June lost $1.63 to settle at $1.12, and June/August lost $1.15 to settle at -$1.00. For the week in feeder cattle spreads: Jan/March gained $1.35 to settle at $1.42, March/April lost $.67 to settle at -$1.32, and April/May gained $.10 to settle at -$1.60.

Fridays live cattle volume saw 37,939 contracts trade in the pit and 16,227 contracts trade on Globex. Live cattle open interest declined 1,695 contracts to come in this morning at 208,318. Friday’s feeder cattle volume saw 2,075 contracts trade in the pit and 567 contracts trade on Globex. Feeder cattle open interest declined 1 contract to come in this morning at 20,591. For the week live cattle open interest declined 7,232 and feeder cattle open interest declined 31.

The latest commitment of traders report for business through last Tuesday showed in live cattle that small funds were net short 10,482 a decline of 4,466 shorts. Commercial traders were net short 68,555 contracts of live cattle a gain of 7,211 shorts. Index fund traders were net long 100,332 contracts of live cattle a gain of 1,705 contracts. Small spec traders were net short 21,125 contracts of live cattle a decline of 1,039 contracts. In the feeder cattle, small funds were net short 2,655 a decline of 199 shorts. Commercial traders were net long 421 contracts of feeder cattle a decline of 471 shorts. Index fund traders were net long 6,467 contracts of feeder cattle a decline of 324 longs. Small spec traders were net short 4,233 contracts of feeder cattle a decline of 596 shorts.

Last weeks futures market was plagued by long profit taking after the recent rally in prices, technical selling, and index fund liquidation. This forced cash fed cattle prices lower on the week and we will need to see some stability in the futures by midweek this week in order to stave off further losses in the cash market. The USDA released final production and carryout numbers for grains this morning and the numbers look pretty bearish for corn, beans, and wheat as quarterly grain stocks and 08/09 carryout projections were all well above pre-report estimates. On the meat numbers, USDA lowered 08 beef production 30 mil lbs and left 09 production numbers alone at 26.642 bil lbs. The USDA also raised 08 beef imports 30 mil lbs and raised 09 imports 85 mil lbs on strength in the U.S. dollar. The USDA raised 08 exports 15 mil lbs to 1.875 bil and left 09 exports alone at 1.920 bil. 2009 Pork production was lowered 90 mil lbs and 09 poultry production was lowered 198 mil lbs reflecting recent liquidation in those markets. The USDA numbers paint some optimism towards meat markets for 2009, so long as we can see some recovery in U.S. and world economies. This morning, outside commodity markets are all lower and they are calling corn and wheat down $.10-$.15 and beans down $.20-$.25 on the open. This likely won’t bode well for live and feeder cattle futures on the open either and I would look for cattle to be lower on the open and most of the day today in sympathy with other commodity markets. First weekly support for Feb live cattle will be found at $81, April live at $85, and March feeders at $90.50. Feeder cattle should find the most support this week as there remains good support for cash feeders in the country. Live cattle futures will likely be under pressure early this week as the market prices a lower fed cattle trade for this week and waits to see how early week beef demand plays out. Look for a $.10-$.30 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.

2009-01-09T06:30:00.000-08:00

January 9, 2009

Good Morning from the Chicago Board of Trade,

Cash Cattle Situation and Outlook:

Yesterdays cash fed cattle market turned fairly active with live sales running $2-$3 lower and dressed sales running mostly $4 lower when compared to the previous week. Cattle sold in Texas for mostly $84-$85 on about 4,000 head, Kansas feedlots sold approximately 12,000 head for $84 live, Nebraska sold approximately 20,000 head for $1.34-$1.35, Colorado feedlots sold 1,200 head for $83-$83.50 live, and Iowa feedlots sold 3,000 head of fed cattle for $1.32-$1.36 dressed. Numbers of cattle sold look to be moderate and there will certainly be some cleanup trade today, likely steady with yesterdays market depending on what the board does. Believe the drop in this weeks cash fed cattle market was a direct result of the lower futures board, and we should begin to see some of that selling in the futures subside in the next day or two as we are getting some of the open interest that has been talked about out of the market. We have brought the cash market back into $83-$84 support and would expect the market to hold together here give or take a dollar and trade sideways to higher from here. Going home for the weekend, slaughter cows carry a mixed tone, some higher and some lower depending on what part of the country you are in. Feeder cattle sales remain strong, with many sales yesterday like Pratt, KS reporting $2-$4 higher across the board on all classes of feeders with very good buyer demand. This is especially true on 7-8 weight cattle that will finish by late spring and I would expect this trend to continue into next week.

Cash Beef Situation and Outlook:

Yesterdays kill was estimated at 126,000 head, which would be 126,000 head above a week ago and 3,000 head below the same day a year ago. The week-to-date kill now stands at 478,000 head, which would be 1,000 head below the same period a week ago with the industry looking for a 620,000 head production week. The boxed beef market was $.26 higher on the choice cutout to settle at $143.75 and $.52 higher to settle at $136.76 on the select cutout. Sales volume was good with 420 loads of beef sold (127.12 loads of choice fab cuts, 169.50 loads of select fab cuts, 40.93 loads of trim, 82.14 loads of grinds). The choice/select spread settled at $6.99 a loss of $.26.

The beef market was mostly steady to higher yesterday, with the exception of choice/select rib roasts. The rest of the complex was holding its own with price strength showing up once again in two-piece chucks, chuck rolls, knuckles, and outside rounds. There was another round of higher price transactions in the ground beef market on good movement. Boneless beef markets were higher as well, again most of that strength showing up in the fed cattle 50’s. Packers did a good job of clearing backlogged inventory this week and head into the weekend with manageable inventory levels. For this reason I will continue to look for a mostly steady to higher beef market into the first part of next week.

Futures Market Situation and Outlook:

February live cattle settled at $83.15 a loss of $2.62, April live cattle settled at $86.95 a loss of $1.97, and the June live cattle settled at $85.37 a loss of $1.07. In the feeder cattle pit, January feeder cattle settled at $93.50 a loss of $1.00, March feeder cattle settled at $92.25 a loss of $1.02, and the April feeder cattle settled at $93.50 a loss of $.77. The reported CME feeder cattle index for 1/7/09 was $96.43 a gain of $.31. Live cattle spreads: Feb/April settled at -$3.80 a loss of $.65, April/June settled at $1.57 a loss of $.90, and June/August settled at -$.72 a loss of $.22. Feeder cattle spreads: Jan/March settled at $1.25 a gain of $.02, March/April settled at -$1.25 a loss of $.25, April/May settled at -$1.42 a gain of $.40.

Yesterdays live cattle volume saw 43,662 contracts trade in the pit and 20,831 contracts trade on Globex. Live cattle open interest declined 7,474 contracts to come in this morning at 210,095. Yesterday’s feeder cattle volume saw 3,257 contracts trade in the pit and 1,187 contracts trade on Globex. Feeder cattle open interest gained 524 contracts to come in this morning at 20,632.

Live and feeder cattle futures suffered another round of heavy selling yesterday linked to the beginning of the “Goldman Roll” and index fund liquidation. We have been hearing the last couple of days about how the index fund community needs to rebalance their meat position, and yesterday we saw Feb open interest go down 8,351 contracts with total live cattle open interest going down 7,474. Some of this was rolled, however it would appear that there was some sizeable outright liquidation. Since last Friday Feb live cattle open interest has gone down approximately 17,000 cars. Again, some of this was rolled into deferred month fats; however there has been a portion that was simply outright liquidated. This would lead me to believe that we could be getting close to seeing some of this selling subside. We could see another day or two of live cattle liquidation; however I think we are getting close to wrapping that up and would want to be a buyer on any further weakness. Feeders on the other hand don’t have to break that much more from where they are at, due to the index guys not having to liquidate feeders and we have very good cash strength in the country. For this reason I would look to be a buyer of feeder cattle today, and if they come in and whack the fat cattle at the end of the day again you can buy them cheaper. If not, and the market rallies, you at least have the feeders on to help offset paying up for the fat cattle. Look for a $.10-$.20 higher open to live and feeder cattle this morning. Have a Good Weekend and Trade Well!!!

Any one wanting a more detailed report on the cattle and beef markets including fundamental, chart and technical analysis, plus spec/hedge recommendations for packers, processors, producers, and meat buyers feel free to contact me by phone or e-mail to set up a free trial.

There is risk in trading futures and options.

Have a Good Day,

Troy Vetterkind
Vetterkind Cattle Brokerage, LLC
Chicago Board of Trade
141 West Jackson Blvd.
Suite 1220A
Chicago, IL 60604
1-888-299-1477 Toll Free
1-312-896-2068 Direct
1-708-224-5985 Mobile
tvetterkind@linngroup.com

Reproduction or rebroadcast of any portion of this information is strictly prohibited without the written permission of the Linn Group, Inc. the information reflected herein is derived from sources believed to be reliable; however, this information is not guaranteed as to its accuracy or completeness. Opinions expressed are subject to change without notice. This material and any view expressed herein are provided for informational purposes only and should not be construed in any way as an inducement to buy or sell commodity futures or options contracts. The Linn Group and its officers, directors, employees and affiliates may take positions for their own accounts in contracts referred to herein. Trading futures involves risk of loss. Past performance is not indicative of future results.

2009-01-08T06:40:00.000-08:00

January 8, 2009

Good Morning from the Chicago Board of Trade,

Cash Cattle Situation and Outlook:

The cash fed cattle market was at a standstill again yesterday as packers continue to not be interested in bidding on cattle, although there were a few light dressed bids of $1.35-$1.36 in the northern tier of feeding states. Feeders remain priced at $89-$90 live in the south and $1.40 dressed in the north. Yesterday morning I wrote that we should be able to hold the cash market steady this week for various reasons, barring any kind of sharp sell off on the futures board. Well, we got the sharp sell off, and now it looks as though steady might be a victory for cattle feeders, with $.50-$1 lower now likely in the cards. Talk of production cutbacks came to fruition in a big way yesterday with the daily kill being estimated at 107,000 head. It appears as though some of this near term quick ship business for beef could be getting satisfied and interest going into next week is starting to wane. This type of market sentiment along with lower settlements on the futures board is likely going to be a price limiting factor for the cattle market late this week and early next. Again though, I would view this as a temporary situation as I think the fundamentals of the fed cattle market are such to support a cash fed cattle trade in the mid-upper $80’s through January and lower to mid $90’s by the end of February.

The salebarn trade of cattle continues to be higher with fat cattle in Sioux Falls, SD yesterday bringing $84-$85 on the beef steers and $70-$73 on the Holstein steers. Slaughter cows in Sioux Falls were bringing $42-$49 with a couple of big white cows bringing up to $68. Feeder cattle sales continue to turn in higher results with El Reno, OK calling their sale $4-$7 higher on continued good buyer demand, especially on bigger cattle that will finish by late spring. 500 lbs steers in El Reno yesterday were bringing $104-$116, 600 lbs steers were bringing $94-$104, 700 lbs steers were bringing $93-$98, and 800 lbs steers were bringing $88-$98.

Cash Beef Situation and Outlook:

Yesterdays kill was estimated at 107,000 head, which would be 12,000 head below last week and 13,000 head below the same day a year ago. The week-to-date kill now stands at 352,000 head, which would be 4,000 head above the same period a week ago with the industry looking for a 620,000 head production week. The boxed beef market was lower yesterday with the choice cutout closing $1.31 lower to settle at $143.49 and the select cutout closing $.01 lower to settle at $136.24. Sales volume was very good with 547 loads of beef sold (235.93 loads of choice fab cuts, 161.14 loads of select fab cuts, 40.30 loads of trim, 109.31 loads of grinds). The choice/select spread settled at $7.25 a loss of $1.30.

The beef market was mostly lower yesterday as the last several days of lower ribeye and PSMO prices were being factored into cutout values. Packers purged some backlogged inventory yesterday by offering discounts on ribeyes, short loins, top butts, and peeled tenderloins. This strategy worked as we saw very good sales volume of 547 loads of beef sold with the majority of the increased trading volume comprised of the above mentioned cuts. We also saw increased loads counts along with higher price levels on coarse ground beef. For the most part chuck and round cuts were individually trading $.02-$.05 higher yesterday as there is still retail demand for many of these items. Boneless beef items were trading higher yesterday, especially the 50% fed cattle trim, as yesterdays reduced slaughter and intentions for more of the same into the end of the week had the processing sector of the market scrambling to get some product around them. Talk of further slaughter reductions into early next week should be a supporting factor to cutout values by early next week. Good support should be found on choice cutout values at $1.40 and select cutout values at $1.34-$1.35, give or take a couple of dollars. Beef exports for the week of December 26, 2008-January 1, 2009 are as follows:
Beef: Net sales reductions of 1,000 MT reported for 2009 marketing year (which began Jan 1.) were mainly for Mexico (400 MT), Taiwan (100 MT), and Peru (100 MT). A total of 16,600 MT were outstanding on Dec. 31 and carried over to the 2009 marketing year. Exports of 7,200 MT reported for Dec. 26-31, were mainly for Mexico (3,500 MT) and South Korea (1,700 MT). Accumulated exports for 2008 of 506,900 MT were up 28 percent from the 397,400 MT exported during the previous year. Exports of 300 MT for Jan. 1 were for Mexico (200 MT) and Canada (100 MT).
Futures Market Situation and Outlook:

February live cattle settled at $85.77 a loss of $2.77, April live cattle settled at $88.92 a loss of $2.40, and the June live cattle settled at $86.45 a loss of $1.75. In the feeder cattle pit, January feeder cattle settled at $94.50 a loss of $1.62, March feeder cattle settled at $93.27 a loss of $2.70, and the April feeder cattle settled at $94.27 a loss of $2.72. The reported CME feeder cattle index for 1/6/09 was $96.12 a gain of $.67. Live cattle spreads: Feb/April settled at -$3.15 a loss of $.37, April/June settled at $2.47 a loss of $.65, and June/August settled at -$.50 a loss of $.10. Feeder cattle spreads: Jan/March settled at $1.22 a gain of $1.07, March/April settled at -$1.00 a gain of $.02, and April/May settled at -$1.82 a loss of $.55.

Yesterdays live cattle volume saw 22,768 contracts trade in the pit and 12,463 contracts trade on Globex. Live cattle open interest gained 698 contracts to come in this morning at 217,534. Yesterday’s feeder cattle volume saw 3,619 contracts trade in the pit and 1,864 contracts trade on Globex. Feeder cattle open interest declined 225 contracts to come in this morning at 20,125.

Live and feeder cattle futures settled with sharp losses yesterday on some continued long profit taking after the recent rally in prices. There were also some concerns in the market that if packers are going to get serious about cutting kills into early next week that the cash fed cattle market would not live up to early week expectations. I think another factor in the sell off was positioning ahead of the “Goldman Roll” and this index fund rebalancing, which is supposed to begin today. Estimates vary between 15,000-19,000 cattle and 20,000-22,000 hog contracts that the index fund trader needs to move into different markets. These numbers seem high to me but it is quite apparent that they need to move some money around and this is likely going to be a price limiting factor until they get some of this stuff done. As mentioned in previous writing’s and as outlined above, such a break in the futures market would be a buying opportunity in my opinion as fundamentals of the cattle market would point to higher prices by spring. It will be interesting to see how the market handles some of this money movement over the course of the next couple of days. I would be prepared to take advantage of extreme moves in the market should they occur. Support numbers that I have for the rest of the week are as follows: Feb live, $85 and below that $83, April live, $88.80 and below that $87, March feeders, $93 and below that $90. 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.

2009-01-07T06:26:00.000-08:00

January 7, 2009

Good Morning from the Chicago Board of Trade,

Cash Cattle Situation and Outlook:

Yesterdays feedlot trade of fed cattle was non-existent as packers were not tendering any bids and feedlots pricing a mostly larger fed cattle offering at $89-$90 live and $1.40 plus dressed. Cattle feeders resolve to get higher money for their cattle this weeks has been solidified by higher settlements on the futures board and a beef trade that so far this week is no worse than steady. Packers contend that there is more cattle to chose from this week and that the beef continues to be a challenge to move at profitable levels and as such are not willing to bid on anything early in the week. It would still appear as though the cash fed cattle market could be higher again this week as beef movement isn’t all that bad and there looks to be some business being conducted out forward, which I think will keep packers in the market wanting inventory. There has been some talk of production cutbacks towards the end of the week as packers try to improve on profitability, which may be a price limiting factor in the northern sections of feeding country where showlists are larger this week. For now and unless we get a crash on the board, I will still call for a mostly steady to $.50-$1 higher market that takes place at $87-$88 live in the southern feeding states and $1.38-$1.40 dressed in the northern feeding states. While canvassing yesterday’s auction market trade of cattle we see fed cattle and slaughter cows trading through the nations salebarns are bringing mostly steady to instances of $1-$2 higher money, with most feeder cattle sales solidly $2-$4 higher. First of the year demand for feeder cattle to get placed into the spring and early summer fed cattle marketing timeframe remains very good and I would expect to see higher prices on feeder cattle (i.e. 600 lbs-800 lbs) for the next couple of weeks.

Cash Beef Situation and Outlook:

Yesterdays kill was estimated at 126,000 head, which would be 2,000 head below last week and 3,000 head below the same day a year ago. The week-to-date kill now stands at 245,000 head, which would be 8,000 head below the same pace last week, as the Monday slaughter was revised down to 119,000 head. The industry will look for a 620,000 head production week. The boxed beef market was mixed yesterday with the choice cutout closing $.17 lower to settle at $144.80 and the select cutout closing $.61 higher to settle at $136.25. Sales volume was good with 313 loads of beef sold (121.04 loads of choice fab cuts, 103.83 loads of select fab cuts, 41.78 loads of trim, 45.90 loads of grinds). The choice/select spread settled at $8.55 a loss of $.78.

The beef market continues to exhibit some strength in end meat pricing, however it is said that perhaps some of this near term buying could be starting to dry up. Yesterday saw decent gains in choice and select chuck rolls, clods, inside/outside rounds and gooseneck rounds for quick ship. Ground beef markets were also higher yesterday on continued retail demand. Packers cite continued challenges in moving ribs and peeled tenders and there was some discounting needed in select strips and top butts yesterday as well. Domestic boneless beef items were a little lower yesterday as more product was offered to the market. Imported boneless bull and cow beef was a tick higher yesterday. It sounds like some of the near term domestic demand for retail beef could be getting satisfied, which could flatten out cutout values for the rest of the week.

Futures Market Situation and Outlook:

February live cattle settled at $88.55 a gain of $1.00, April live cattle settled at $91.32 a gain of $.92, and the June live cattle settled at $88.20 a gain of $.27. In the feeder cattle pit, January feeder cattle settled at $96.12 a loss of $.87, March feeder cattle settled at $95.97 a loss of $.75, and the April feeder cattle settled at $97.00 a loss of $.45. The reported CME feeder cattle index for 1/5/09 was $95.45 a gain of $.93. Live cattle spreads: Feb/April settled at -$2.77 a gain of $.07, April/June settled at $3.12 a gain of $.65, and June/August settled at -$.40 a loss of $.50. Feeder cattle spreads: Jan/March settled at $.15 a loss of $.12, March/April settled at -$1.02 a loss of $.30, and April/May settled at -$1.27 a gain of $.27.

Yesterdays live cattle volume saw 24,482 contracts trade in the pit and 19,607 contracts trade on Globex. Live cattle open interest gained 1,551 contracts to come in this morning at 216,984. Yesterday’s feeder cattle volume saw 3,728 contracts trade in the pit and 1,158 contracts trade on Globex. Feeder cattle open interest declined 486 contracts to come in this morning at 20,328.

The live cattle futures market settled with solid gains yesterday, however feeder futures faltered towards the end of the session with long profit taking and ideas the market got far enough ahead of the cash market for the time being as reasons for the sell off. Fat cattle futures performed well yesterday and closed above the resistance levels I was talking about at $88 in the Feb and $91 in the April; however the sell off in the feeder cattle is a little concerning to me as the feeders have been leading us higher on this rally. Perhaps if the beef were to get a little sloppy towards the end of the week and packers come through with cutting kills and manage to hold the cash market steady we may see live and feeder cattle futures back up a bit. Also of concern for the near term futures market is the upcoming “Goldman Roll”, and what could be some index fund rebalancing of livestock holdings, which could create some sell pressure. Overall I still think live and feeder cattle futures can and will move higher (i.e. mid-$90’s on the fats and lower $100’s on the feeders), but given the recent rally and overbought market conditions coupled with some of this upcoming fund business, we may see a minor set back in the market. It would be a break I would want to buy if it were to transpire. 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.

2009-01-06T06:32:00.001-08:00

January 6, 2009

Good Morning from the Chicago Board of Trade,

Cash Cattle Situation and Outlook:

The cash fed cattle market was untested yesterday with no packer bids being posted and feedlot offering prices beginning the week at $89-90 live and $1.40 plus dressed. A look at last weeks trade shows Texas/OK/NM feedlots selling 30,154 head of fed cattle (27,793 previous week) for $87 live. Kansas feedlots sold 30,487 head of fed cattle (36,927) for $86 live and $1.36-$1.37 dressed. Nebraska feedlots sold 54,076 head of fed cattle (64,671) for $85-$86 live and $1.38 dressed. Colorado feedlots sold 5,730 head of fed cattle (8,665) for $86 live and $1.35-$1.36 dressed. And Iowa/MN feedlots sold 20,387 head of fed cattle (25,462) for $86 live and $1.37 dressed. Compared to the week prior and the corresponding showlist numbers, movement looked pretty good in the south and moderate in the north, which is giving us a larger offering of cattle in the north (i.e. +20,000 head) and mostly steady to a couple thousand head smaller in the south. This would make some sense as the north is where we placed the majority of our bigger grass cattle late this summer and this is where we will see showlist numbers increase for the next several weeks. This is also likely to keep northern basis under a little pressure and keep premiums for fed cattle skewed to the south. This week’s cash fed cattle market still looks positive with higher settlements in both the futures and boxed beef markets yesterday. There seems to be some fill-in beef business after the holiday’s, which will keep packers in the market for fed cattle to process. I think we could see a mostly steady to possibly $.50-$1 higher trade by late week at $87-$88 in the south and $1.36-$1.39 dressed in the north. Rallies in the cash fat cattle market will be kept in check throughout the course of the next several weeks as fed numbers become more plentiful in the north, however an expected increase in domestic and foreign beef demand should keep support in the mid-$80’s viable.

Yesterday’s salebarn trade of cattle saw mostly higher prices with fed cattle bringing $1 higher on the beef cattle at $83-$86 and $71-$75 on the Holsteins. Slaughter cows were steady to instances of $1 lower at $35-$45 on the cutter and boning utility cows and $48-$53 on the breakers and white cows. Feeder cattle sales however begin the week solidly higher with Oklahoma City calling their market $4-$7 higher on the bigger cattle and $5-$10 higher on the calves with buyer demand on all classes of cattle called very good. The bulk of the 500 lbs steer calves in OKC yesterday brought $100-$116, the 6 weight steers brought $94-$104, the 7 weight steers brought $94-$99, and the 8 weight steers brought $92-$97. Due to reduced 4th quarter placements into the nation’s feedlots, there remains plenty of empty pen space and what many perceive as a growing marketing hole in late March through early June. Buyers are actively beginning to seek bigger feeders that will place into that marketing timeframe and as such we can expect to see continued strength in the cash feeder cattle market so long as the cash fat cattle or fed cattle board doesn’t fall apart.

Cash Beef Situation and Outlook:

Yesterdays kill was estimated at 122,000 head, which would be 3,000 head below last week and 10,000 head above the same day a year ago. Last Saturday’s kill was revised up to 37,000 head, which will give us a new weekly total of 511,000 head for last week, with the industry looking for a 620,000 head production week for this week. The boxed beef market was higher yesterday with the choice cutout closing $1.78 higher to settle at $144.97 and the select cutout closing $.14 higher to settle at $135.64. Sales volume was light with 258 loads of beef sold (86.11 loads of choice fab cuts, 90.44 loads of select fab cuts, 16.68 loads of trim, 64.38 loads of grinds). The choice/select spread settled at $9.34 a gain of $1.64.

The New Year brought a mostly steady to higher tone to the cash beef market yesterday with most strength again biased towards the procurement of end meats. Retail and wholesale buyers were actively seeking chuck and round items along with ground beef product to fill inventory levels after the last two weeks of holiday production disruptions. After several sessions of discounting in choice and select ribeyes and peeled tenderloins, there at least seemed to be a reprieve in lower prices on these items, which also lent support to cutout values. It has also been rumored that there are some foreign interests shopping around for beef lending support as well. Boneless beef markets were a tick higher in both the 50’s and 90’s yesterday on renewed demand from the processing sector. Imported items like boneless bull and cow beef looked to be just a little lower yesterday. It seems like we could see a little strength in the beef market early this week as buyers come back to get inventory levels in comfortable shape. This should help to support cutout values into late week.

Futures Market Situation and Outlook:

February live cattle settled at $87.55 a gain of $.45, April live cattle settled at $90.40 a loss of $.35, and the June live cattle settled at $87.92 a loss of $.07. In the feeder cattle pit, January feeder cattle settled at $97.00 a gain of $1.40, March feeder cattle settled at $96.72 a gain of $1.20, and the April feeder cattle settled at $97.45 a gain of $1.30. The reported CME feeder cattle index for 1/2/09 was $94.52 a gain of $1.60. Live cattle spreads: Feb/April settled at -$2.85 a gain of $.80, April/June settled at $2.47 a loss of $.27, and the June/August settled at $.10 a loss of $.05. Feeder cattle spreads: Jan/March settled at $.27 a gain of $.20, March/April settled at -$.72 a loss of $.10, and April/May settled at -$1.55 a gain of $.15.

Yesterdays live cattle volume saw 20,435 contracts trade in the pit and 8,186 contracts trade on Globex. Live cattle open interest declined 120 contracts to come in this morning at 215,430. Yesterday’s feeder cattle volume saw 2,616 contracts trade in the pit and 803 contracts trade on Globex. Feeder cattle open interest gained 194 contracts to come in this morning at 20,816.

The latest commitment of traders report showed the small funds net short 14,948 contracts of live cattle futures a decline of 138 shorts. The commercials were net short 61,345 contracts of live cattle an increase of 1,715 shorts. The index funds were net long 98,457 contracts of live cattle futures an increase of 450 longs. The small speculators were net short 22,164 contracts of live cattle a decline of 1,114 shorts. In the feeder cattle, small funds were net short 2,855 contracts of feeder cattle a decrease of 530 shorts. The commercial traders were net long 892 contracts of feeder cattle a decrease of 621 longs. The index funds were net long 6,791 contracts of feeder cattle an increase of 125 longs. The small speculator was net short 4,828 contracts of feeder cattle an increase of 34 shorts.

Live cattle settled mixed yesterday with the feeder cattle market closing with solid gains as further short covering and cash strength unfolds in the market. Technically, Feb and April live cattle futures have had a tough time getting through overhead resistance at $88 and $91 respectively. This morning could be a different story though as overnight Globex futures are aggressively challenging those resistance levels. Feeder cattle and June forward live cattle futures have taken out their corresponding resistance areas already last week and it looks as though front month Feb and April could do it today. Feeder cattle especially look like they could attain upside price targets of $101-$103, as not only do we have strong cash strength behind the feeder cattle market, but we have a very positive technical picture and still a big net short spec position in the market. I think some of the same can be said for live cattle futures, as I believe we can see some moderate cash strength in the next couple of weeks, but more importantly we have a big spec short position in the market that I think will eventually come out and we are going to have hedgers that want to sell the market another couple of dollars higher from where we are at now. Here again though, I don’t know if the market will go straight up from here, as we will have the “Goldman Roll” starting on Thursday along with some index fund rebalancing, which could give us a quick break, however in the medium term I think higher futures prices are in the cards and would want to be a buyer of breaks and hold off on hedges for the time being. Look for a $.20-$.40 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.

2009-01-05T06:45:00.001-08:00

January 5, 2009

Good Morning from the Chicago Board of Trade,

Cash Cattle Situation and Outlook:

We left last week with a cash fed cattle market that trades mostly $1 higher on a live weight basis and $2-$3 higher on a dressed basis. Cattle finally began trading late Friday in the Texas panhandle at $87 live and in Kansas at $86 live and $1.36-$1.37 dressed. Cattle in Colorado brought mostly $86 on Friday and there was further trade that took place in Nebraska and Iowa at $85-$86 live and $1.37-$1.38 dressed. Movement looked moderate with the USDA reporting 80,000 head of cattle sold on Friday in their afternoon report. I will report on totals in the morning once everything is counted and reported to the government. Despite talk of beef not moving and having enough cattle inventory around, packers paid higher money for fed cattle last week on strength in the futures board and the need for cattle to fund the first full kill week of 2009. I think beef movement isn’t all that bad, at least on the end meats and ground beef. Certainly there is a problem selling ribs and certain loin items, however the rest of the complex has some demand not only from domestic retail and wholesale channels, but also from foreign buyers. I also believe we will see some better beef business for the first couple of weeks of this month and I believe this will keep the packing community needing to kill some cattle to fill those orders. There will be more cattle coming to kill starting right now due to our increase in late summer placements of yearling cattle, which will keep the market from running away to the upside, but overall we should find some support in fed cattle prices in the mid $80’s. This week will likely find another increase in showlist numbers as January contract and formula cattle are available to the market. Early week beef demand will be key to see how fed prices trade, so for right now I will call for a steady market, with possibilities of another $.50-$1 higher. Futures will play an important role as well as we could very likely see some first of the year fund buying come back to the market. Last week’s feeder cattle and slaughter cow markets were mostly $2-$4 higher on a limited test as many sales were shut down for the holidays. Now that we will get back on normal schedules we can expect to see more cattle hit the market, however I think there will be good demand for feeders to get placed into April/May, which will keep the market supported. It’s dry on southern plains wheat pastures, which is going to start to force some lightweight cattle to move early in that part of the country and this could be a price limiting factor to cattle weighing less than 700 lbs.

Cash Beef Situation and Outlook:

Last week cattle slaughter was estimated at 507,000 head, which would be 57,000 head above the week before and 25,000 head smaller then the same week a year ago. The total included a Friday kill of 126,000 head and a Saturday kill of 33,000 head. The weekly slaughter produced an estimated 396-mil lbs of beef. From Wednesday to Wednesday of last week, choice boxed beef lost $1.27 to settle at $143.19 and select boxed beef gained $.93 to settle at $135.53 on light holiday movement of 785 loads of fabricated cuts. Friday saw mostly steady prices with the choice cutout closing steady at $143.19 and the select cutout closing $.03 lower to settle at $135.50. Sales volume on Friday was very light with 144 loads of beef sold (47.06 loads of choice fab cuts, 39.84 loads of select fab cuts, 25.63 loads of trim, 31.73 loads of grinds). The choice/select spread settled at $7.69 a gain of $.03, however a loss of $2.17 for the week.

The beef market was mostly steady to lower last week with choice cutout values getting hit the most from weakness in choice ribeyes and peeled tenderloins. The rest of the complex found some support from retail for chuck, round, and ground beef items. This should continue into the first couple of weeks of January as buyers come back to restock inventories. Moving higher priced middle meats will continue to be a price limiting factor as demand for these items won’t pick back up until early spring. I would also expect to see some export business come back to the market, which will be price supportive as well. Look for a sideways to slightly higher beef market for the first part of the week.

Futures Market Situation and Outlook:

For the week, February live cattle gained $1.00 to settle at $87.10, April live cattle gained $1.90 to settle at $90.75, and the June live cattle gained $3.08 to settle at $88.00. In the feeder cattle pit for the week, January feeder cattle gained $2.78 to settle at $95.60, March feeder cattle gained $3.77 to settle at $95.52, and the April feeder cattle gained $3.45 to settle at $96.15. The reported CME feeder cattle index for 1/1/09 was $92.92 a loss of $.01 for the day and a gain of $2.61 for the week. For the week live cattle spreads posted the following changes: Feb/April lost $.90 to settle at -$3.65, April/June lost $1.17 to settle at $2.75, and June/August gained $.35 to settle at $.15. For the week in feeder cattle spreads: Jan/March lost $1.00 to settle at $.07, March/April gained $.33 to settle at -$.62, and April/May lost $.30 to settle at -$1.70.

Fridays live cattle volume saw 18,745 contracts trade in the pit and 13,140 contracts trade on Globex. Live cattle open interest gained 2,291 to come in this morning at 215,560. Friday’s feeder cattle volume saw 2,201 contracts trade in the pit and 820 contracts trade on Globex. Feeder cattle open interest gained 252 contracts to come in this morning at 20,648. For the week live cattle open interest gained 5,122 contracts and feeder cattle open interest gained 357 contracts.

Live and feeder cattle futures settled with sharp gains on Friday on first of the year fund buying and short covering linked to higher cash cattle transactions. Gains were trimmed going into the close on local and spec profit taking. Futures continue to build gains off of support levels under the market set back a couple of weeks ago and I would expect this to continue into the first couple of weeks of January. There still remains a fairly sizeable net short spec position in the market and I would expect to see new fund buying come into the market, which will eventually force those shorts to cover. I also think there will be some support from the cash markets, which will keep us targeting the mid-$90’s in the fat cattle and upper-$90’s in the feeder cattle in the coming weeks. On any early week softness in the market, Feb live cattle will find support at $85-$86 and April live cattle will find support at $88-$89. Front month feeder cattle will have support early this week at $92. Feeders took out some important resistance at $94.50 basis March on Friday, which leads me to believe that higher prices are in the cards. 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.

2009-01-02T06:37:00.000-08:00

January 2, 2009

Good Morning from the Chicago Board of Trade,

Cash Cattle Situation and Outlook:

The cash cattle markets were largely untested on Wednesday, however there were a few thousand head of cattle that did trade in eastern Nebraska and western Iowa for $1.35 dressed, steady with last week. Packers continue to bid $83 on cattle and I think they are going to have to move bids closer to last week in order to get any cattle bought. I am still going to call for a steady to $1 higher trade for this week at $86-$87 in the south and $1.35-$1.38 dressed in the north. Beef movement isn’t all that bad and I think they will have beef orders to fill into the first couple of weeks of this month. Overnight futures are trading sharply higher this morning, which would also indicate a higher fed trade for this week. Going home for the weekend cattle selling in the salebarns (i.e. fats, feeders, and cows) are all brining $1-$3 higher money and we can look for more of the same early next week.

Cash Beef Situation and Outlook:

Wednesday’s cattle kill was 95,000 head, which would be 53,000 head above last week and 31,000 head below the same day a year ago. The week-to-date kill now stands at 348,000 head, which would be 58,000 head above the same period a week ago with the industry looking for a 500,000 head production week. The boxed beef market was mixed on Wednesday with the choice cutout closing $.23 lower to settle at 143.19 and the select cutout closing $.13 higher to settle at $135.53. Sales volume was good with 330 loads of beef sold (125.80 loads of choice fab cuts, 97.63 loads of select fab cuts, 30.73 loads of trim, 75.50 loads of grinds). The choice/select spread settled at $7.66 a loss of $.36.

The beef market continues to carry a mixed tone with packers needing to offer sharp discounts on rib cuts and peeled tenderloins; however there remains decent demand and higher pricing throughout the end meats and ground beef markets. Wednesday saw sharply lower pricing in ribeyes and PSMO’s, which is likely to show up in the USDA cutout early next week with lower settlements. Aside from that there is good movement of cheaper chuck and round cuts and I would expect that to continue into the first couple weeks of January, which will help to support cutout values on breaks. Look for a lower tone to the beef market into early next week.

Futures Market Situation and Outlook:

February live cattle settled at $86.05 a gain of $.15, April live cattle settled at $89.10 a loss of $.30, and the June live cattle settled at $86.20 a gain of $.22. In the feeder cattle pit, January feeder cattle settled at $94.05 a gain of $.07, March feeder cattle settled at $93.67 a loss of $.15, and the April feeder cattle settled at $94.45 a loss of $.30. The reported CME feeder cattle index for 12/30/08 was $91.96 a gain of $1.51. Live cattle spreads: Feb/April settled at -$3.05 a gain of $.45, April/June settled at $2.90 a loss of $.52, and June/August settled at $.47 a gain of $.47. Feeder cattle spreads: Jan/March settled at $.37 a gain of $.22, March/April settled at -$.77 a gain of $.15, and April/May settled at -$1.15 a loss of $.10.

Wednesday’s live cattle volume saw 13,584 contracts trade in the pit and 7,862 contracts trade on Globex. Live cattle open interest gained 1,952 contracts to come in this morning at 213,285. Wednesdays’ feeder cattle volume saw 1,543 contracts trade in the pit and 483 contracts trade on Globex. Feeder cattle open interest gained 27 contracts to come in this morning at 20,398.

Live and feeder cattle futures were lower most of the session on Wednesday, however a round of late fund buying brought most live and feeder cattle contracts into positive by the close. December went off the board without much fanfare at $84.47. This morning Globex futures, which started trading at 5:00 am, are sharply higher and I think we should trade that way most of the day. I think we are going to see some new fund buying come into all commodity markets now that we are into a new year and with a fairly sizeable spec short position in cattle futures I think we will see some of those shorts forced out of the market. Resistance on Feb cattle will be found at $88.50 and in the April live cattle at $91.00. Resistance on March feeder cattle will be found at $94.50-$94.70 and a close above that level would likely move that market into the upper $90’s. I don’t know if we can get live cattle to close above resistance levels today, but it likely could happen early next week, which would open the door to the $93-$96 level in Feb and April. Look for a $.25-$.50 higher open to live and feeder cattle futures this morning. Trade Well!!!

Any one wanting a more detailed report on the cattle and beef markets including fundamental, chart and technical analysis, plus spec/hedge recommendations for packers, processors, producers, and meat buyers feel free to contact me by phone or e-mail to set up a free trial.

There is risk in trading futures and options.

Have a Good Day,

Troy Vetterkind
Vetterkind Cattle Brokerage, LLC
Chicago Board of Trade
141 West Jackson Blvd.
Suite 1220A
Chicago, IL 60604
1-888-299-1477 Toll Free
1-312-896-2068 Direct
1-708-224-5985 Mobile
tvetterkind@linngroup.com

Reproduction or rebroadcast of any portion of this information is strictly prohibited without the written permission of the Linn Group, Inc. the information reflected herein is derived from sources believed to be reliable; however, this information is not guaranteed as to its accuracy or completeness. Opinions expressed are subject to change without notice. This material and any view expressed herein are provided for informational purposes only and should not be construed in any way as an inducement to buy or sell commodity futures or options contracts. The Linn Group and its officers, directors, employees and affiliates may take positions for their own accounts in contracts referred to herein. Trading futures involves risk of loss. Past performance is not indicative of future results.

2008-12-31T06:28:00.001-08:00

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.

2008-12-30T06:20:00.001-08:00

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.

2008-12-29T06:41:00.001-08:00

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.

2008-12-23T06:30:00.000-08:00

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.

2008-12-22T06:39:00.001-08:00

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.

2008-12-19T06:35:00.000-08:00

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.

2008-12-18T06:36:00.001-08:00

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.

2008-12-17T06:35:00.000-08:00

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.

2008-12-16T06:22:00.000-08:00

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.

2008-12-15T06:28:00.001-08:00

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.

2008-12-12T06:52:00.000-08:00

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.

2008-12-11T06:35:00.000-08:00

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.

2008-12-09T06:42:00.000-08:00

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.

2008-12-05T06:32:00.000-08:00

December 5, 2008

Good Morning from the Chicago Board of Trade,

Cash Cattle Situation and Outlook:

We saw an active fed cattle trade develop in all trading areas at steady money with Wednesday’s declines. Kansas feedlots sold around 18,000 head of fed cattle for $86-$87 live and $1.37 ½ dressed, Texas feedlot sold around 26,000 head of fed cattle for mostly $87 live with some $86 being paid late. In the north, Nebraska feedlots sold approximately 13,000 head of fed cattle for $85-$85.50 live and $1.36-$1.38 dressed, with most of the market taking place at $1.36 late in the day. Colorado feedlots sold a couple thousand head of fed cattle for $1.38 dressed, and Iowa feedlots sold close to 10,000 head of fed cattle for $1.35-$1.37. That should clean things up for the week with any more cleanup trade likely taking place towards the lower end of yesterday’s price range. Going home for the weekend feeder cattle markets were starting to soften up due to the drop in cash fed cattle and cattle futures. We should probably expect to see further losses in the cash market early next week.

Cash Beef Situation and Outlook:

Yesterday’s cattle slaughter was estimated at 124,000 head, which would be 124,000 head above last week and 6,000 head below the same day a year ago. The week-to-date kill now stands at 483,000 head, which would be 99,000 head above the same period a week ago with the industry looking for a 625,000 head production week. The boxed beef market was lower yesterday with the choice cutout closing $2.97 lower to settle at $145.78 and the select cutout closing $1.26 lower to settle at $137.14. Sales volume was moderate with 352 loads of beef sold (128.79 loads of choice fab cuts, 109.63 loads of select fab cuts, 60.27 loads of trim, 52.95 loads of grinds). The choice/select spread settled at $8.64 a loss of $1.71.

The beef market was lower yesterday, however sales volumes were starting to pick up on the lower market. Chuck, round, and loin items led the market lower yesterday as retail demand for said items was still lackluster. With that said though, there was some interest beginning to surface in certain chuck items from the export market, which could help to stabilize some of the beef declines by next week. Most boneless beef markets were under pressure yesterday and I would look for further weakness in the beef market into the middle of next week.

Futures Market Situation and Outlook:

December live cattle settled at $83.07 a loss of $.75, February live cattle settled at $83.07 a loss of $1.00, and the April live cattle settled at $85.12 a loss of $.92. In the feeder cattle pit, January feeder cattle settled at $88.10 a loss of $.25, March feeder cattle settled at $86.90 a loss of $1.15, and the April feeder cattle settled at $88.35 a loss of $.90. The reported CME feeder cattle index for 12/3/08 was $91.87 a loss of $.42.

Yesterday’s live cattle volume saw 22,632 contracts trade in the pit and 11,925 contracts trade on Globex. Live cattle open interest gained 2,729 contracts to come in this morning at 217,377. Yesterday’s feeder cattle volume saw 4,615 contracts trade in the pit and 2,203 contracts trade on Globex. Feeder cattle open interest declined 181 contracts to come in this morning at 20,361.

Live and feeder cattle futures settled lower once again on continued spec and commercial selling. We made a new round of contract lows in most live and feeder cattle futures yesterday, which doesn’t bode well technically. The market did manage to rebound slightly off its lows going into the close, but with stock futures pointing to another lower open to the Dow Jones this morning, I would say that cattle futures will be on the defensive as well. Closing December live cattle futures below $83, February live cattle below $83.50, and January feeder cattle below $88 by the end of the day would keep the door open to lower prices going into next week. I don’t see much strength in the cash market for next week either, so this will add to sell side pressure. Look for a $.25-$.50 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.

2008-12-04T06:45:00.001-08:00

December 4, 2008

Good Morning from the Chicago Board of Trade,

Cash Cattle Situation and Outlook:

We started to see a few cattle begin to trade in the north and south yesterday at $3-$5 lower money, however volume was very light and it wasn’t enough to establish a market but the trend is definitely lower when compared to last week. A few thousand head of fed cattle exchanged hands in Texas and Kansas at $87 live and a few thousand head of cattle traded in Nebraska and Iowa at $1.37-$1.38 dressed. Falling futures prices, which is providing an opportune basis level on hedged cattle and faltering boxed beef prices along with packers getting serious about cutting kills are all combining to pressure the cash fed cattle market this week. As mentioned earlier in the week an increase in December contract and formula cattle is also giving packer buyer’s leverage in this week’s price negotiation. I would look for a more active trade to develop by later today in all areas of cattle feeding country at the above mentioned prices.

In auction market news, fed cattle selling through the Sioux Falls, SD market yesterday were being called steady to $1 lower as well with the beef fats bringing $80-$84 and the Holsteins bringing $69-$72. Slaughter cows were steady to as much as $4 higher on the lean cows with prices ranging between $36-$43 on the cutters and boners and $43-$48 on the fat cows. Surprisingly feeder cattle markets are holding up fairly well this week with many sales such as Kearney, NE and Torrington, WY calling their markets $2-$4 higher. Demand is reportedly very good for 5 weight steer calves that can be grazed or backgrounded through the winter. 500 lbs steers in Torrington yesterday were bringing $96-$115 and the 600 lbs steers were bringing $88-$96. Kearney had a decent run of yearling cattle with the 7 weight steers bringing $90-$99 and the 8 weight steers bringing $90-$95.

Cash Beef Situation and Outlook:

Yesterdays kill was estimated at 113,000 head, which would be 14,000 head below last week and 17,000 head below the same day a year ago. The week-to-date kill now stands at 359,000 head, which would be 25,000 head below the same period a week ago with the industry looking for a 625,000 head production week. The boxed beef market was lower yesterday with the choice cutout closing down $2.66 to settle at $148.75 and the select cutout closing down $2.26 to settle at $138.40. Sales volume was light moderate with 338 loads of beef sold (102.38 loads of choice fab cuts, 121.29 loads of select fab cuts, 53.93 loads of trim, 60.78 loads of grinds). The choice/select spread settled at $10.35 a loss of $.40.

The beef was under pressure yesterday on a lack of domestic and international demand. Sharp discounts were being offered by packers in choice ribeyes, short ribs, boneless strips, and peeled tenders. Many other cuts throughout the beef carcass were being discounted yesterday as well, however not to the degree of above-mentioned items. Lower priced items such as coarse ground beef markets were being discounted as well. Boneless beef markets were mixed once again with moderate strength in the fed cattle 50’s and mostly steady on the boneless cow 90’s. Consumer pulls at most retail and wholesale chains have been lackluster this week, which has most of these buyers on the sidelines waiting for a better demand scenario to develop before committing to further purchases. This will likely keep the beef market under pressure until sometime next week when production cutbacks from this week kick in to support the market. Export sales for the week of November 21-27, 2008 are as follows:

Beef: Net sales of 3,800 MT resulted as increases for Mexico (3,100 MT) and Canada (700 MT), were partially offset by decreases for Japan (700 MT). Net Sales of 700 MT for delivery in 2009 resulted as increases for Vietnam (500 MT), Mexico (200 MT), and Canada (100 MT), were partially offset by decreases for Japan (100 MT). Exports of 6,100 MT were mainly to Mexico (2,800 MT), Canada (1,100 MT), Japan (800 MT), South Korea (600 MT), and Vietnam (400 MT).

Futures Market Situation and Outlook:

December live cattle settled at $83.82 a loss of $.52, February live cattle settled at $84.07 a loss of $.87, and the April live cattle settled at $86.05 a loss of $.47. In the feeder cattle pit, January feeder cattle settled at $88.35 a loss of $.65, March feeder cattle settled at $88.05 a loss of $1.05, and the April feeder cattle settled at $89.25 a loss of $.72. The reported CME feeder cattle index for 12/1/08 was $92.29 a loss of $2.06.

Yesterdays live cattle volume saw 23,642 trade in the pit and 9,261 contracts trade on Globex. Live cattle open interest gained 1,463 contracts to come in this morning at 214,837. Yesterday’s feeder cattle volume saw 2,037 contracts trade in the pit and 1,595 contracts trade on Globex. Feeder cattle open interest gained 252 contracts to come in this morning at 20,544.

It was the same old story in the cattle futures market yesterday as an early session rally faded midsession on weakness linked to the sell off in the equity markets. There were some fundamental factors at play yesterday as well, with lower cash fed cattle markets and lower boxed beef markets adding to the sell pressure. Option trading was rather quiet yesterday with the biggest feature of the day being the sales of February live cattle $84, $82, and $79 puts. Option volatility continues to run high with Feb atm vol @25% and April atm money vol @23.5%. Technically, the futures market continues to breakdown on any rally attempts on spec selling. Live cattle futures will be down testing contract lows at $83 in the December and $83.80 in the Feb. A close below these levels by Friday would open the door to the upper $70’s to lower $80’s. January feeder cattle contract lows are $87.80 and the March feeder cattle actually closed on a new contract low yesterday at $88.05. Here too, unless we can come back and close back above these levels by tomorrow, the market would appear to be heading down to the lower to mid $80’s in my opinion. Once we get the bulk of this weeks fed cattle trade behind us we could see a round of hedge lifting and short covering, which could help to support the market. Overnight equity futures are lower again so we will call 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.

2008-12-03T06:22:00.001-08:00

December 3, 2008

Good Morning from the Chicago Board of Trade,

Cash Cattle Situation and Outlook:

Cash fed cattle markets were at a standstill yesterday as packer bids were rather non-existent and feedlots offering cattle at $92/$1.45. The USDA did report a few pens of cattle sold in Texas for $88 live, however volume was too light to establish a trend. I would assume that a late week trade will develop at what now appears is going to be lower money. Larger contract and formula supplies of fed cattle for the first of December and faltering beef and futures market are likely to be the main culprits for the lower trade by the end of the week. There is also some talk of packers cutting back on production hours towards the end of this week, which will also keep some pressure on this week’s cash trade. Look for an $88 live and $1.40 dressed trade to develop by Friday. In other cash news, fed cattle selling through the Midwest auction markets were bringing mostly steady money at $83-$86 with the Holsteins steers bringing $75-$77. Slaughter cows were a little firmer in spots with the bulk of the cutter and boner cows bringing $34-$43, with some white cows up to $45. Feeder cattle sales are mixed, however a firmer tone is being noted at many sales. The majority of the 500 lbs-600 lbs steer calves that sold in the plains states salebarns yesterday were bringing $90-$105, with the true yearling cattle, which are hard to find, bringing from the mid-$80’s to lower $90’s.

Cash Beef Situation and Outlook:

Yesterday’s cattle slaughter was estimated at 126,000 head, which would be 2,000 head below last week and 5,000 head below the same day a year ago. The industry will be looking for a 625,000 head production week. The boxed beef market was lower yesterday with the choice cutout closing $.38 lower to settle at $151.41 and the select cutout closing $.37 lower to settle at $140.66. Sales volume was light yesterday with 204 loads of beef sold (70.71 loads of choice fab cuts, 68.25 loads of select fab cuts, 14.88 loads of trim, 50.04 loads of grinds). The choice/select spread settled at $10.75 a loss of $.01.

The beef market was lower yesterday as both domestic demand and export demand has failed to meet expectations this week. Sharp discounts were beginning to surface in the chuck, round, and loin primals yesterday, with short ribs, inside rounds, top butts, and PSMO’s receiving the biggest brunt of the lower money. Poor weekend beef clearance has most buyers sitting on the sidelines or buying on an as-need basis. Export business is reportedly non-existent this week as is evident by sharply lower chuck roll and short rib markets along with the drop credit being at its lowest levels in over 5 years. Boneless beef markets were mixed yesterday with the fed cattle 50’s garnering some support from talk of production cutbacks later this week and boneless cow 90’s under pressure from an increase of cow numbers in the west. We probably now need to look for the beef market to stay under pressure for the balance of the week.

Futures Market Situation and Outlook:

December live cattle settled at $84.35 a loss of $1.10, February live cattle settled at $84.95 a loss of $.77, and the April live cattle settled at $86.52 a loss of $1.02. In the feeder cattle pit, January feeder cattle settled at $89.00 a loss of $.62, March feeder cattle settled at $89.10 a loss of $.75, and the April feeder cattle settled at $89.97 a loss of $.50. The reported CME feeder cattle index for 11/29/08 was $94.35 a gain of $.77.

Yesterdays live cattle volume saw 20,445 contracts trade in the pit and 9,261 contracts trade on Globex. Live cattle open interest declined 119 contracts to come in this morning at 213,323. Yesterday’s feeder cattle volume saw 1,583 contracts trade in the pit and 1,043 contracts trade on Globex. Feeder cattle open interest gained 23 contracts to come in this morning at 20,290.

Live and feeder cattle futures settled lower yesterday despite decent gains in the stock markets on concerns over forward and near term beef demand and pricing. New contract lows seem close at hand with December live cattle likely to test support at $83 and February live cattle at $83.80. January feeder cattle will likely be testing its contract lows of $87.80 either by today or tomorrow as well. A Close below any of the above mentioned support areas would open the door for lower futures prices due to technical selling. We do have a lower cash cattle and beef market priced in for this week, so to see some short covering once we get this weeks cash trade behind us might help to mitigate some of the losses by the end of the week. Dow and S&P futures are lower this morning, which will likely prompt a $.25-$.50 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.

2008-12-02T06:11:00.000-08:00

December 2, 2008

Good Morning from the Chicago Board of Trade,

Cash Cattle Situation and Outlook:

A look at last weeks feedlot sales volumes and prices shows Texas/OK/NM feedlots selling 42,535 head of fed cattle (37,055 the week before) for $90 live, Kansas feedlots sold 44,080 head of fed cattle (31,593) for $90 live, Nebraska feedlots sold 62,038 head of fed cattle (49,079) for $89 live and $1.42-$1.43 dressed, Colorado feedlots sold 4,398 head of fed cattle (7,045) for $89-$90 live and $1.43-$1.44 dressed, and Iowa/MN feedlots sold 25,020 head of fed cattle (26,394) for $88 live and $1.40 dressed. When compared to the previous week, feedlot movement didn’t look all that bad, however we find ourselves coming into this week with a sharply larger showlist offering linked mainly to a hefty increase in contract and formula cattle for the first of December. As such packers weren’t tendering many bids yesterday, especially with the board going their way. Feedlot offering prices begin the week at $92-$93 in the south and $1.45-$1.46 dressed in the north. Prospects for a steady to higher cash fed cattle market coming out of last week were dashed today with the crashing futures board and larger showlist offering. Unless we can see a dramatic turnaround in board values, I would say steady to $1 lower would be the best call on this week’s cash market for right now.

In auction market news, fed cattle selling in the upper Midwest salebarns were actually bringing higher money on the beef fats at $82-$87 and $71-$75 on the Holstein steers. Most of these gains can likely be attributed to catching up with the gains witnessed in the cash feedlot trade last week. Slaughter cows were under a little pressure yesterday with the cutter and boner cows bringing $32-$42 and the fat cows bringing $43-$48. Feeder cattle markets were trading at lower money yesterday with Oklahoma City, OK calling their market steady to $2 lower on an estimated run of 7,400 head. Yesterday in OKC, 400 lbs steers were bringing $100-$117, 500 lbs steers were bringing $90-$110 (depending on quality and weaned or unweaned), 600 lbs steers were bringing $85-$102, 700 lbs steers were bringing $85-$95, and the 800 lbs steers were bringing $85-$91.

Cash Beef Situation and Outlook:

Yesterdays cattle kill was estimated at 120,000 head, which would be 9,000 head below last week and 10,000 head below the same day a year ago. The industry will be looking for a 625,000 head production week. The boxed beef market was higher yesterday with the choice cutout closing $.18 higher to settle at $151.79 and the select cutout closing $.27 higher to settle at $141.03. Sales volume was light with 143 loads of beef sold (55.18 loads of choice fab cuts, 49.42 loads of select fab cuts, 19.74 loads of trim, 18.46 loads of grinds). The choice/select spread settled at $10.76 a loss of $.09.

The beef market was slow to develop yesterday as most participants came back from the long holiday weekend going over inventory positions and determining their next move in the marketplace. Reportedly packers were offering certain middle meat items at lower money in particular items from the loin in an attempt to try and spur retail interest, as movement of beef over the weekend was rather lackluster. Boneless beef markets were slightly lower yesterday as reportedly product is available at the packinghouse level. The beef market looks like it will be under a little pressure early this week, and possibly firming up late in the week. Australia released their monthly beef export numbers yesterday with an 81% decrease in exports to Russia during the month of November. Japanese exports were off 12% on the month and down 26% from the same period last year. Exports to the U.S. were up 5% on the month and up 32% compared to the same month a year ago. As mentioned in previous writing’s, the cheaper U.S. dollar and collapsing world economies is going to attract Australian beef to the U.S.

Futures Market Situation and Outlook:

December live cattle settled at $85.45 a loss of $1.92, February live cattle settled at $85.72 a loss of $1.92, and the April live cattle settled at $87.55 a loss of $2.17. In the feeder cattle pit, January feeder cattle settled at $89.62 a loss of $2.07, March feeder cattle settled at $89.85 a loss of $2.37, and the April feeder cattle settled at $90.47 a loss of $2.27. The reported CME feeder cattle index for 11/28/08 was $93.58 a gain of $.21.

Yesterdays live cattle volume saw 18,171 contracts trade in the pit and 8,769 contracts trade on Globex. Live cattle open interest declined 603 contracts to come in this morning at 213,363. Yesterday’s feeder cattle volume saw 1,605 contracts trade in the pit and 758 contracts trade on Globex. Feeder cattle open interest gained 364 contracts to come in this morning at 20,269.

The latest commitment of traders report showed speculative fund traders net short 12,331 contracts of live cattle futures a gain of 1,527 shorts from last week, commercial traders were short 65,174 a decline of 1,643 shorts from last week, index fund traders were net long 100,942 a decline of 1,632 longs from the previous week, and the small speculative traders were net short 23,436 a decline of 1,518 shorts from the previous week. In the feeder cattle, spec funds were net short 3,960 an increase of 1,163 shorts from the previous week, commercials were net long 2,093 a gain of 988, index funds were net long 6,608 a gain of 336, and the small spec was net short 4,741 a gain of 160.

Live and feeder cattle futures settled sharply lower yesterday in sympathy with a 7% loss in the equity market. We managed to wipe out all of last weeks gains in one fell swoop yesterday. Live and feeder cattle futures will need to see a dramatic turnaround either today or tomorrow in order to stave off another test of recent contract lows, and likely round of new contract lows. Support for the rest of this week in Dec live cattle will be found at $83 and in the February live cattle at $83.80. We will need to see both Dec and Feb live get back above $87 and $88 respectively to negate yesterday’s bearishness. In the feeder cattle, January will have some support at $87.80 and will need to get back above $92 in order to keep any rally attempts alive. Taking out any of the above mentioned support areas open the door to the upper $70’s basis the fat cattle and lower $80’s basis the feeders. Stock futures are indicating a higher open to the equity markets this morning, which should help promote a $.10-$.20 higher open to live and feeder cattle futures. 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.

2008-11-28T06:30:00.001-08:00

November 28, 2008

Good Morning from the Chicago Board of Trade,

Cash Cattle Situation and Outlook:

The cash fed cattle trade became active after the close of futures trading on Wednesday with prices running generally $2-$3 higher at $90 live in the south and $1.43 dressed in the north. Trade volumes look like there was close to 40,000 head of cattle sold in all trading areas according to the USDA afternoon slaughter cattle report, however I will report on actual numbers on Monday once everything is counted and reported to the USDA today. Feeder cattle and slaughter cow markets were also starting to firm up Tuesday and Wednesday after last weeks huge declines. I think we can go into next week looking for a firmer tone to all classes of cattle. I will call for a steady to $1 higher market for fats and feeders, and mostly steady for slaughter cows. We probably won’t rally straight up, but I think we could have put a low in the fed cattle market last week for a little while.

Cash Beef Situation and Outlook:

Wednesday’s cattle slaughter was estimated at 127,000 head, which was 2,000 head above last week and 2,000 head below the same day a year ago. The week-to-date kill stands at 384,000 head compared to 363,000 head for the same period a week ago. The boxed beef market was lower Wednesday with the choice cutout closing $1.55 lower to settle at $152.39 and the select cutout closing $1.98 lower to settle at $142.03. Sales volume was good with 326 loads of beef sold (102.68 loads of choice fab cuts, 108.91 loads of select fab cuts, 27.20 loads of trim, 87.64 loads of grinds). The choice/select spread settled at $10.35 a gain of $.43.

The beef market was lower on Wednesday which should have been expected given the proximity of the Thanksgiving holiday. I wouldn’t expect to see much out of the boxed beef market today either as many will be out of the office for an extended weekend. Most chuck and round items were trading at lower money on Wednesday, however there were a few instances of higher rib and loin cuts. Boneless beef items were under pressure yesterday with the biggest declines being found in the boneless cow 90’s. Next week I would look for a lower trade early values firming up late as retail and wholesale interests cover their first of the month needs and finish buying middle meats for end of the year holiday celebrations.

Futures Market Situation and Outlook:

On Wednesday, December live cattle settled at $87.42 a gain of $1.60, February live cattle settled at $88.15 a gain of $.82, and the April live cattle settled at $89.70 a gain of $.55. In the feeder cattle pit, January feeder cattle settled at $92.20 a gain of $.80, March feeder cattle settled at $92.92 a gain of $.67, and the April feeder cattle settled at $93.35 a gain of $.95. The reported CME feeder cattle index for 11/25/08 was $92.70 a gain of $.84.

Wednesday’s live cattle volume saw 17,407 contracts trade in the pit and 7,111 contracts trade on Globex. Live cattle open interest declined 915 contracts to come in this morning at 212,918. Wednesday’s feeder cattle volume saw 1,385 contracts trade in the pit and 504 contracts trade on Globex. Feeder cattle open interest gained 83 contracts to come in this morning at 19,632.

Live and feeder cattle futures had a nice rally on Wednesday as a higher cash trade and short covering linked to optimism towards higher cash markets until mid December lifted values. The futures market acts and feels a whole lot better than it did coming out of last week and weekly and monthly charts could be indicating that we have put a near term bottom in the futures market as well. Much will depend on how the stock market acts, but here too, that market feels like it could rally into the end of the year as I think we could already have the end of the world priced into that market for the time being. I want to be a buyer of live and feeder cattle on breaks for the immediate near term, looking for higher cash fed cattle, cash feeder cattle, cash beef, and futures market into mid December. Look for a mixed open to live and feeder cattle futures today (i.e. $.10 higher to $.10 lower), with some support being found underneath the market on any big break. Keep in mind all livestock, grain, financial, and stock markets will close at noon today. Have a Good Weekend and Trade Well!!!

Any one wanting a more detailed report on the cattle and beef markets including fundamental, chart and technical analysis, plus spec/hedge recommendations for packers, processors, producers, and meat buyers feel free to contact me by phone or e-mail to set up a free trial.

There is risk in trading futures and options.

Have a Good Day,

Troy Vetterkind
Vetterkind Cattle Brokerage, LLC
Chicago Board of Trade
141 West Jackson Blvd.
Suite 1220A
Chicago, IL 60604
1-888-299-1477 Toll Free
1-312-896-2068 Direct
1-708-224-5985 Mobile
tvetterkind@linngroup.com

Reproduction or rebroadcast of any portion of this information is strictly prohibited without the written permission of the Linn Group, Inc. the information reflected herein is derived from sources believed to be reliable; however, this information is not guaranteed as to its accuracy or completeness. Opinions expressed are subject to change without notice. This material and any view expressed herein are provided for informational purposes only and should not be construed in any way as an inducement to buy or sell commodity futures or options contracts. The Linn Group and its officers, directors, employees and affiliates may take positions for their own accounts in contracts referred to herein. Trading futures involves risk of loss. Past performance is not indicative of future results.

2008-11-26T06:29:00.000-08:00

November 26, 2008

Good Morning from the Chicago Board of Trade,

Cash Cattle Situation and Outlook:

The cash fed cattle market was untested yesterday with packer bids of $87 live and $1.37 dressed going unmatched against feedlot offering prices of $90-$92 live and $1.42-$1.44 dressed. All eye’s were on the futures market again yesterday to see if someone could get advantage over someone else in terms of buying or selling cattle in the cash market this week. I can tell you that couldn’t be a more fool hardy mistake to try and price cattle, whether it be on the buy side or the sell side, by what is going on in the futures market, as the futures are in complete disconnect with what is going on in the real world right now. I think both the packer and the cattle feeder realize fat cattle got a little too cheap last week, and I think both would agree that cattle will be higher this week. Perhaps not as high as the cattle feeder would like, but I think the packer realizes he needs some cattle to kill next week, and the market will be a buck or two higher from last week. This foolishness with cattle futures trading TICK for TICK with Dow and S&P futures should not have a bearing on this weeks cash cattle trade, and those trying to determine what the value of fat cattle should be this week by wringing their hands and watching what is going on in Chicago, should turn their quote screens off, and price the cattle by where the cutout is at, or by what kind of numbers they have for sale, or by what kind of meat sales they have to cover, because what is going on in the trading pit and on the screen at the CME, at least by yesterday’s standards, is by far price discovery. With that said, I think we should all look for a moderating in price declines and slight price improvement in cash fed, feeder, and slaughter cow values throughout the course of the next couple of weeks.

Cash Beef Situation and Outlook:

Yesterdays cattle kill was estimated at 128,000 head, which would be 1,000 head above last week and 3,000 head above the same day a year ago. The week-to-date kill now stands at 257,000 head, which would be 19,000 head above the same period a week ago with the industry looking for a 620,000 head production week. The boxed beef market was lower yesterday with the choice cutout closing $.94 lower to settle at $153.94 and the select cutout closing $.98 lower to settle at $144.01. Sales volume was good with 377 loads of beef sold (120.43 loads of choice fab cuts, 130.79 loads of select fab cuts, 40.41 loads of trim, 85.54 loads of grinds). The choice/select spread settled at $9.92 a gain of $.04.

The beef market was lower yesterday, as most attention from the buy side of the equation has turned to moving poultry product ahead of the Thanksgiving Day holiday. As such we saw packers discounting end meats along with loin product in order to spur some demand. The continued lack of export demand weighed on short rib values, with inside round and strip loin values reflecting reduced domestic buyer demand. Spot coarse ground items were under pressure yesterday as well, however processors looking beyond Thanksgiving Day were bidding slightly higher for cow 90’s and fed cattle 50s’. A lack of import business directly following the up coming holiday could be a cause of this. Still believe that we will come back from the holiday and see a modest up tick in beef buying interest from the retail and wholesale sector as they cover first of Dec feature adds and finish late year holiday celebration buying. Beyond that the beef market will be plagued by a modest increase in fed cattle production and waning demand after the holiday’s for beef until mid March. Some of this negativity towards the Jan/Feb beef market could be negated if a falling U.S. dollar and subsequent up tick in export demand were to develop. We also need to keep a close eye on the U.S. dollar to determine what level of beef imports we could be dealing with in the first quarter of 2009.

Futures Market Situation and Outlook:

December live cattle settled at $85.82 a loss of $.82, February live cattle settled at $87.32 a loss of $.27, and the April live cattle settled at $89.15 a loss of $.10. In the feeder cattle pit, January feeder cattle settled at $91.40, unch, March feeder cattle settled at $92.25, unch, and the April feeder cattle settled at $92.40 a loss of $.15. The reported CME feeder cattle index for 11/24/08 was $91.86 a loss of $.85.

Yesterdays live cattle volume saw 23,029 contracts trade in the pit and 10,770 contracts trade on Globex. Live cattle open interest declined 95 contracts to come in this morning at 213,883. Yesterday’s feeder cattle volume saw 1,535 contacts trade in the pit and 685 contracts trade on Globex. Feeder cattle open interest gained 361 contracts to come in this morning at 19,552.

The cattle futures market was pretty choppy and volatile again yesterday with part of the market thinking that Monday’s rally was overdone, part of the market thinking we should rally because the cash market will be higher this week, and part of the market trading cattle via the stock market. Despite all of the foolish intra-day movement, by the end of the day it did feel like there was some support under the market and we did manage to close back near our highs of the day. Given what we know about the near term fundamentals of the market (i.e. manageable fed cattle supplies and beef demand that isn’t all that bad and bound to improve after Thanksgiving), I still think we could see higher cattle futures prices going into the first couple weeks of December. I still want to target the $89-$90 area in Dec and Feb live cattle futures and the $94 area in Jan feeder cattle as near term price objectives. If by chance the cash beef and fed cattle markets were to exceed current expectations, which could easily happen as the current state of the beef market can probably support a low to mid $90’s fed cattle market, then we could see live cattle futures move $2-$4 beyond the above mentioned resistance levels. Option trading was active in the February live cattle calls yesterday with open interest going up by 3,000 contracts in out of the money strikes, which would lead one to believe there was net new buying coming into the market. Option volatility also went up the last couple of days, with at the money Dec straddle vol at 25.5%, Feb atm straddle vol at 23%, and April atm straddle vol at 21.5%. Dow and S&P futures are trading lower this morning, which will likely have an adverse affect on cattle futures on the open. I would look for a $.10-$.30 lower open to live and feeder cattle futures this morning, with some support under the market being found at yesterday’s lows. Keep in mind we will be trading on regular hours today, of course we will be closed tomorrow, however cattle and grains will open Thursday at 5:00 pm and 6:00 pm respectively on regular overnight trading schedules. All markets (meats, grains, financials, stock index’s) will close at noon on Friday. Everyone Have a Happy Thanksgiving and Trade Well!!!

Any one wanting a more detailed report on the cattle and beef markets including fundamental, chart and technical analysis, plus spec/hedge recommendations for packers, processors, producers, and meat buyers feel free to contact me by phone or e-mail to set up a free trial.

There is risk in trading futures and options.

Have a Good Day,

Troy Vetterkind
Vetterkind Cattle Brokerage, LLC
Chicago Board of Trade
141 West Jackson Blvd.
Suite 1220A
Chicago, IL 60604
1-888-299-1477 Toll Free
1-312-896-2068 Direct
1-708-224-5985 Mobile
tvetterkind@linngroup.com

Reproduction or rebroadcast of any portion of this information is strictly prohibited without the written permission of the Linn Group, Inc. the information reflected herein is derived from sources believed to be reliable; however, this information is not guaranteed as to its accuracy or completeness. Opinions expressed are subject to change without notice. This material and any view expressed herein are provided for informational purposes only and should not be construed in any way as an inducement to buy or sell commodity futures or options contracts. The Linn Group and its officers, directors, employees and affiliates may take positions for their own accounts in contracts referred to herein. Trading futures involves risk of loss. Past performance is not indicative of future results.

2008-11-25T06:28:00.000-08:00

November 25, 2008

Good Morning from the Chicago Board of Trade,

Cash Cattle Situation and Outlook:

The cash feedlot trade was quiet yesterday as the day was spent assembling this week’s showlist. This weeks offering of fed cattle looks to be a little smaller in Nebraska and Kansas with steady numbers for sale in Texas. A look at last weeks sale volumes and prices shows Texas/OK/NM feedlots selling 37,055 head of fed cattle (48,762 previous week) for $87-$88 live. Kansas feedlots sold 27,504 head of fed cattle (23,427) for $87-$88 live and $1.39 dressed, Nebraska feedlots sold 49,079 head of fed cattle (63,173) for $88-$88.50 live and $1.39-$1.40 dressed, Colorado feedlots sold 7,045 head of fed cattle (3,361) for $87.50 live and $1.41 dressed, and Iowa/MN feedlots sold 26,394 head of fed cattle (36,318) for $86-$87 live and $1.38-$1.39 dressed. All weekly totals are negotiated cash and negotiated grid sales as reported to the USDA under MPR. As we can see weekly volumes are a little light when compared to the previous week, however there were less cattle for sale last week when compared to the previous week or year. Regardless, numbers for sale this week are certainly manageable and we shouldn’t start seeing a big build up in ready numbers of fed cattle until the last half of December. At that time we will start getting into the heavy yearling placements of cattle that came off of grass the last several months and those numbers should last until mid to late March. This increase in fed cattle marketing’s and the corresponding seasonal dip in beef demand after the holidays will likely be the catalyst for the last leg down in cash fed cattle prices until late summer 2009. This move down may or may not be exaggerated by recent weakness in Global economic conditions. For the rest of this week though, packers will be buying for a full production week next week and I am of the opinion they have forward beef sales to deliver on for the first of December, which will have them needing inventory. Last weeks cash market was overdone in my opinion so I am going to call for a steady to $1 higher fed cattle market for this week. There were no packer bids being tendered yesterday with most feedlots offering cattle at $90-$92 live and $1.43-$1.45 dressed.

A look around the auction market circuit shows fed cattle trading steady to modestly higher from last week’s steep declines. Beef fats in the Zumbrota, MN auction were bringing $82-$85 with the Holstein steers bringing $71-$73. Slaughter cows were lower with the cutter and boning utility cows bringing $35-$42 and the fatter cows bringing $43-$50. Yesterday Oklahoma City had 5,500 head of cattle on offer with early results at that sale being called $2-$4 lower, however it was said that buyer demand was picking up towards the end of the sale and prices were improving. 5 weight steers in OKC yesterday were bringing $95-$115, 6 weight steers were bringing $87-$101, 7 weight steers were bringing $86-$94, and the 8 weight steers were bringing $87-$92. I would expect to see wide price swings and large discounts on certain strings of feeder cattle depending on what the fat market does and what kind of health regimen the cattle have.

Cash Beef Situation and Outlook:

Yesterday’s cattle kill was estimated at 129,000 head, which would be 18,000 head above last week and 6,000 head above the same day a year ago. The USDA revised last Saturday’s kill up to 21,000 head, which will give us a new week-to-date total of 636,000 head. The boxed beef market was lower yesterday with the choice cutout closing $1.22 lower to settle at $154.88 and the select cutout closing $.24 lower to settle at $144.99. Sales volume was light with 181 loads of beef sold (45.26 loads of choice fab cuts, 53.96 loads of select fab cuts, 24.25 loads of trim, 57.53 loads of grinds). The choice/select spread settled at $9.89 a loss of $.98.

The beef market was lower yesterday as most in the industry turn their attention to the upcoming Thanksgiving holiday. Yesterday’s market saw most price discounts occurring within the chuck and round complex with lower values being reported on chuck rolls, knuckles, and inside/outside rounds. Short loins and tenderloin butts were also being marked lower along with select and no-roll PSMO’s. Coarse ground markets were lower yesterday, however there were a few instances of higher 90% cow beef transactions. All in all, I would expect to see a lower beef market for the balance of this week, however once we get Thanksgiving behind us, I think we could see a little appreciation in prices as buyers finish booking their end of year holiday needs and cover first of December retail adds.

Futures Market Situation and Outlook:

December live cattle settled at $86.65 a gain of $1.75, February live cattle settled at $87.60 a gain of $2.10, and the April live cattle settled at $89.25 a gain of $2.42. In the feeder cattle pit, January feeder cattle settled at $91.40 a gain of $2.00, March feeder cattle settled at $92.25 a gain of $2.10, and the April feeder cattle settled at $92.55 a gain of $2.10. The reported CME feeder cattle index for 11/21/08 was $92.71 a loss of $1.75.

Yesterdays live cattle volume saw 16,593 contracts trade in the pit and 8,371 contracts trade on Globex. Live cattle open interest declined 600 contracts to come in this morning at 214,024. Yesterday’s feeder cattle volume saw 1,940 contracts trade in the pit and 598 contracts trade on Globex. Feeder cattle open interest declined 900 contracts to come in this morning at 19,187.

Live and feeder cattle futures gapped open sharply higher yesterday and never looked back closing with triple digit gains in both pits. Higher stock and commodity markets along with a friendly cattle on feed report from Friday were catalysts for the higher trade. Overnight news shows the country of Qatar lifting a 5 year ban on U.S. beef imports and 3 of South Korea’s largest discount stores (E-mart, Homeplus, and Lottemart) will begin selling U.S. beef today after a 1 year ban due to spinal cord material being detected in a shipment of beef last year. Overnight Dow futures are up 150 points, the S & P is up 20 points, and the U.S Dollar Index is down $.86, all of which should help to support a higher open and trade in U.S. cattle futures markets. For the balance of this week, providing the Dow Jones doesn’t collapse, I think we can target the $89-$90 area for both December and February live cattle futures and the $94 area for January feeder cattle futures. Idea of a higher cash fed cattle market and the futures being extremely oversold would back up this type of trade. If the market is any good at all, we should be able to hold $84 in the Dec live, $85 in the Feb live, and $90 in the Jan feeders. Look for a $.10-$.20 higher open to live and feeder cattle futures and you could probably buy any $.25 break in the market today and risk the above mentioned support areas. Trade Well!!!

Any one wanting a more detailed report on the cattle and beef markets including fundamental, chart and technical analysis, plus spec/hedge recommendations for packers, processors, producers, and meat buyers feel free to contact me by phone or e-mail to set up a free trial.

There is risk in trading futures and options.

Have a Good Day,

Troy Vetterkind
Vetterkind Cattle Brokerage, LLC
Chicago Board of Trade
141 West Jackson Blvd.
Suite 1220A
Chicago, IL 60604
1-888-299-1477 Toll Free
1-312-896-2068 Direct
1-708-224-5985 Mobile
tvetterkind@linngroup.com

Reproduction or rebroadcast of any portion of this information is strictly prohibited without the written permission of the Linn Group, Inc. the information reflected herein is derived from sources believed to be reliable; however, this information is not guaranteed as to its accuracy or completeness. Opinions expressed are subject to change without notice. This material and any view expressed herein are provided for informational purposes only and should not be construed in any way as an inducement to buy or sell commodity futures or options contracts. The Linn Group and its officers, directors, employees and affiliates may take positions for their own accounts in contracts referred to herein. Trading futures involves risk of loss. Past performance is not indicative of future results.

2008-11-24T06:47:00.001-08:00

November 24, 2008

Good Morning from the Chicago Board of Trade,

Cash Cattle Situation and Outlook:

We left last week with a disappointing cash cattle market, however a friendly cattle on feed report. On feed November 1, 2008 was estimated at 10.972 mil head or 93.2% of a year ago (93.9% pre-report estimate), placements for October were estimated at 2.438 mil head or 89.5% of a year ago (91.1%), and marketing’s during October were estimated at 1.814 mil head or 96.7% of a year ago (95.1%). The report will be considered supply friendly going into the first of the year, however we will run into more yearling cattle placements from the last couple of months by January 1. It appears as though we continue to warehouse younger/smaller cattle outside of feedlots as placements of cattle weighing less than 700 lbs were down 18%, while placements of cattle weighing over 700 lbs were up 1%. These younger cattle are heading to backgrounding lots or wheat pasture and likely won’t show up as fat cattle until late summer. Last weeks cash cattle market was disappointing with the market trading $4-$6 lower at $86-$88 live and $1.37-$1.40 dressed. Feeder cattle markets were $4-$10 lower with slaughter cows off a couple of dollars as well. I believe this was a little too much and that we will see the market stabilize this week. Much will depend on how the futures market trades, but if the Dow holds together cattle futures should stabilize as well. Look for a steady to $1 higher fed cattle trade this week, with feeder cattle markets steady at best.

Cash Beef Situation and Outlook:

Last week cattle kill was estimated at 633,000 head, which would be 14,000 head above the previous week. For the week choice boxed beef gained $.42 and select boxed beef lost $.34 on moderate sales volume. Late in the week though the beef market began to soften up, with Friday showing a $1.69 loss in choice beef to settle at $156.10 and the select beef off $.92 to settle at $145.23. The beef market will likely be under pressure for most of this week as buyers focus their attention towards moving turkey ahead of the holiday on Thursday. Once we get past Thanksgiving we could see one last mini rally in the beef for the first week in December as buyers cover first of the month feature adds. Friday’s cold storage report showed beef stocks 3% above last month and 5% below last year.

Futures Market Situation and Outlook:

The futures market was under extreme pressure all last week on fund liquidation and spec selling linked to weakness in the equity markets and spec selling. We likely haven’t seen the lows in the cattle market yet, however with the market extremely oversold, a friendly cattle on feed report, and the possible stabilization in the cash markets for this week and next, as well as a higher stock market early this morning, I think we can see the futures market open a little higher and trade that way for most of this week. Much will obviously depend on how the equity markets trade this week, but I think barring any more crashes in the stock market we could see a $3-$4 bounce in live and feeder cattle by the first of December. You can take a shot at the long side of the market here for a minute and use last Thursdays lows in live and feeder cattle futures to step away from those longs. Look for a $.25-$.50 higher open to live and feeder cattle futures this morning. Trade Well!!!

Any one wanting a more detailed report on the cattle and beef markets including fundamental, chart and technical analysis, plus spec/hedge recommendations for packers, processors, producers, and meat buyers feel free to contact me by phone or e-mail to set up a free trial.

There is risk in trading futures and options.

Have a Good Day,

Troy Vetterkind
Vetterkind Cattle Brokerage, LLC
Chicago Board of Trade
141 West Jackson Blvd.
Suite 1220A
Chicago, IL 60604
1-888-299-1477 Toll Free
1-312-896-2068 Direct
1-708-224-5985 Mobile
tvetterkind@linngroup.com

Reproduction or rebroadcast of any portion of this information is strictly prohibited without the written permission of the Linn Group, Inc. the information reflected herein is derived from sources believed to be reliable; however, this information is not guaranteed as to its accuracy or completeness. Opinions expressed are subject to change without notice. This material and any view expressed herein are provided for informational purposes only and should not be construed in any way as an inducement to buy or sell commodity futures or options contracts. The Linn Group and its officers, directors, employees and affiliates may take positions for their own accounts in contracts referred to herein. Trading futures involves risk of loss. Past performance is not indicative of future results.

2008-11-21T06:49:00.001-08:00

November 21, 2008

Good Morning from the Chicago Board of Trade,

Cash Cattle Situation and Outlook:

We saw further fed cattle trade develop in the northern tier of feeding country yesterday at $1.38-$1.39 dressed, which would be about a dollar lower than the bulk of transactions on Wednesday. The southern trade became active yesterday at $86-$87 live and $1.37 dressed. It looks like about 20,000 head of cattle traded that way in both Kansas and Texas. The bulk of trading is likely wrapped up for the week, with any cleanup deals likely taking place at the lower end of yesterday’s trading range. Looking into next week I would say that we could likely hold the market steady and possibly put a dollar on from this weeks $4-$6 drop. Going home for the weekend all classes of cattle selling through the auction markets (i.e. fats, feeders, cows) are all trading at sharply lower money. Here too, we could possibly see some stabilization in these cash markets as we probably took to much money off this week.

Cash Beef Situation and Outlook:

Yesterdays kill was estimated at 128,000 head, which would be 3,000 head above last week and 128,000 head above the same day last year. The week-to-date kill now stands at 491,000 head, which would be 22,000 head above the same period last week with the industry looking for a 625,000 head production week. The boxed beef market was lower yesterday with the choice cutout closing $.43 lower to settle at $157.79 and the select cutout closing $1.72 lower to settle at $146.15. Sales volume was light with 252 loads of beef sold (65.87 loads of choice fab cuts, 57.28 loads of select fab cuts, 65.61 loads of trim, 63.48 loads of grinds). The choice/select spread settled at $11.65 a gain of $1.29.

The beef market began to soften up yesterday as most on the buy side of the market were content with their beef inventory positions ahead of the Thanksgiving holiday and were moving to the sidelines focusing their attention to moving turkey product. There were a few higher transactions taking place on ribeyes and PSMO’s yesterday, but for the most part the balance of the carcass primals were trading steady to lower. Boneless beef markets were also trading lower yesterday and this will likely be the case going into next week. Look for a lower beef trade until we get Thanksgiving behind us.

Futures Market Situation and Outlook:

December live cattle settled at $85.80 a gain of $1.60, February live cattle settled at $86.52 a gain of $1.37, and the April live cattle settled at $87.45 a gain of $.90. In the feeder cattle pit, January feeder cattle settled at $89.75 a loss of $.10, March feeder cattle settled at $90.35 a gain of $.25, and the April feeder cattle settled at $90.50 a gain of $.30. The reported CME feeder cattle index for 11/19/08 was $95.51 a loss of $1.27.

Yesterdays live cattle volume saw 31,027 contracts trade in the pit and 14,395 contracts trade on Globex. Live cattle open interest gained 274 contracts to come in this morning at 215,928. Yesterday’s feeder cattle volume saw 3,255 contracts trade in the pit and 1,565 contracts trade on Globex. Feeder cattle open interest declined 108 contracts to come in this morning at 19,826.

It was another very choppy and volatile trade in CME cattle futures market as the market continues to be led around by the gyrations in the equity markets. Once again I will say that perhaps we have seen enough down in the market for the very short term simply because the futures market is extremely oversold and we have sold this weeks cash cattle at sharply lower price levels. Also we will have a friendly cattle on feed report out tonight with the market looking for 93.9% on feed Nov 1, 91.1% placements during the month of October, and 95.1% marketed during the month of October. This along with ideas of possibly holding the cash market steady next week with an outside chance of putting a dollar back on the market should help to support a mini short covering rally going into next week. Keep in mind though, market participants will be looking at any rally as a selling and hedging opportunity. Look for a $.10-$.20 higher open to live and feeder cattle futures this morning. Trade Well!!!

Any one wanting a more detailed report on the cattle and beef markets including fundamental, chart and technical analysis, plus spec/hedge recommendations for packers, processors, producers, and meat buyers feel free to contact me by phone or e-mail to set up a free trial.

There is risk in trading futures and options.

Have a Good Day,

Troy Vetterkind
Vetterkind Cattle Brokerage, LLC
Chicago Board of Trade
141 West Jackson Blvd.
Suite 1220A
Chicago, IL 60604
1-888-299-1477 Toll Free
1-312-896-2068 Direct
1-708-224-5985 Mobile
tvetterkind@linngroup.com

Reproduction or rebroadcast of any portion of this information is strictly prohibited without the written permission of the Linn Group, Inc. the information reflected herein is derived from sources believed to be reliable; however, this information is not guaranteed as to its accuracy or completeness. Opinions expressed are subject to change without notice. This material and any view expressed herein are provided for informational purposes only and should not be construed in any way as an inducement to buy or sell commodity futures or options contracts. The Linn Group and its officers, directors, employees and affiliates may take positions for their own accounts in contracts referred to herein. Trading futures involves risk of loss. Past performance is not indicative of future results.

2008-11-20T06:38:00.000-08:00

November 20, 2008

Good Morning from the Chicago Board of Trade,

Cash Cattle Situation and Outlook:

We saw a moderately active fed cattle trade develop in Nebraska and Colorado yesterday with prices running $3-$5 lower at $87-$88 live and $1.39-$1.40 dressed. A light trade was being reported in Texas/OK/NM at $88-$88.50 live, which would be about $5 lower from the bulk of last weeks trade. Numbers of cattle sold looks to be about 20,000 head in the north and a couple of thousand head in the south. Kansas feedlots have not sold many cattle yet but I would expect to see some trade develop down there today at $88 money. Coming into the end of the week we also see markets for feeder cattle trading sharply lower as well as slaughter cows, and I would expect to see further weakness in all classes of cattle markets early next week.

Cash Beef Situation and Outlook:

Yesterday’s cattle kill was estimated at 125,000 head, which would be 12,000 head above last week and 6,000 head below the same day a year ago. The week-to-date kill now stands at 363,000 head, which would be 19,000 head below last weeks pace with the industry looking for a 625,000 head production week. The boxed beef market was higher yesterday as we see the choice cutout closing $.73 higher to settle at $158.22 and the select cutout closing $.35 higher to settle at $147.87. Sales volume was light with 250 loads of beef sold (78.52 loads of choice fab cuts, 76.77 loads of select fab cuts, 10.94 loads of trim, 84.22 loads of grinds). The choice/select spread settled at $10.35 a gain of $.38.

The beef market was higher yesterday on continued buying of rib and round meat by the retail sector. Chuck meat was still being marked lower as a lack of export demand keeps more product on the domestic market. Loin meat was rated as mostly steady yesterday. Boneless cow beef and fed cattle trim were trading at lower price levels as well yesterday. I would continue to look for the boxed beef market to begin to move sideways to lower going into early next week as retail and wholesale buyers turn their attention to moving turkey product ahead of the Thanksgiving holiday. Beef exports for the week of November 7-13, 2008 are as follows:

Beef: Net sales of 4,200 MT were primarily for Canada (1,400 MT), Mexico (1,400 MT), South Korea (500 MT), and Japan (400 MT). Net Sales of 500 MT for delivery in 2009 were primarily for Japan (200 MT) and Taiwan (200 MT). Exports of 8,300 MT were mainly to Mexico (3,200 MT), Canada (1,600 MT), South Korea (1,500 MT), Japan (900 MT), Vietnam (300 MT), and Taiwan (300 MT).

Futures Market Situation and Outlook:

December live cattle settled at $84.20 a loss of $2.95, February live cattle settled at $85.15 a loss of $2.45, and the April live cattle settled at $86.55 a loss of $2.52. In the feeder cattle pit, November feeder cattle settled at $95.57 a loss of $.17, January feeder cattle settled at $89.85 a loss of $1.40, and the March feeder cattle settled at $90.10 a loss of $2.00. The reported CME feeder cattle index for 11/18/08 was $96.78 a loss of $.48.

Yesterday’s live cattle volume saw 29,540 contracts trade in the pit and 13,331 contracts trade on Globex. Live cattle open interest declined 705 contracts to come in this morning at 215,731. Yesterday’s feeder cattle volume saw 3,505 contracts trade in the pit and 1,362 contracts trade on Globex. Feeder cattle open interest declined 32 contracts to come in this morning at 19,960.

Live and feeder cattle futures settled on new 4 year lows yesterday as the market continues to unwind and follows equity markets lower. There were also some rumors being floated about a possible BSE cow in Arizona that gave another excuse to sell the market. I thought we could possibly see some sort of short covering rally, but that’s not going to happen with the stock market shedding 500 points a day. Next stop for live cattle futures would likely be psychological support at $80, and below that we could see a move down to May 2006 lows of $73. Holding January feeder cattle under $90 keeps the market poised to make a move down to $80. Keep in mind November feeder cattle futures will go off the board today and January will take over as lead contract month. Dow and S & P futures look sharply lower again this morning and this will continue to drag cattle futures lower as well. Look for a $.20-$.40 lower open to live cattle and $.50-$1.00 lower in feeder cattle this morning. Trade Well!!!

Any one wanting a more detailed report on the cattle and beef markets including fundamental, chart and technical analysis, plus spec/hedge recommendations for packers, processors, producers, and meat buyers feel free to contact me by phone or e-mail to set up a free trial.

There is risk in trading futures and options.

Have a Good Day,

Troy Vetterkind
Vetterkind Cattle Brokerage, LLC
Chicago Board of Trade
141 West Jackson Blvd.
Suite 1220A
Chicago, IL 60604
1-888-299-1477 Toll Free
1-312-896-2068 Direct
1-708-224-5985 Mobile
tvetterkind@linngroup.com

Reproduction or rebroadcast of any portion of this information is strictly prohibited without the written permission of the Linn Group, Inc. the information reflected herein is derived from sources believed to be reliable; however, this information is not guaranteed as to its accuracy or completeness. Opinions expressed are subject to change without notice. This material and any view expressed herein are provided for informational purposes only and should not be construed in any way as an inducement to buy or sell commodity futures or options contracts. The Linn Group and its officers, directors, employees and affiliates may take positions for their own accounts in contracts referred to herein. Trading futures involves risk of loss. Past performance is not indicative of future results.

2008-11-19T06:39:00.001-08:00

November 19, 2008

Good Morning from the Chicago Board of Trade,

Cash Cattle Situation and Outlook:

The cash feedlot trade was largely untested with just a few cattle reportedly trading in the Nebraska dressed market for $1.40 dressed. The cattle were supposedly of Canadian origin and hedged. The rest of cattle feeding country was quiet with no real packer bids being tendered and feedlots offering this week’s mostly smaller showlist offering at $94-$95 live and $1.46 plus dressed. A late week trade is expected to develop at lower money (i.e. $93 in the south and $1.40-$1.42 in the north) due to imploding futures values and packers buying cattle for a short production week next week. As we enter the mid point of the week, most all classes of cattle selling in the auction markets are bringing lower money from fats to feeders to slaughter cows. Look for more of the same going into the weekend and early next week.

Cash Beef Situation and Outlook:

Yesterdays kill was estimated at 127,000 head, which would be 6,000 head above last week and 4,000 head below the same day a year ago. The week-to-date kill now stands at 238,000 head, which would be 7,000 head below the same period a week ago. The boxed beef market was higher with the choice cutout closing $.10 higher to settle at $157.49 and the select cutout was $.79 higher to settle at $147.52. Sales volume was light with 200 loads of beef sold (73.87 loads of choice fab cuts, 71.93 loads of select fab cuts, 16.53 loads of trim, 37.75 loads of grinds). The choice/select spread settled at $9.97 a loss of $.69.

The beef market was marginally higher yesterday, however private sources indicate a softer tone beginning to develop on many chuck, round, and loin items. Yesterday saw some price reductions for quick ship of clods, chuck rolls, inside rounds, and boneless strips. Boneless beef markets were lower yesterday with current production out weighing near term demand. I will continue to call for a lower beef market going into next week.

Futures Market Situation and Outlook:

December live cattle settled at $87.15 a loss of $1.15, February live cattle settled at $87.60 a loss of $1.42, and the April live cattle settled at $89.07 a loss of $1.30. In the feeder cattle pit, November feeder cattle settled at $95.75 a loss of $.27, January feeder cattle settled at $91.25 a loss of $2.65, and the March feeder cattle settled at $92.10 a loss of $2.20. The reported CME feeder cattle index for 11/17/08 was $97.26 a loss of $.40.

Yesterdays live cattle volume saw 29,932 contracts trade in the pit and 12,712 contracts trade on Globex. Live cattle open interest gained 799 contracts to come in this morning at 216,423. Yesterdays’ feeder cattle volume saw 2,918 contracts trade in the pit and 890 contracts trade on Globex. Feeder cattle open interest gained 208 contracts to come in this morning at 19,976.

Live and feeder cattle settled yesterday with sharp declines, following the equity markets lower. In the case of feeder cattle we scored new contract lows in every trading month except November, as that contract will expire tomorrow. February live cattle also made a new contract low yesterday. Another late rally in the stock market did manage to pull live cattle contracts $.50 off their lows on the Globex platform after the pit close yesterday, and so far this morning cattle futures are trading $.10-$.30 higher with the Dow and S & P futures trading 135 and 13 lower respectively. We could possibly see a short covering rally in live and feeder cattle futures today as they have been pummeled lower since last Friday. However, the longer term view of the market looks lower and everyone will be looking for rallies to sell. December and February live cattle will remain in a bearish posture holding under $90, as will January feeder cattle below $95. We will need to see some closes back above these strong resistance levels now to negate some of the recent bearishness. Look for a $.10-$.20 higher open to live and feeder cattle futures this morning. Trade Well!!!

Any one wanting a more detailed report on the cattle and beef markets including fundamental, chart and technical analysis, plus spec/hedge recommendations for packers, processors, producers, and meat buyers feel free to contact me by phone or e-mail to set up a free trial.

There is risk in trading futures and options.

Have a Good Day,

Troy Vetterkind
Vetterkind Cattle Brokerage, LLC
Chicago Board of Trade
141 West Jackson Blvd.
Suite 1220A
Chicago, IL 60604
1-888-299-1477 Toll Free
1-312-896-2068 Direct
1-708-224-5985 Mobile
tvetterkind@linngroup.com

Reproduction or rebroadcast of any portion of this information is strictly prohibited without the written permission of the Linn Group, Inc. the information reflected herein is derived from sources believed to be reliable; however, this information is not guaranteed as to its accuracy or completeness. Opinions expressed are subject to change without notice. This material and any view expressed herein are provided for informational purposes only and should not be construed in any way as an inducement to buy or sell commodity futures or options contracts. The Linn Group and its officers, directors, employees and affiliates may take positions for their own accounts in contracts referred to herein. Trading futures involves risk of loss. Past performance is not indicative of future results.

2008-11-17T06:39:00.000-08:00

November 17, 2008

Good Morning from the Chicago Board of Trade,

Cash Cattle Situation and Outlook:

We left last week with a fed cattle market that trades mostly steady to $1 lower at $90-$92 live and $1.43-$1.44 dressed in the north and $93 live and $1.48 dressed in the south. Most of the northern trade developed earlier in the week with what looks to be decent movement of 52,000 head of cattle sold in Nebraska and 34,000 head in Iowa. Most of the southern trade took place on Friday with preliminary reports from the USDA showing 14,000 head of cattle sold in Kansas, 23,000 head of cattle sold in Texas, and 3,000 head of cattle sold in Colorado. I will report on actual trade volumes and prices tomorrow morning once everything is counted and reported to the USDA today. Week long selling in CME cattle futures contracts linked to volatile trade in U.S. equity markets and a weakening boxed beef market late in the week prompted cattle feeders to accept steady to lower money for their fed cattle as opposed to steady/higher, which was thought earlier in the week. Many packers late in the week were applying supply side economics in order to preserve margins late in the week by reducing slaughter schedules, which had some less aggressive in the market for cattle last week. More of the same is in store for early this week, as IBP will have at least one plant dark today. While beef demand and movement has been pretty good the last couple of weeks, some of that buying could begin to dry up as retail and wholesale buyers have covered a good portion of their needs going into the end of the year, and this has packers concerned on how they will move beef product post Thanksgiving, which has them buying cattle accordingly. They will be buying for a short kill week next week as well, which one has to assume will keep them looking to procure live inventory at lower money again this week. I would look for a softer tone to the cash fed cattle market this week, with prices ranging steady to lower compared to last week at $92-$93 live and $1.46-$1.48 dressed in the south and $89-$91 live and $1.42-$1.44 dressed in the north. After starting the week on a stronger market, most feeder cattle and calf sales were beginning to soften up late in the week on the break in the futures board and lower fat cattle market. By the end of the week most classes of feeder cattle were trading steady to $1-$3 lower, however demand was said to be good from Midwest backgrounders and southern plains grazers. Numbers of cattle for sale last week in the western sale barns increased as producers finally begin to move their new crop calves to market due to weather disruptions the last couple of weeks. I would have to say that a lower trend to the feeder cattle market will prevail for most of this week as well following the direction of the futures and cash fed cattle market. Slaughter cows and bulls were mostly $1-$3 lower last week, as here too an increase in sale barn receipts and a lower trend to the domestic boneless beef market had cow killers buying live inventory defensively. Expect to see more of the same in that venue this week as well.

Cash Beef Situation and Outlook:

Last weeks cattle slaughter was estimated at 616,000 head, which would be 5,000 head below last week and 31,000 head below the same period a year ago. The weekly slaughter produced an estimated 482.8-mil lbs of beef. Year-to-date production figures show the kill running .2% above a year ago at 29.962 mil head and ytd beef production running .5% above a year ago at 23.197 bil lbs. From Thursday to Thursday of last week choice boxed beef gained $8.34 and select-boxed beef gained $5.15. Sales volume was lighter on the increased market with 1,113 loads of choice/select-fabricated cuts of beef sold throughout the week. Friday saw a lower beef market with the choice cutout closing $.35 lower to settle at $157.02 and the select cutout closing $.31 lower to settle at $146.18. Sales volume on Friday was light with 196 loads of beef sold (75.84 loads of choice fab cuts, 51.23 loads of select fab cuts, 21.80 loads of trim, 46.81 loads of grinds). The choice/select spread settled at $10.84 a loss of $.04 for the day, however a gain of $3.09 for the week.

The beef market was higher for most of the week last week, however the market was being met with some buyer resistance late in the week as many were getting their both their near term and forward needs into the end of the year covered. Once again the charge higher was led by active procurement of late year holiday cuts of beef as we see choice boneless ribeyes gaining $.60 in value and choice peeled tenders gaining $1.00 in value throughout the course of the week. This pushed rib and loin primal values 16% and 5% higher by the end of the trading week. There was some active interest in round items early in the week as retail interests covered up coming features for the first of December. A lack of export business kept more chuck product on the domestic market and as a result values drifted lower. Boneless beef items were mostly steady on the 50% fed cattle trim due to lighter fat cattle slaughters, but mostly lower on the boneless cow 90’s due to increased cow kills and competition from lower priced imports. By Friday of last week, many buyers were content with current inventory positions and were beginning to back away from the market waiting for opportunities to present themselves. Turkey items will now occupy most retail and wholesale attention for the next couple of weeks and I would expect to see beef values drift lower as a result of this. We may have one more beef buying spurt going into the first of December, however this will likely be short lived. Look for cutout values to drift lower from current price levels.

Futures Market Situation and Outlook:

For the week, December live cattle lost $2.75 to settle at $90.05, February live cattle lost $2.87 to settle at $90.67, and the April live cattle lost $2.85 to settle at $2.85. In the feeder cattle pit, November feeder cattle lost $2.25 to settle at $96.70, January feeder cattle lost $3.95 to settle at $95.27, and the March feeder cattle lost $3.75 to settle at $95.92. The reported CME feeder cattle index for 11/13/08 was $97.60 a gain of $.18 for the day and a gain of $1.15 for the week.

Friday’s live cattle volume saw 21,585 contracts trade in the pit and 11,347 contracts trade on Globex. Live cattle open interest gained 2,915 to come in this morning at 216,503. Friday’s feeder cattle volume saw 1,903 contracts trade in the pit and 703 contracts trade on Globex. Feeder cattle open interest gained 233 contracts to come in this morning at 19,149. For the week, live cattle open interest gained 329 contracts and feeder cattle open interest 140 contracts.

The latest commitment of traders report showed the small funds net short 5,090 contracts of live cattle futures and options a decline of 934 contracts from the previous week. The commercials were net short 72,909 contracts of F/O a gain of 444 contracts, the index funds were net long 105,891 contracts of live cattle F/O a decline of 1,144 contracts, and the small spec’s were net short 27,892 contracts of live cattle F/O a decline of 654 contracts. In the feeder cattle, small funds were net short 2,375 contracts of F/O a decline of 429 contracts, commercials were net long 1,175 contracts of F/O a decline of 875, index funds were net long 6,120 contracts of F/O a gain of 526, and the small spec’s were net short 4,920 contracts of F/O a gain of 80.

The live and feeder cattle futures markets were under pressure for most of last week on continued economic concerns and ideas beef and cattle markets were likely topping out for the near term. Live cattle lost close to $3 by the end of the week and feeders lost $4 because of this and took out many areas of near term chart support. December live cattle did manage to hold $90 by Friday and January feeder cattle did close above $95, however I would suspect we are down below these levels by early this week. Dow and S & P futures seem poised to make new lows by the first of the year and this will inevitably drag cattle futures down with them. Most traders will be expecting to see lower cash cattle and beef markets this week, which will keep a sell mentality in the cattle pits. First support on Dec live cattle will be found right here at $90, below that will be old contract lows of $87. Weekly resistance in December live cattle starts at $92 and goes up to $92.50. Jan feeders will have support at $95 early this week and below that $92-$93 seems likely. Resistance in Jan feeders will be found on rally attempts at $97.50 up to $98. Option trading was pretty quiet on Friday with volatilities increasing slightly. Look for a $.10-$.20 lower open to live and feeder cattle futures trading this morning. Trade Well!!!

Any one wanting a more detailed report on the cattle and beef markets including fundamental, chart and technical analysis, plus spec/hedge recommendations for packers, processors, producers, and meat buyers feel free to contact me by phone or e-mail to set up a free trial.

There is risk in trading futures and options.

Have a Good Day,

Troy Vetterkind
Vetterkind Cattle Brokerage, LLC
Chicago Board of Trade
141 West Jackson Blvd.
Suite 1220A
Chicago, IL 60604
1-888-299-1477 Toll Free
1-312-896-2068 Direct
1-708-224-5985 Mobile
tvetterkind@linngroup.com

Reproduction or rebroadcast of any portion of this information is strictly prohibited without the written permission of the Linn Group, Inc. the information reflected herein is derived from sources believed to be reliable; however, this information is not guaranteed as to its accuracy or completeness. Opinions expressed are subject to change without notice. This material and any view expressed herein are provided for informational purposes only and should not be construed in any way as an inducement to buy or sell commodity futures or options contracts. The Linn Group and its officers, directors, employees and affiliates may take positions for their own accounts in contracts referred to herein. Trading futures involves risk of loss. Past performance is not indicative of future results.

2008-11-14T06:38:00.001-08:00

November 14, 2008

Good Morning from the Chicago Board of Trade,

Cash Cattle Situation and Outlook:

We saw further fed cattle trading in the northern feedlots of Nebraska and Iowa yesterday with prices running generally steady with Wednesday at $90 live and $1.44 dressed. It looks as though an additional 25,000 head of cattle traded at that money between the two states. Southern feedlot trade remains at a standstill with packers bidding $92 live and feedlots wanting $94-$95 for their cattle. Feedlots in the southern section of the country were holding firm with their offering prices after the huge turnaround in the stock market yesterday and they remain very current on their market ready numbers of fed cattle. I would say that short bought southern packers will move closer to asking prices today and we should see a trade that takes place no worse than steady with last week. Next week we may see the market stall out a bit as packers will be buying for a short Thanksgiving kill week and the beef market could begin to fall back from current price levels. Tight fed cattle supplies for the next 3-4 weeks will keep the market from falling out of bed though.

Cash Beef Situation and Outlook:

Yesterdays kill was estimated at 125,000 head, which would be even with a week ago and 5,000 head below the same period last week. The week-to-date kill now stands at 469,000 head, which would be 14,000 head below the same period a week ago. The boxed beef market was $.12 higher on the choice cutout to settle at $157.37 and the select cutout was $.53 higher to settle at $146.49. Sales volume was good with 291 loads of beef sold (132.65 loads of choice fab cuts, 87.47 loads of select fab cuts, 23.24 loads of trim, 47.82 loads of grinds). The choice/select spread settled at $10.88 a loss of $.41.

The boxed beef market was higher yesterday on renewed interest in procuring choice rib and loin meat. End meats were also trading steady to higher yesterday as packers have done a good job of managing supply with the current level of demand from retail and wholesale buyers. Prices of ribeyes and PSMO’s could be getting close to a near term top though and this could start to level off cutout values. Next weeks attention will also turn to moving turkey product ahead of Thanksgiving, which could have an adverse effect on beef values. Look for a softer trend to begin develop in the beef market by the middle of next week. Beef exports for the week of October 31-November 6, 2008 are as follows:
Beef: Net sales of 18,200 MT were primarily for Mexico (8,900 MT, including 7,300 MT previously reported), South Korea (3,900 MT, including 3,800 MT previously reported), Canada (3,000 MT), and Japan (1,700 MT, including 900 MT previously reported). Net Sales of 700 MT for delivery in 2009 were primarily for the Netherlands (400 MT) and Taiwan (100 MT). Exports of 8,000 MT were mainly to Mexico (2,800 MT), South Korea (1,500 MT), Canada (1,200 MT), Japan (900 MT), Vietnam (900 MT), and Taiwan (300 MT). Note: Accumulated exports were adjusted down for Mexico (7,600 MT), South Korea (3,800 MT), Japan (900 MT), Hong Kong (200 MT), and Vietnam (100 MT).
Futures Market Situation and Outlook:

December live cattle settled at $90.55 a gain of $.02, February live cattle settled at $91.72 steady on the day, and April live cattle settled at $92.82 a gain of $.02. In the feeder cattle pit, November feeder cattle settled at $97.17 a gain of $.32, January feeder cattle settled at $96.37, and the March feeder cattle settled at $97.12 a gain of $.12. The reported CME feeder cattle index for 11/12/08 was $97.42 a loss of $.19.

Yesterdays live cattle volume saw 43,219 contracts trade in the pit and 19,451 contracts trade in the pit. Live cattle open interest gained 1,872 contracts to come in this morning at 213,649. Yesterday’s feeder cattle volume saw 2,907 contracts trade in the pit and 892 contracts trade on Globex. Feeder cattle open interest declined 243 contracts to come in this morning at 18,925.

Live and feeder cattle futures managed to settle mostly steady to modestly higher yesterday following the late come back in the equity markets. It was encouraging to see the cattle futures come back from their midsession sell off, however I am still not convinced we are out of the woods yet. We still need to see December live cattle close above $90 and January feeder cattle close above $95 by this afternoon in order to keep a bullish slant on next weeks early trade. December live cattle will find resistance today and early next week at $92.50 and January feeder cattle will find resistance at $98. We will need to close above those price levels early next week to keep any rally attempts alive. Hedgers will still want to use strength in the market to get some protection on Dec, Jan, and Feb marketing’s. Look for a $.10-$.20 higher open to cattle futures this morning. Trade Well!!!

Any one wanting a more detailed report on the cattle and beef markets including fundamental, chart and technical analysis, plus spec/hedge recommendations for packers, processors, producers, and meat buyers feel free to contact me by phone or e-mail to set up a free trial.

There is risk in trading futures and options.

Have a Good Day,

Troy Vetterkind
Vetterkind Cattle Brokerage, LLC
Chicago Board of Trade
141 West Jackson Blvd.
Suite 1220A
Chicago, IL 60604
1-888-299-1477 Toll Free
1-312-896-2068 Direct
1-708-224-5985 Mobile
tvetterkind@linngroup.com

Reproduction or rebroadcast of any portion of this information is strictly prohibited without the written permission of the Linn Group, Inc. the information reflected herein is derived from sources believed to be reliable; however, this information is not guaranteed as to its accuracy or completeness. Opinions expressed are subject to change without notice. This material and any view expressed herein are provided for informational purposes only and should not be construed in any way as an inducement to buy or sell commodity futures or options contracts. The Linn Group and its officers, directors, employees and affiliates may take positions for their own accounts in contracts referred to herein. Trading futures involves risk of loss. Past performance is not indicative of future results.

2008-11-12T06:22:00.000-08:00

November 12, 2008

Good Morning from the Chicago Board of Trade,

Cash Cattle Situation and Outlook:

The cash feedlot trade was at a standstill yesterday with packer bids of $91-$92 live going unmatched against feedlot offering prices of $96-$97 live and $1.50-$1.52 dressed. Producers were not interested in entertaining lower packer bids with the board being down sharply so early in the week. This is especially true in the southern feeding states where showlist numbers are smaller when compared to last week. Packers have this weeks kill curtailed in an attempt to keep beef prices propped up and so far this has been the case but we could start running into some buyer resistance on certain middle meat items in the beef carcass. This is not to say that we can’t see a higher live market for this week, but the market could back off a little going into the Thanksgiving holiday week. There will certainly be no oversupply of fed cattle numbers coming to the market in the next 4 weeks, however the market will definitely ebb and flow with beef demand and holiday schedules for the next couple of weeks. For the rest of this week though, I still think we can hold the fed market together as long as the beef or the futures don’t fall completely out of bed. I’ll still call for $94-$95 live and $1.46-$1.48 dressed trade in the feedlots by the end of the week.

Cash Beef Situation and Outlook:

The USDA did not publish slaughter numbers yesterday due to the Veteran’s Day holiday; however most in the industry are looking for a 625,000 head production week. The boxed beef market was higher yesterday with the choice cutout closing $2.62 higher to settle at $154.68 and the select cutout closing $.71 higher to settle at $144.27. Sales volume was light with 218 loads of beef sold (70.27 loads of choice fab cuts, 72.61 loads of select fab cuts, 29.88 loads of trim, 45.06 loads of grinds). The choice/select spread settled at $10.40 a gain of $1.91.

The beef market managed to post another day of solid gains, however some of those gains may begin to slow down in the coming sessions. Packers were able to command higher prices for most rib and loin items because of reduced production levels but many on the buy side of the equation were becoming of the opinion that prices were high enough for the time being. Choice bone-in and boneless ribeyes have gained $.65-$.96 ½ respectively since last week with choice PSMO’s gaining $.57 during the same time frame. These cuts alone are almost solely responsible for putting the $10 cwt on choice cutout values we have seen since last Tuesday. With that said though, markets for middle meats remain firm with continued active interest in procuring inside/outside rounds and chuck rolls for up coming feature ads. Choice and select short ribs were a laggard yesterday as export demand for these items is down. Boneless beef items were mixed once again, with sharply lower pricing noted on the boneless cow 90’s due to increasing cow numbers coming to market across the country and competition from lower priced imported beef. The 50’s market remained firm with the cut in fed cattle kill’s being the supportive factor there. I would look for the recent sharp gains in the middle meats complex to level off a bit, which means the end meat complex will have to be responsible for carrying the cutout higher. With a lack of export business and Thanksgiving right around the corner that would seem unlikely. Choice and select cutout values have met some near term price objectives and I would look for values to settle back into the lower $1.50’s to upper $1.40’s going into the Thanksgiving holiday week.

Futures Market Situation and Outlook:

December live cattle settled at $91.60 a loss of $1.05, February live cattle settled at $92.80 a loss of $1.35, and the April live cattle settled at $93.67 a loss of $1.60. In the feeder cattle pit, November feeder cattle settled at $98.20 a loss of $.80, January feeder cattle settled at $97.20 a loss of $1.67, and the March feeder cattle settled at $98.17 a loss of $1.45. The reported CME feeder cattle index for 11/10/08 was $97.74 a gain of $.19.

Yesterdays live cattle volume saw 37,700 contracts trade in the pit and 17,943 contracts trade on Globex. Live cattle open interest declined 1,757 contracts to come in this morning at 212,279. Yesterday’s feeder cattle volume saw 3,537 contracts trade in the pit and 530 contracts trade on Globex. Feeder cattle open interest gained 243 contracts to come in this morning at 19,020.

Live and feeder cattle futures settled under pressure yesterday on ideas the cash beef and cattle markets could move into a sideways to lower trading pattern and steep losses in the equity markets. Daily support levels in Dec live cattle and Jan feeders were violated early in the session yesterday and this added to spec and commercial selling interest. Weekly support at $91 in the Dec live and $97 in the Jan feeders managed to hold yesterday, however those support areas will likely be challenged today or tomorrow. Closing below these price levels by Friday opens the door to a lower trending market going into next week. I would say that we would need to see December live cattle close back above $92 and January feeder cattle close back above $98.50 today or tomorrow in order to negate some of yesterday’s bearishness. The “Goldman Roll” continued yesterday with an estimated 8-10,000 Dec/Feb spreads done in the pit and 6-7,000 done on the screen. Options trading was quiet with no real features, however volatility did come down again in Dec, Feb, and April at the money straddles. Overnight stock markets seem to be a little higher this morning, which should help to promote some stability in cattle futures on the open today. Rally attempts back towards yesterday’s highs will likely be viewed as a selling opportunity by many though. Look for a $.10-$.20 higher open to live and feeder cattle futures this morning. Trade Well!!!

Any one wanting a more detailed report on the cattle and beef markets including fundamental, chart and technical analysis, plus spec/hedge recommendations for packers, processors, producers, and meat buyers feel free to contact me by phone or e-mail to set up a free trial.

There is risk in trading futures and options.

Have a Good Day,

Troy Vetterkind
Vetterkind Cattle Brokerage, LLC
Chicago Board of Trade
141 West Jackson Blvd.
Suite 1220A
Chicago, IL 60604
1-888-299-1477 Toll Free
1-312-896-2068 Direct
1-708-224-5985 Mobile
tvetterkind@linngroup.com

Reproduction or rebroadcast of any portion of this information is strictly prohibited without the written permission of the Linn Group, Inc. the information reflected herein is derived from sources believed to be reliable; however, this information is not guaranteed as to its accuracy or completeness. Opinions expressed are subject to change without notice. This material and any view expressed herein are provided for informational purposes only and should not be construed in any way as an inducement to buy or sell commodity futures or options contracts. The Linn Group and its officers, directors, employees and affiliates may take positions for their own accounts in contracts referred to herein. Trading futures involves risk of loss. Past performance is not indicative of future results.