October 10, 2008
Good Morning from the Chicago Board of Trade,
Cash Cattle Situation and Outlook:
We saw a continued light fed cattle trade yesterday at prices steady with early week declines at $92 live in the south and $1.37-$1.40 dressed in the north. Trade volumes for the week still remain light and we are going to need to move more cattle by the end of the week. Look for further cleanup trade today at or slightly below the above mentioned prices. Next week’s cash market doesn’t look much better right now, unless we see some sort of stabilization in the equity markets, which in turn help stabilize cattle futures and the cash cattle market. Going home for the weekend all classes of fat cattle, feeder cattle, and slaughter cows are trading $2-$5 lower in the auction markets.
Cash Beef Situation and Outlook:
Yesterdays kill was estimated at 126,000 head, which would be even with a week ago and 2,000 head below the same day a year ago. The week-to-date kill now stands at 498,000 head, which would be 4,000 head below the same period last week with the industry looking for a 630,000 head production week. The boxed beef market was lower yesterday with the choice cutout closing $.30 lower to settle at $150.17 and the select cutout closing $.78 lower to settle at $143.89. Sales volume was good with 333 loads of beef sold (149.32 loads of choice fab cuts, 91.02 loads of select fab cuts, 39.53 loads of trim, 52.85 loads of grinds). The choice/select spread settled at $6.27 a gain of $.48.
The beef market was lower again yesterday, however some of the steep price declines seem to have subsided and the load counts are picking up. Middle meats remain a problem to move for quick ship, however there was some interest in pricing ribs and loins going forward. End meats were mostly steady yesterday as lower priced chuck and round meat will be main featured items at retail in the coming weeks. Look for a sideways to lower beef trade going into early next week.
Futures Market Situation and Outlook:
October live cattle settled at $92.12 a loss of $.32, December live cattle settled at $94.30 a loss of $.65, and the February live cattle settled at $94.82 a loss of $.27. In the feeder cattle pit, October feeder cattle settled at $98.45 a loss of $.45, November feeder cattle settled at $98.05 a loss of $.27, and the January feeder cattle settled at $98.05 a gain of $.12. The reported CME feeder cattle index for 10/8/08 was $100.85 a loss of $1.14.
Yesterdays live cattle volume saw 22,826 contracts trade in the pit and 10,123 trade on Globex. Live cattle open interest declined 2,077 contracts to come in this morning at 235,443. Yesterday’s feeder cattle volume saw 4,896 contracts trade in the pit and 2,004 contracts trade on Globex. Feeder cattle open interest declined 514 contracts to come in this morning at 23,959.
Live and feeder cattle futures continue to search for a bottom as the market opened modestly higher yesterday only to sell off on more economic worries. After the close the Dow Jones plunged 700 points lower pushing Globex cattle futures 200 points lower. Overnight Globex cattle futures are trading near limit down, so that is how we will likely open this morning in the pit. There was a supply/demand report released this morning which looks a little negative to the grain market on increased acreage for corn and beans. The USDA for the most part left the beef numbers alone, although they did raise this year and next years production estimates 15 mil and 100 mil lbs respectively on increased cow slaughter and increased feedlot placements for next year. They also raised this years beef exports 35 mil lbs and left next years export number alone. There were no new deliveries against the October live cattle contract yesterday. We will be sharply lower on the open today as we are trading in step with the Dow Jones. When the Dow rallies cattle rally and when the Dow breaks, cattle break. Until this stock market mess gets itself worked out we will continue to move lower in the cash cattle and futures markets. Look for a near limit down open to live and feeder cattle futures this morning. Trade Well!!!
Any one wanting a more detailed report on the cattle and beef markets including fundamental, chart and technical analysis, plus spec/hedge recommendations for packers, processors, producers, and meat buyers feel free to contact me by phone or e-mail to set up a free trial.
There is risk in trading futures and options.
Have a Good Day,
Troy Vetterkind
Vetterkind Cattle Brokerage, LLC
Chicago Board of Trade
141 West Jackson Blvd.
Suite 1220A
Chicago, IL 60604
1-888-299-1477 Toll Free
1-312-896-2068 Direct
1-708-224-5985 Mobile
tvetterkind@linngroup.com
Reproduction or rebroadcast of any portion of this information is strictly prohibited without the written permission of the Linn Group, Inc. the information reflected herein is derived from sources believed to be reliable; however, this information is not guaranteed as to its accuracy or completeness. Opinions expressed are subject to change without notice. This material and any view expressed herein are provided for informational purposes only and should not be construed in any way as an inducement to buy or sell commodity futures or options contracts. The Linn Group and its officers, directors, employees and affiliates may take positions for their own accounts in contracts referred to herein. Trading futures involves risk of loss. Past performance is not indicative of future results.
Friday, October 10, 2008
Thursday, October 9, 2008
October 9, 2008
Good Morning from the Chicago Board of Trade,
Cash Cattle Situation and Outlook:
We saw an active fed cattle trade develop on the northern and southern plains yesterday at sharply lower money when compared to the week before. Fed cattle were trading at mostly $92-$93 in Texas and Oklahoma, $91-$92 live and $1.46 dressed in Kansas, and $88-$91 live or $1.38-$1.42 dressed in Nebraska. Compared to last week live sales are mostly $4-$5 lower and dressed sales are mostly $5-$7 lower on moderate movement. The sale barn cattle were sharply lower yesterday as well with Sioux Falls, SD calling their fed cattle market $4-$5 lower on the beef fats, $3-$4 lower on the Holsteins, and $4-$5 lower on the slaughter cows. The tops on the choice beef fats in Sioux Falls yesterday was $84-$86 with the Holstein steers bringing $77-$78. Feeder cattle are sharply lower as well coming into midweek, with sales like Torrington, WY, El Reno, OK, and Kearney, NE all calling their feeder cattle sales $3-$6 lower. Most of the 6-8 weight beef steers destined to a feedlot bringing $90-$105.
Cash Beef Situation and Outlook:
Yesterdays kill was estimated at 122,000 head, which would be 3,000 head below the same day last week and 2,000 head below the same day a year ago. The week-to-date kill now stands at 372,000 head, which would be 4,000 head below the same period a week ago with the industry looking for a 635,000 head production week. The boxed beef market was lower yesterday with the choice cutout closing $4.59 lower to settle at $150.47 and the select cutout closing $1.89 lower to settle at $144.67. Sales volume was good with 437 loads of beef sold (141.88 loads of choice fab cuts, 171.37 loads of select fab cuts, 29.56 loads of trim, 94.56 loads of grinds). The choice/select spread settled at $5.80 a loss of $2.70.
The beef market was lower again yesterday with discounts once again surfacing throughout most of the carcass components. With the sharply lower markets though finally came a little better movement, as some were viewing certain beef items as having value and were willing to take on some extra inventory. There still remains a lot of concern over how the global economic meltdown will affect beef demand in the coming months. As such many are on the sidelines buying only on an as need basis. This is uncertainty is showing up overseas also as we see export sales back way off last week. Look for a softer trend to the beef market for the rest of the week and perhaps we can stabilize the market in the upper $1.40’s basis the choice cutout in the coming sessions. Beef export sales and shipments for the week of September 26-October 2, 2008 are as follows:
Beef: Net sales of 3,800 MT were primarily for South Korea (1,100 MT), Canada (1,000 MT), Japan (700 MT), Vietnam (600 MT), and Hong Kong (400 MT). Decreases were reported for Russia (600 MT). Exports of 11,700 MT were mainly to South Korea (3,900 MT), Mexico (3,700 MT), Japan (1,200 MT), Canada (1,100 MT), Vietnam (700 MT), Taiwan (400 MT), and Hong Kong (300 MT).
Futures Market Situation and Outlook:
October live cattle settled at $92.45 a loss of $.95, December live cattle settled at $94.95 a loss of $.15, and the February live cattle settled at $95.10 a loss of $.02. In the feeder cattle pit, October feeder cattle settled at $98.90 a loss of $.30, November feeder cattle settled at $98.32 a loss of $.32, and the January feeder cattle settled at $97.92 a gain of $.30. The reported CME feeder cattle index for 10/7/08 was $101.99 a loss of $.59.
Yesterdays live cattle volume saw 35,504 contracts trade in the pit and 15,213 contracts trade on Globex. Live cattle open interest declined 1,825 contracts to come in this morning at 237,553. Yesterday’s feeder cattle volume saw 5,570 contracts trade in the pit and 2,244 contracts trade on Globex. Feeder cattle open interest declined 604 contracts to come in this morning at 24,483.
It was another wild day in the CME cattle pits with many live and feeder cattle contracts trading limit down or close to limit down early in the session on the sharply lower cash fed cattle market, only to recover going into the close on hedge lifting, short covering, and bottom picking by speculators. I don’t know if yesterday was the bottom or not, but we did see some price action that I was looking for and indicative of putting a bottom in the cattle market (i.e. trading cash sharply lower, trading futures sharply lower, and the futures market recovering late in the day). The stock market was all over the place yesterday as well, which was an influencing factor in the cattle market. In the stock market too, I don’t know if we made a bottom yet, but I think it is close. We saw Central Banks in the U.S. and Europe cut interest rates two nights ago, and three Central Banks in Asia cut rates last night, all of which has overseas markets trading higher overnight and our market pointing to a higher open this morning. Throughout all of this one thing that has been happening the last couple of days is that the credit markets are loosening up and banks are starting to do business with each other again so there are some positives for at least a corrective rally in the stock market for the near term. Most live and feeder cattle issues were able to come back and close above Monday’s limit down lows, which is encouraging, however we will need to hold onto these lows on a closing basis by Friday afternoon. The only contract that wasn’t able to come back and close above its low on Monday was the October live cattle, which was prohibited from doing so by the sharply lower cash fed cattle market. We will need to see some follow through to the upside today and tomorrow in order to keep a corrective rally alive into next week. Again, much will depend on how the stock market holds up the rest of this week and into the first part of next. The “Goldman’s” are rolling out of November feeder cattle into January, so this is going to keep a little pressure on the Nov contract and support Jan for the rest of the week on a closing basis. There were no new deliveries against October live cattle last night, however the 10 loads delivered on Tuesday were retendered and demanded for by Newedge (believe this to be a packer). I would look for a little higher start to cattle futures trading this morning, and would probably try to buy fats and feeders on a break today if one presented itself. Still like some sort of upside call strategy, either outrights or spreads, to take advantage of a corrective rally higher in the coming weeks. If selling cash cattle in a down market here, I would reown those sales via call options as well. Look for a $.10-$.20 higher open to live and feeder cattle futures this morning. Trade Well!!!
Any one wanting a more detailed report on the cattle and beef markets including fundamental, chart and technical analysis, plus spec/hedge recommendations for packers, processors, producers, and meat buyers feel free to contact me by phone or e-mail to set up a free trial.
There is risk in trading futures and options.
Have a Good Day,
Troy Vetterkind
Vetterkind Cattle Brokerage, LLC
Chicago Board of Trade
141 West Jackson Blvd.
Suite 1220A
Chicago, IL 60604
1-888-299-1477 Toll Free
1-312-896-2068 Direct
1-708-224-5985 Mobile
tvetterkind@linngroup.com
Reproduction or rebroadcast of any portion of this information is strictly prohibited without the written permission of the Linn Group, Inc. the information reflected herein is derived from sources believed to be reliable; however, this information is not guaranteed as to its accuracy or completeness. Opinions expressed are subject to change without notice. This material and any view expressed herein are provided for informational purposes only and should not be construed in any way as an inducement to buy or sell commodity futures or options contracts. The Linn Group and its officers, directors, employees and affiliates may take positions for their own accounts in contracts referred to herein. Trading futures involves risk of loss. Past performance is not indicative of future results.
Good Morning from the Chicago Board of Trade,
Cash Cattle Situation and Outlook:
We saw an active fed cattle trade develop on the northern and southern plains yesterday at sharply lower money when compared to the week before. Fed cattle were trading at mostly $92-$93 in Texas and Oklahoma, $91-$92 live and $1.46 dressed in Kansas, and $88-$91 live or $1.38-$1.42 dressed in Nebraska. Compared to last week live sales are mostly $4-$5 lower and dressed sales are mostly $5-$7 lower on moderate movement. The sale barn cattle were sharply lower yesterday as well with Sioux Falls, SD calling their fed cattle market $4-$5 lower on the beef fats, $3-$4 lower on the Holsteins, and $4-$5 lower on the slaughter cows. The tops on the choice beef fats in Sioux Falls yesterday was $84-$86 with the Holstein steers bringing $77-$78. Feeder cattle are sharply lower as well coming into midweek, with sales like Torrington, WY, El Reno, OK, and Kearney, NE all calling their feeder cattle sales $3-$6 lower. Most of the 6-8 weight beef steers destined to a feedlot bringing $90-$105.
Cash Beef Situation and Outlook:
Yesterdays kill was estimated at 122,000 head, which would be 3,000 head below the same day last week and 2,000 head below the same day a year ago. The week-to-date kill now stands at 372,000 head, which would be 4,000 head below the same period a week ago with the industry looking for a 635,000 head production week. The boxed beef market was lower yesterday with the choice cutout closing $4.59 lower to settle at $150.47 and the select cutout closing $1.89 lower to settle at $144.67. Sales volume was good with 437 loads of beef sold (141.88 loads of choice fab cuts, 171.37 loads of select fab cuts, 29.56 loads of trim, 94.56 loads of grinds). The choice/select spread settled at $5.80 a loss of $2.70.
The beef market was lower again yesterday with discounts once again surfacing throughout most of the carcass components. With the sharply lower markets though finally came a little better movement, as some were viewing certain beef items as having value and were willing to take on some extra inventory. There still remains a lot of concern over how the global economic meltdown will affect beef demand in the coming months. As such many are on the sidelines buying only on an as need basis. This is uncertainty is showing up overseas also as we see export sales back way off last week. Look for a softer trend to the beef market for the rest of the week and perhaps we can stabilize the market in the upper $1.40’s basis the choice cutout in the coming sessions. Beef export sales and shipments for the week of September 26-October 2, 2008 are as follows:
Beef: Net sales of 3,800 MT were primarily for South Korea (1,100 MT), Canada (1,000 MT), Japan (700 MT), Vietnam (600 MT), and Hong Kong (400 MT). Decreases were reported for Russia (600 MT). Exports of 11,700 MT were mainly to South Korea (3,900 MT), Mexico (3,700 MT), Japan (1,200 MT), Canada (1,100 MT), Vietnam (700 MT), Taiwan (400 MT), and Hong Kong (300 MT).
Futures Market Situation and Outlook:
October live cattle settled at $92.45 a loss of $.95, December live cattle settled at $94.95 a loss of $.15, and the February live cattle settled at $95.10 a loss of $.02. In the feeder cattle pit, October feeder cattle settled at $98.90 a loss of $.30, November feeder cattle settled at $98.32 a loss of $.32, and the January feeder cattle settled at $97.92 a gain of $.30. The reported CME feeder cattle index for 10/7/08 was $101.99 a loss of $.59.
Yesterdays live cattle volume saw 35,504 contracts trade in the pit and 15,213 contracts trade on Globex. Live cattle open interest declined 1,825 contracts to come in this morning at 237,553. Yesterday’s feeder cattle volume saw 5,570 contracts trade in the pit and 2,244 contracts trade on Globex. Feeder cattle open interest declined 604 contracts to come in this morning at 24,483.
It was another wild day in the CME cattle pits with many live and feeder cattle contracts trading limit down or close to limit down early in the session on the sharply lower cash fed cattle market, only to recover going into the close on hedge lifting, short covering, and bottom picking by speculators. I don’t know if yesterday was the bottom or not, but we did see some price action that I was looking for and indicative of putting a bottom in the cattle market (i.e. trading cash sharply lower, trading futures sharply lower, and the futures market recovering late in the day). The stock market was all over the place yesterday as well, which was an influencing factor in the cattle market. In the stock market too, I don’t know if we made a bottom yet, but I think it is close. We saw Central Banks in the U.S. and Europe cut interest rates two nights ago, and three Central Banks in Asia cut rates last night, all of which has overseas markets trading higher overnight and our market pointing to a higher open this morning. Throughout all of this one thing that has been happening the last couple of days is that the credit markets are loosening up and banks are starting to do business with each other again so there are some positives for at least a corrective rally in the stock market for the near term. Most live and feeder cattle issues were able to come back and close above Monday’s limit down lows, which is encouraging, however we will need to hold onto these lows on a closing basis by Friday afternoon. The only contract that wasn’t able to come back and close above its low on Monday was the October live cattle, which was prohibited from doing so by the sharply lower cash fed cattle market. We will need to see some follow through to the upside today and tomorrow in order to keep a corrective rally alive into next week. Again, much will depend on how the stock market holds up the rest of this week and into the first part of next. The “Goldman’s” are rolling out of November feeder cattle into January, so this is going to keep a little pressure on the Nov contract and support Jan for the rest of the week on a closing basis. There were no new deliveries against October live cattle last night, however the 10 loads delivered on Tuesday were retendered and demanded for by Newedge (believe this to be a packer). I would look for a little higher start to cattle futures trading this morning, and would probably try to buy fats and feeders on a break today if one presented itself. Still like some sort of upside call strategy, either outrights or spreads, to take advantage of a corrective rally higher in the coming weeks. If selling cash cattle in a down market here, I would reown those sales via call options as well. Look for a $.10-$.20 higher open to live and feeder cattle futures this morning. Trade Well!!!
Any one wanting a more detailed report on the cattle and beef markets including fundamental, chart and technical analysis, plus spec/hedge recommendations for packers, processors, producers, and meat buyers feel free to contact me by phone or e-mail to set up a free trial.
There is risk in trading futures and options.
Have a Good Day,
Troy Vetterkind
Vetterkind Cattle Brokerage, LLC
Chicago Board of Trade
141 West Jackson Blvd.
Suite 1220A
Chicago, IL 60604
1-888-299-1477 Toll Free
1-312-896-2068 Direct
1-708-224-5985 Mobile
tvetterkind@linngroup.com
Reproduction or rebroadcast of any portion of this information is strictly prohibited without the written permission of the Linn Group, Inc. the information reflected herein is derived from sources believed to be reliable; however, this information is not guaranteed as to its accuracy or completeness. Opinions expressed are subject to change without notice. This material and any view expressed herein are provided for informational purposes only and should not be construed in any way as an inducement to buy or sell commodity futures or options contracts. The Linn Group and its officers, directors, employees and affiliates may take positions for their own accounts in contracts referred to herein. Trading futures involves risk of loss. Past performance is not indicative of future results.
Wednesday, October 8, 2008
October 8, 2008
Good Morning from the Chicago Board of Trade,
Cash Cattle Situation and Outlook:
Yesterday’s cash cattle market was largely untested except for a handful of cattle trading in Nebraska at $1.42 dressed. The way it looks right now the southern feedlot trade is likely going to take place somewhere around $93-$95 and the northern dressed trade is going to be right around $1.42 give or take a dollar by Friday afternoon. The sale barn trade is showing fat cattle off by $2-$3, feeder cattle off by $2-$3, and slaughter cows off by $1-$2. The volatility in the cash market is going to keep up with the volatility in the futures market, as the futures are leading the cash lower at this point. Once the futures get straightened out, the cash should get straightened out.
Cash Beef Situation and Outlook:
Yesterdays kill was estimated at 127,000 head, which would be 1,000 head above last week and 1,000 head below the same day a year ago. The week-to-date kill now stands at 250,000 head, which would be 1,000 head below the same period a week ago with the industry looking for a 635,000 head production week. The boxed beef market was lower with the choice cutout closing $1.10 lower to settle at $155.06 and the select cutout closing $.45 lower to settle at $146.56. Sales volume was light with 273 loads of beef sold (116.80 loads of choice fab cuts, 89.85 loads of select fab cuts, 18.98 loads of trim, 47.14 loads of grinds). The choice/select spread settled at $8.50 a loss of $.65.
The beef market was lower yesterday as there is as much uncertainty in the beef trade as there is in the cash cattle and futures trade right now. There were a few bright spots in the cutout yesterday though, as we saw some higher money being paid on ribeye’s, short ribs, and top butts. Thin meats, coarse ground, and boneless beef markets were mostly lower yesterday as were certain round items. Here too, the beef market will be choppy and volatile until more calm comes into the global equity markets. No one is willing to take on inventory unless it is on an as need basis or the price looks cheap enough. Look for more of the same the rest of the week.
Futures Market Situation and Outlook:
October live cattle settled at $93.40 a gain of $.80, December live cattle settled at $95.10 a gain of $.32, and the February live cattle settled at $95.12 a gain of $.42. In the feeder cattle pit, October feeder cattle settled at $99.20 a gain of $1.52, November feeder cattle settled at $98.65 a gain of $.85, and the January feeder cattle settled at $97.62 a gain of $.22. The reported CME feeder cattle index for 10/6/08 was $102.58 a loss of $1.53.
Yesterdays live cattle volume saw 24,959 contracts trade in the pit and 14,576 contracts trade on Globex. Live cattle open interest gained 644 contracts to come in this morning at 239,492. Yesterday’s feeder cattle volume saw 5,350 contracts trade in the pit and 1,433 contracts trade on Globex. Feeder cattle open interest declined 748 contracts to come in this morning at 25,088.
Live and feeder cattle futures settled mostly higher yesterday on short covering from the massive sell on Monday. However, futures settled well off their highs of the day as the Dow Jones Industrial Average faded late in the day to close 500 points lower. Overnight we see a massive sell off in Asian and European stock markets, which has Dow futures pointing to another 200 point lower open this morning as of this writing. An example of overnight volatility shows soybean futures going from $.09 lower around 6:30 pm to almost $.63 higher by 10:00 pm, only to show up $.11 lower by 5:00 am this morning. There was panic selling across the globe last night as the European banking system seems to be in worst shape than ours, and investors are pulling money out of mutual funds and hedge funds around the world because of this. All of this will have all of our markets opening lower this morning, sharply lower in some instances, and our cattle market won’t be any different. Our cattle market isn’t going to do anything but keep going lower until the stock market straightens out. And when that happens is anybody’s guess right now, but I think it is getting close as we are seeing panic and irrational selling in all of the World’s stock markets right now. It’s the same as in our commodity markets, when people can’t take it anymore and they get out, whether they are long or short, that is when you usually post an important top or bottom in a market, and the same type of scenario seems to be playing out in the equity markets right now. A good clue as to when we may have seen a bottom in the cattle market, would be to see a day when we trade sharply lower to limit down early and come back to close higher by the end of the day, and so far we haven’t seen that type of price action yet. Closing below Monday’s lows of $94.77 in December live cattle and $97.80 in November feeder cattle will keep the market heading lower in the near term. Volatility is going to be huge until we get this mess straightened out, so you need to be very careful if your trading futures. If your worried about protecting inventory buy puts, otherwise as you are selling cattle in this down market, buy them back with call options, as we will come out of this at some point. Deliveries against the October contract started Monday with 16 loads posted. Those 16 loads were retendered last night and demaded for by NEWEDGE. There were 10 new loads delivered last night by Cadent in Norfolk, NE, with FC Stone and Oak receiving them. I would look for another $.25-$.50 lower open to live and feeder cattle futures this morning and we will have to see how we handle Monday’s lows by the close of trading today. Trade Well!!!
UPDATE: Most of what I wrote this morning was before 6:00 am. At 6:00 am the Fed announced they cut the Fed Fund rate by 50 basis points to 1.5%. This rallied the overseas stock markets and Dow and S&P futures shortly after the news. At the same time overnight cattle futures were trading $.30-$.60 lower, as of 7:30 am cattle Globex cattle futures are trading closer to steady. We are trading almost tick for tick with Dow futures, so wherever they are by the open is where cattle futures will open.
Any one wanting a more detailed report on the cattle and beef markets including fundamental, chart and technical analysis, plus spec/hedge recommendations for packers, processors, producers, and meat buyers feel free to contact me by phone or e-mail to set up a free trial.
There is risk in trading futures and options.
Have a Good Day,
Troy Vetterkind
Vetterkind Cattle Brokerage, LLC
Chicago Board of Trade
141 West Jackson Blvd.
Suite 1220A
Chicago, IL 60604
1-888-299-1477 Toll Free
1-312-896-2068 Direct
1-708-224-5985 Mobile
tvetterkind@linngroup.com
Reproduction or rebroadcast of any portion of this information is strictly prohibited without the written permission of the Linn Group, Inc. the information reflected herein is derived from sources believed to be reliable; however, this information is not guaranteed as to its accuracy or completeness. Opinions expressed are subject to change without notice. This material and any view expressed herein are provided for informational purposes only and should not be construed in any way as an inducement to buy or sell commodity futures or options contracts. The Linn Group and its officers, directors, employees and affiliates may take positions for their own accounts in contracts referred to herein. Trading futures involves risk of loss. Past performance is not indicative of future results.
Good Morning from the Chicago Board of Trade,
Cash Cattle Situation and Outlook:
Yesterday’s cash cattle market was largely untested except for a handful of cattle trading in Nebraska at $1.42 dressed. The way it looks right now the southern feedlot trade is likely going to take place somewhere around $93-$95 and the northern dressed trade is going to be right around $1.42 give or take a dollar by Friday afternoon. The sale barn trade is showing fat cattle off by $2-$3, feeder cattle off by $2-$3, and slaughter cows off by $1-$2. The volatility in the cash market is going to keep up with the volatility in the futures market, as the futures are leading the cash lower at this point. Once the futures get straightened out, the cash should get straightened out.
Cash Beef Situation and Outlook:
Yesterdays kill was estimated at 127,000 head, which would be 1,000 head above last week and 1,000 head below the same day a year ago. The week-to-date kill now stands at 250,000 head, which would be 1,000 head below the same period a week ago with the industry looking for a 635,000 head production week. The boxed beef market was lower with the choice cutout closing $1.10 lower to settle at $155.06 and the select cutout closing $.45 lower to settle at $146.56. Sales volume was light with 273 loads of beef sold (116.80 loads of choice fab cuts, 89.85 loads of select fab cuts, 18.98 loads of trim, 47.14 loads of grinds). The choice/select spread settled at $8.50 a loss of $.65.
The beef market was lower yesterday as there is as much uncertainty in the beef trade as there is in the cash cattle and futures trade right now. There were a few bright spots in the cutout yesterday though, as we saw some higher money being paid on ribeye’s, short ribs, and top butts. Thin meats, coarse ground, and boneless beef markets were mostly lower yesterday as were certain round items. Here too, the beef market will be choppy and volatile until more calm comes into the global equity markets. No one is willing to take on inventory unless it is on an as need basis or the price looks cheap enough. Look for more of the same the rest of the week.
Futures Market Situation and Outlook:
October live cattle settled at $93.40 a gain of $.80, December live cattle settled at $95.10 a gain of $.32, and the February live cattle settled at $95.12 a gain of $.42. In the feeder cattle pit, October feeder cattle settled at $99.20 a gain of $1.52, November feeder cattle settled at $98.65 a gain of $.85, and the January feeder cattle settled at $97.62 a gain of $.22. The reported CME feeder cattle index for 10/6/08 was $102.58 a loss of $1.53.
Yesterdays live cattle volume saw 24,959 contracts trade in the pit and 14,576 contracts trade on Globex. Live cattle open interest gained 644 contracts to come in this morning at 239,492. Yesterday’s feeder cattle volume saw 5,350 contracts trade in the pit and 1,433 contracts trade on Globex. Feeder cattle open interest declined 748 contracts to come in this morning at 25,088.
Live and feeder cattle futures settled mostly higher yesterday on short covering from the massive sell on Monday. However, futures settled well off their highs of the day as the Dow Jones Industrial Average faded late in the day to close 500 points lower. Overnight we see a massive sell off in Asian and European stock markets, which has Dow futures pointing to another 200 point lower open this morning as of this writing. An example of overnight volatility shows soybean futures going from $.09 lower around 6:30 pm to almost $.63 higher by 10:00 pm, only to show up $.11 lower by 5:00 am this morning. There was panic selling across the globe last night as the European banking system seems to be in worst shape than ours, and investors are pulling money out of mutual funds and hedge funds around the world because of this. All of this will have all of our markets opening lower this morning, sharply lower in some instances, and our cattle market won’t be any different. Our cattle market isn’t going to do anything but keep going lower until the stock market straightens out. And when that happens is anybody’s guess right now, but I think it is getting close as we are seeing panic and irrational selling in all of the World’s stock markets right now. It’s the same as in our commodity markets, when people can’t take it anymore and they get out, whether they are long or short, that is when you usually post an important top or bottom in a market, and the same type of scenario seems to be playing out in the equity markets right now. A good clue as to when we may have seen a bottom in the cattle market, would be to see a day when we trade sharply lower to limit down early and come back to close higher by the end of the day, and so far we haven’t seen that type of price action yet. Closing below Monday’s lows of $94.77 in December live cattle and $97.80 in November feeder cattle will keep the market heading lower in the near term. Volatility is going to be huge until we get this mess straightened out, so you need to be very careful if your trading futures. If your worried about protecting inventory buy puts, otherwise as you are selling cattle in this down market, buy them back with call options, as we will come out of this at some point. Deliveries against the October contract started Monday with 16 loads posted. Those 16 loads were retendered last night and demaded for by NEWEDGE. There were 10 new loads delivered last night by Cadent in Norfolk, NE, with FC Stone and Oak receiving them. I would look for another $.25-$.50 lower open to live and feeder cattle futures this morning and we will have to see how we handle Monday’s lows by the close of trading today. Trade Well!!!
UPDATE: Most of what I wrote this morning was before 6:00 am. At 6:00 am the Fed announced they cut the Fed Fund rate by 50 basis points to 1.5%. This rallied the overseas stock markets and Dow and S&P futures shortly after the news. At the same time overnight cattle futures were trading $.30-$.60 lower, as of 7:30 am cattle Globex cattle futures are trading closer to steady. We are trading almost tick for tick with Dow futures, so wherever they are by the open is where cattle futures will open.
Any one wanting a more detailed report on the cattle and beef markets including fundamental, chart and technical analysis, plus spec/hedge recommendations for packers, processors, producers, and meat buyers feel free to contact me by phone or e-mail to set up a free trial.
There is risk in trading futures and options.
Have a Good Day,
Troy Vetterkind
Vetterkind Cattle Brokerage, LLC
Chicago Board of Trade
141 West Jackson Blvd.
Suite 1220A
Chicago, IL 60604
1-888-299-1477 Toll Free
1-312-896-2068 Direct
1-708-224-5985 Mobile
tvetterkind@linngroup.com
Reproduction or rebroadcast of any portion of this information is strictly prohibited without the written permission of the Linn Group, Inc. the information reflected herein is derived from sources believed to be reliable; however, this information is not guaranteed as to its accuracy or completeness. Opinions expressed are subject to change without notice. This material and any view expressed herein are provided for informational purposes only and should not be construed in any way as an inducement to buy or sell commodity futures or options contracts. The Linn Group and its officers, directors, employees and affiliates may take positions for their own accounts in contracts referred to herein. Trading futures involves risk of loss. Past performance is not indicative of future results.
Tuesday, October 7, 2008
October 7, 2008
Good Morning from the Chicago Board of Trade,
Cash Cattle Situation and Outlook:
We saw a few cattle start to trade yesterday afternoon in Kansas, Nebraska, and Iowa at lower money when compared to the previous week. There were a couple thousand head sold in Kansas at $93-$94 live, a couple thousand head of cattle sold in Nebraska at $1.42-$1.44 dressed, and a couple thousand head of cattle sold in Iowa at $1.42-$1.44 dressed. The rest of feedlot country was willing to wait to see if the market would stabilize before making any marketing decisions. A look at last weeks feedlot sales shows Texas selling 32,912 head of fed cattle for $96-$97, Kansas feedlots selling 35,861 head of fed cattle for $96-$97 live and $1.52-$1.53 dressed, and Nebraska feedlots selling 49,125 head of fed cattle for $94-$97 live and $1.45-$1.49 dressed. Volume looks a little light in all trading areas when compared to the previous week, which is leading to a little larger showlist offering in the north and steady to smaller in the south. All classes of cash cattle selling through the auction markets were lower yesterday as we see fat cattle off $2-$3, feeders off $4-$5, and cows off $1-$2. I would look for another lower feedlot trade when everything is said and done this week, with the market staying under pressure until we get some of these big cattle cleaned up in the north.
Cash Beef Situation and Outlook:
Yesterdays kill was estimated at 123,000 head, which would be 2,000 head below last week and 4,000 head below the same day a year ago. The industry will be looking for a 635,000 head production week. The boxed beef market was higher yesterday with the choice cutout closing $3.74 higher to settle at $156.16 and the select cutout closing $.42 higher to settle at $147.01. Sales volume was light with 181 loads of beef sold (72.32 loads of choice fab cuts, 49.92 loads of select fab cuts, 10.05 loads of trim, 48.41 loads of grinds). The choice/select spread settled at $9.15 a gain of $3.32.
The beef market was mostly steady to lower yesterday, however the USDA was marking the choice cutout $3.74 higher due to a large package of ribeyes that traded at higher money versus light volume and trade, which skewed the value of the cutout. Private sources indicate that beef prices were mostly lower yesterday, most notably again in the middle meats (i.e. ribs and loins). There was also some discounting throughout the chucks and rounds yesterday, however not to the extent of the middles. Demand for beef has slowed considerably at the restaurant level, however retail and wholesale demand isn’t all that bad. Look for the beef market to find some support by midweek.
Futures Market Situation and Outlook:
October live cattle settled at $92.60 a loss of $3.00, December live cattle settled at $94.77 a loss of $3.00, and the February live cattle settled at $94.70 a loss of $3.00. In the feeder cattle pit, October feeder cattle settled at $97.67 a loss of $3.00, November feeder cattle settled at $97.80 a loss of $3.00, and the January feeder cattle settled at $97.40 a loss of $3.00. The reported CME feeder cattle index for 10/6/08 was $104.11 a loss of $.83.
Yesterdays live cattle volume saw 32,205 contracts trade in the pit and 8,978 contracts trade on Globex. Live cattle open interest declined 1,414 contracts to come in this morning at 240,407. Yesterday’s feeder cattle volume saw 3,506 contracts trade in the pit and 1,816 contracts trade on Globex. Feeder cattle open interest declined 59 contracts to come in this morning at 25,945.
Live and feeder cattle futures settled limit down yesterday on further liquidation linked to worries over the economy. The lower futures trade is leading the cash markets lower and just exactly where the bottom is at has yet to be determined. It’s hard to pick a bottom in a liquidating market; however I can’t help but think we are getting close to finding some stabilization in the stock market by midweek, which would go along way in helping the cattle futures post a near term low. Weekly support will be found at yesterday’s limit down settlements on all live and feeder cattle futures contracts. Taking yesterdays lows out opens the door for more downside, however I think as long as the stock market holds together, cattle futures will as well. Look for a $.50-$1.00 higher open to live and feeder cattle futures this morning. Trade Well!!!
Any one wanting a more detailed report on the cattle and beef markets including fundamental, chart and technical analysis, plus spec/hedge recommendations for packers, processors, producers, and meat buyers feel free to contact me by phone or e-mail to set up a free trial.
There is risk in trading futures and options.
Have a Good Day,
Troy Vetterkind
Vetterkind Cattle Brokerage, LLC
Chicago Board of Trade
141 West Jackson Blvd.
Suite 1220A
Chicago, IL 60604
1-888-299-1477 Toll Free
1-312-896-2068 Direct
1-708-224-5985 Mobile
tvetterkind@linngroup.com
Reproduction or rebroadcast of any portion of this information is strictly prohibited without the written permission of the Linn Group, Inc. the information reflected herein is derived from sources believed to be reliable; however, this information is not guaranteed as to its accuracy or completeness. Opinions expressed are subject to change without notice. This material and any view expressed herein are provided for informational purposes only and should not be construed in any way as an inducement to buy or sell commodity futures or options contracts. The Linn Group and its officers, directors, employees and affiliates may take positions for their own accounts in contracts referred to herein. Trading futures involves risk of loss. Past performance is not indicative of future results.
Good Morning from the Chicago Board of Trade,
Cash Cattle Situation and Outlook:
We saw a few cattle start to trade yesterday afternoon in Kansas, Nebraska, and Iowa at lower money when compared to the previous week. There were a couple thousand head sold in Kansas at $93-$94 live, a couple thousand head of cattle sold in Nebraska at $1.42-$1.44 dressed, and a couple thousand head of cattle sold in Iowa at $1.42-$1.44 dressed. The rest of feedlot country was willing to wait to see if the market would stabilize before making any marketing decisions. A look at last weeks feedlot sales shows Texas selling 32,912 head of fed cattle for $96-$97, Kansas feedlots selling 35,861 head of fed cattle for $96-$97 live and $1.52-$1.53 dressed, and Nebraska feedlots selling 49,125 head of fed cattle for $94-$97 live and $1.45-$1.49 dressed. Volume looks a little light in all trading areas when compared to the previous week, which is leading to a little larger showlist offering in the north and steady to smaller in the south. All classes of cash cattle selling through the auction markets were lower yesterday as we see fat cattle off $2-$3, feeders off $4-$5, and cows off $1-$2. I would look for another lower feedlot trade when everything is said and done this week, with the market staying under pressure until we get some of these big cattle cleaned up in the north.
Cash Beef Situation and Outlook:
Yesterdays kill was estimated at 123,000 head, which would be 2,000 head below last week and 4,000 head below the same day a year ago. The industry will be looking for a 635,000 head production week. The boxed beef market was higher yesterday with the choice cutout closing $3.74 higher to settle at $156.16 and the select cutout closing $.42 higher to settle at $147.01. Sales volume was light with 181 loads of beef sold (72.32 loads of choice fab cuts, 49.92 loads of select fab cuts, 10.05 loads of trim, 48.41 loads of grinds). The choice/select spread settled at $9.15 a gain of $3.32.
The beef market was mostly steady to lower yesterday, however the USDA was marking the choice cutout $3.74 higher due to a large package of ribeyes that traded at higher money versus light volume and trade, which skewed the value of the cutout. Private sources indicate that beef prices were mostly lower yesterday, most notably again in the middle meats (i.e. ribs and loins). There was also some discounting throughout the chucks and rounds yesterday, however not to the extent of the middles. Demand for beef has slowed considerably at the restaurant level, however retail and wholesale demand isn’t all that bad. Look for the beef market to find some support by midweek.
Futures Market Situation and Outlook:
October live cattle settled at $92.60 a loss of $3.00, December live cattle settled at $94.77 a loss of $3.00, and the February live cattle settled at $94.70 a loss of $3.00. In the feeder cattle pit, October feeder cattle settled at $97.67 a loss of $3.00, November feeder cattle settled at $97.80 a loss of $3.00, and the January feeder cattle settled at $97.40 a loss of $3.00. The reported CME feeder cattle index for 10/6/08 was $104.11 a loss of $.83.
Yesterdays live cattle volume saw 32,205 contracts trade in the pit and 8,978 contracts trade on Globex. Live cattle open interest declined 1,414 contracts to come in this morning at 240,407. Yesterday’s feeder cattle volume saw 3,506 contracts trade in the pit and 1,816 contracts trade on Globex. Feeder cattle open interest declined 59 contracts to come in this morning at 25,945.
Live and feeder cattle futures settled limit down yesterday on further liquidation linked to worries over the economy. The lower futures trade is leading the cash markets lower and just exactly where the bottom is at has yet to be determined. It’s hard to pick a bottom in a liquidating market; however I can’t help but think we are getting close to finding some stabilization in the stock market by midweek, which would go along way in helping the cattle futures post a near term low. Weekly support will be found at yesterday’s limit down settlements on all live and feeder cattle futures contracts. Taking yesterdays lows out opens the door for more downside, however I think as long as the stock market holds together, cattle futures will as well. Look for a $.50-$1.00 higher open to live and feeder cattle futures this morning. Trade Well!!!
Any one wanting a more detailed report on the cattle and beef markets including fundamental, chart and technical analysis, plus spec/hedge recommendations for packers, processors, producers, and meat buyers feel free to contact me by phone or e-mail to set up a free trial.
There is risk in trading futures and options.
Have a Good Day,
Troy Vetterkind
Vetterkind Cattle Brokerage, LLC
Chicago Board of Trade
141 West Jackson Blvd.
Suite 1220A
Chicago, IL 60604
1-888-299-1477 Toll Free
1-312-896-2068 Direct
1-708-224-5985 Mobile
tvetterkind@linngroup.com
Reproduction or rebroadcast of any portion of this information is strictly prohibited without the written permission of the Linn Group, Inc. the information reflected herein is derived from sources believed to be reliable; however, this information is not guaranteed as to its accuracy or completeness. Opinions expressed are subject to change without notice. This material and any view expressed herein are provided for informational purposes only and should not be construed in any way as an inducement to buy or sell commodity futures or options contracts. The Linn Group and its officers, directors, employees and affiliates may take positions for their own accounts in contracts referred to herein. Trading futures involves risk of loss. Past performance is not indicative of future results.
Monday, October 6, 2008
October 6, 2008
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 $94-$97 live and $1.47-$1.54 dressed, with the lower end of the trade taking place in the northern tier of cattle feeding country on moderate sales volume. There was some reported clean up trade in Nebraska of Friday at $1.45 dressed. An imploding futures market and falling beef market were catalysts for the lower trade. For the week, the feeder cattle market was $2-$6 lower, with most of the declines coming in fresh unweaned new crop calves. Concerns over the stock market and credit markets were also an influence in the lower feeder cattle trade. Slaughter cow markets were lower last week as well, as we begin to see more cows coming to town. Looking into this week I don’t see a lot of good in any of these markets early as we continue to see the stock market in free fall. We are going to need to see the stock market stabilize in order to restore some confidence in the marketplace (i.e. futures, beef, and cash cattle). Look for $1-$2 lower across the board on all classes of cash cattle early this week, and we will see if we can’t stabilize the market late in the week.
Cash Beef Situation and Outlook:
Last weeks cattle kill was estimated at 630,000 head and produced an estimated 495.4 mil lbs of beef. The weekly cattle slaughter was 29,000 head below the previous week and 41,000 head below the same week a year ago. The boxed beef market was $1.73 lower on the choice cutout and $2.85 lower on the select cutout through Thursday on moderate volume of 979 loads of fabricated beef cuts sold. Friday saw further losses in the beef complex with the choice cutout closing $1.27 lower to settle at $152.42 and the select cutout closing $.51 lower to settle at $146.59. Sales volume on Friday was light with 221 loads of beef sold (86.25 loads of choice fab cuts, 70.63 loads of select fab cuts, 15.09 loads of trim, and 48.67 loads of grinds). The choice/select spread settled at $5.82 a loss of $.76.
The beef market has fallen sharply in the last several trading session on a general lack of demand linked slowing demand domestically and internationally because of the economic meltdown. No one wants to step into the market unless it is on an as-need basis, because no one knows how bad the economic crisis is going to affect demand out forward. This has kept pressure on middle meats for the last several weeks, however that uncertainty has now filtered into the end meat complex. I would look for a lower beef market early this week with the outside chance we can stabilize late in the week.
Futures Market Situation and Outlook:
On Friday, October live cattle settled at $95.60 a loss of $.10, December live cattle settled at $97.77 a loss of $.30, and the February live cattle settled at $97.70 a loss of $.10. In the feeder cattle pit, October feeder cattle settled at $100.67 a gain of $.10, November feeder cattle settled at $100.80 a gain of $.20, and the January feeder cattle settled at $100.40 a loss of $.30. The reported CME feeder cattle index for 10/2/08 was $104.94 a loss of $.68.
Friday’s live cattle volume saw 28,321 contracts trade in the pit and 14,700 contracts trade on Globex. Live cattle open interest declined 5,292 contracts to come in this morning at 240,702. Friday’s feeder cattle volume saw 3,466 contracts trade in the pit and 1,461 contracts trade on Globex. Feeder cattle open interest gained 418 contracts to come in this morning at 26,021.
Live and feeder cattle futures were under pressure all week on liquidation out of commodities linked to financial woes on Wall Street. We will see more of the same early this week as the stock market and the outside commodity markets are sharply lower again early this morning. It is hard to pick a bottom in a liquidating market, but I think at least a near term bottom is close at hand in all these markets, including the stock market, and that is going to be the most important as we will need to see some stabilization in the economy in order to restore some confidence in the commodities markets. Next major support in the live cattle will be $93.50 basis front month October live and $99.30 basis front month October feeder cattle. We are going to trade on the defensive early this week; however, hopefully we can find some stability by midweek and bounce a little higher going into the weekend. Look for a $.25-$.50 lower start to live and feeder cattle futures this morning. Trade Well!!!
Any one wanting a more detailed report on the cattle and beef markets including fundamental, chart and technical analysis, plus spec/hedge recommendations for packers, processors, producers, and meat buyers feel free to contact me by phone or e-mail to set up a free trial.
There is risk in trading futures and options.
Have a Good Day,
Troy Vetterkind
Vetterkind Cattle Brokerage, LLC
Chicago Board of Trade
141 West Jackson Blvd.
Suite 1220A
Chicago, IL 60604
1-888-299-1477 Toll Free
1-312-896-2068 Direct
1-708-224-5985 Mobile
tvetterkind@linngroup.com
Reproduction or rebroadcast of any portion of this information is strictly prohibited without the written permission of the Linn Group, Inc. the information reflected herein is derived from sources believed to be reliable; however, this information is not guaranteed as to its accuracy or completeness. Opinions expressed are subject to change without notice. This material and any view expressed herein are provided for informational purposes only and should not be construed in any way as an inducement to buy or sell commodity futures or options contracts. The Linn Group and its officers, directors, employees and affiliates may take positions for their own accounts in contracts referred to herein. Trading futures involves risk of loss. Past performance is not indicative of future results.
Good Morning from the Chicago Board of Trade,
Cash Cattle Situation and Outlook:
We left last week with a cash fed cattle market that trades mostly $94-$97 live and $1.47-$1.54 dressed, with the lower end of the trade taking place in the northern tier of cattle feeding country on moderate sales volume. There was some reported clean up trade in Nebraska of Friday at $1.45 dressed. An imploding futures market and falling beef market were catalysts for the lower trade. For the week, the feeder cattle market was $2-$6 lower, with most of the declines coming in fresh unweaned new crop calves. Concerns over the stock market and credit markets were also an influence in the lower feeder cattle trade. Slaughter cow markets were lower last week as well, as we begin to see more cows coming to town. Looking into this week I don’t see a lot of good in any of these markets early as we continue to see the stock market in free fall. We are going to need to see the stock market stabilize in order to restore some confidence in the marketplace (i.e. futures, beef, and cash cattle). Look for $1-$2 lower across the board on all classes of cash cattle early this week, and we will see if we can’t stabilize the market late in the week.
Cash Beef Situation and Outlook:
Last weeks cattle kill was estimated at 630,000 head and produced an estimated 495.4 mil lbs of beef. The weekly cattle slaughter was 29,000 head below the previous week and 41,000 head below the same week a year ago. The boxed beef market was $1.73 lower on the choice cutout and $2.85 lower on the select cutout through Thursday on moderate volume of 979 loads of fabricated beef cuts sold. Friday saw further losses in the beef complex with the choice cutout closing $1.27 lower to settle at $152.42 and the select cutout closing $.51 lower to settle at $146.59. Sales volume on Friday was light with 221 loads of beef sold (86.25 loads of choice fab cuts, 70.63 loads of select fab cuts, 15.09 loads of trim, and 48.67 loads of grinds). The choice/select spread settled at $5.82 a loss of $.76.
The beef market has fallen sharply in the last several trading session on a general lack of demand linked slowing demand domestically and internationally because of the economic meltdown. No one wants to step into the market unless it is on an as-need basis, because no one knows how bad the economic crisis is going to affect demand out forward. This has kept pressure on middle meats for the last several weeks, however that uncertainty has now filtered into the end meat complex. I would look for a lower beef market early this week with the outside chance we can stabilize late in the week.
Futures Market Situation and Outlook:
On Friday, October live cattle settled at $95.60 a loss of $.10, December live cattle settled at $97.77 a loss of $.30, and the February live cattle settled at $97.70 a loss of $.10. In the feeder cattle pit, October feeder cattle settled at $100.67 a gain of $.10, November feeder cattle settled at $100.80 a gain of $.20, and the January feeder cattle settled at $100.40 a loss of $.30. The reported CME feeder cattle index for 10/2/08 was $104.94 a loss of $.68.
Friday’s live cattle volume saw 28,321 contracts trade in the pit and 14,700 contracts trade on Globex. Live cattle open interest declined 5,292 contracts to come in this morning at 240,702. Friday’s feeder cattle volume saw 3,466 contracts trade in the pit and 1,461 contracts trade on Globex. Feeder cattle open interest gained 418 contracts to come in this morning at 26,021.
Live and feeder cattle futures were under pressure all week on liquidation out of commodities linked to financial woes on Wall Street. We will see more of the same early this week as the stock market and the outside commodity markets are sharply lower again early this morning. It is hard to pick a bottom in a liquidating market, but I think at least a near term bottom is close at hand in all these markets, including the stock market, and that is going to be the most important as we will need to see some stabilization in the economy in order to restore some confidence in the commodities markets. Next major support in the live cattle will be $93.50 basis front month October live and $99.30 basis front month October feeder cattle. We are going to trade on the defensive early this week; however, hopefully we can find some stability by midweek and bounce a little higher going into the weekend. Look for a $.25-$.50 lower start to live and feeder cattle futures this morning. Trade Well!!!
Any one wanting a more detailed report on the cattle and beef markets including fundamental, chart and technical analysis, plus spec/hedge recommendations for packers, processors, producers, and meat buyers feel free to contact me by phone or e-mail to set up a free trial.
There is risk in trading futures and options.
Have a Good Day,
Troy Vetterkind
Vetterkind Cattle Brokerage, LLC
Chicago Board of Trade
141 West Jackson Blvd.
Suite 1220A
Chicago, IL 60604
1-888-299-1477 Toll Free
1-312-896-2068 Direct
1-708-224-5985 Mobile
tvetterkind@linngroup.com
Reproduction or rebroadcast of any portion of this information is strictly prohibited without the written permission of the Linn Group, Inc. the information reflected herein is derived from sources believed to be reliable; however, this information is not guaranteed as to its accuracy or completeness. Opinions expressed are subject to change without notice. This material and any view expressed herein are provided for informational purposes only and should not be construed in any way as an inducement to buy or sell commodity futures or options contracts. The Linn Group and its officers, directors, employees and affiliates may take positions for their own accounts in contracts referred to herein. Trading futures involves risk of loss. Past performance is not indicative of future results.
Thursday, October 2, 2008
October 2, 2008
Good Morning from the Chicago Board of Trade,
Cash Cattle Situation and Outlook:
We saw some light fed cattle trading begin to develop on the southern plains yesterday morning with early prices trending about a dollar lower when compared to last week. There were a couple thousand head of cattle reportedly sold in Texas for $98 live with some cattle changing hands in Kansas at the same money. There was also a couple thousand head of cattle reportedly sold in the eastern Nebraska/western Iowa dressed market for $1.48-$1.49. Most other feedyards were resisting the lower packer bids in hopes of a rally on the futures board in the coming days in an attempt to get higher money. The board did rally back from early morning lows yesterday once word of the Texas cattle trades started filtering in, however I don’t know if it was enough of a rally to stave off a lower fed cattle trade in the north for the rest of the week. I will continue to look for a mostly $97-$98 live and $1.48-$1.49 dressed market for the rest of this week. As we get past the midweek point, fed cattle, feeder cattle, and slaughter cows selling through the nations auction markets are all trading $1-$2 lower.
Cash Beef Situation and Outlook:
Yesterdays kill was estimated at 125,000 head, which would be 3,000 head below last week and 1,000 head below the same day a year ago. The week-to-date kill now stands at 376,000 head, which would be 5,000 head below the same period a week ago with the industry looking for a 640,000 head production week. The boxed beef market was lower yesterday with the choice cutout closing $.40 lower to settle at $155.00 and the select cutout closing $.70 lower to settle at $147.76. Sales volume was light with 296 loads of beef sold (72.27 loads of choice fab cuts, 121.30 loads of select fab cuts, 30.34 loads of trim, 71.67 loads of grinds). The choice/select spread settled at $7.24 a gain of $.30.
The beef market was lower yesterday on active discounting on cuts throughout the all the major primal areas of the carcass. Once again we find the biggest culprit to cutout losses in the middle section of the animal, where sharp discounts were surfacing on choice and select rib roasts, ribeye’s, and strip loins. Demand for these higher end cuts is rated as dismal due to retail accounts having more margin on chuck, round, and ground product. It is thought that with the purging of product the last several trading sessions and packers talking about cutting production hours towards the end of the week, that this will go a long way in helping to stabilize cutout values going into next week. Coarse ground beef was also under a moderate degree of pressure yesterday and this along with more boneless beef available kept 90% and 50% boneless values under pressure. We will look for beef values to stabilize for a moment and begin a more sideways to higher pattern into the first part of next week. Beef exports for the week of September 19-25, 2008 are as follows:
Beef: Net sales of 8,800 MT were primarily for South Korea (2,800 MT), Mexico (2,200 MT), Vietnam (1,500 MT), Japan (1,000 MT), and Canada (1,000 MT). Exports of 12,400 MT were mainly to Mexico (4,400 MT), South Korea (3,600 MT), Canada (1,500 MT), Japan (1,000 MT), Vietnam (800 MT), Russia (500 MT), and Taiwan (300 MT).
Futures Market Situation and Outlook:
October live cattle settled at $98.57 a loss of $.32, December live cattle settled at $100.47 a gain of $.10, and the February live cattle settled at $100.62 a loss of $.10. In the feeder cattle pit, October feeder cattle settled at $103.55 a loss of $.45, November feeder cattle settled at $103.60 a loss of $.12, and the January feeder cattle settled at $103.70 a gain of $.05. The reported CME feeder cattle index for 9/30/08 was $106.17 a loss of $.02.
Yesterday’s live cattle volume saw 24,723 contracts trade in the pit and 10,498 contracts trade on Globex. Live cattle open interest declined 2,185 contracts to come in this morning at 244,064. Yesterday’s feeder cattle volume saw 3,652 contracts trade in the pit and 1,143 trade on Globex. Feeder cattle open interest declined 457 contracts to come in this morning at 25,856.
Fat and feeder cattle futures settled mixed yesterday but well off the early morning lows. Short covering and hedge lifting were one of the bigger catalysts for the rally going into the close. We keep making new lows in the feeder cattle but come back dramatically from those lows by the end of the day or the next day. I think we are getting close to putting in a low for awhile in the feeder cattle, and as long as the stock market doesn’t fall out of bed again, $100 on the futures might be able to hold the feeders. I think we need to close November feeders back above $104 in order to confirm a near term low could be in. Fat cattle futures are going to be choppy until we can see some strength come back into the cash cattle and boxed beef markets. October fats should be able to hold $97.50 for the rest of this week, and keeping December above $100 looks positive. However, we really need to get December live cattle back above $101 on a closing basis to get some technical buying back into the market. Look for a $.10-$.20 lower open to live and feeder cattle futures this morning. Trade Well!!!
Any one wanting a more detailed report on the cattle and beef markets including fundamental, chart and technical analysis, plus spec/hedge recommendations for packers, processors, producers, and meat buyers feel free to contact me by phone or e-mail to set up a free trial.
There is risk in trading futures and options.
Have a Good Day,
Troy Vetterkind
Vetterkind Cattle Brokerage, LLC
Chicago Board of Trade
141 West Jackson Blvd.
Suite 1220A
Chicago, IL 60604
1-888-299-1477 Toll Free
1-312-896-2068 Direct
1-708-224-5985 Mobile
tvetterkind@linngroup.com
Reproduction or rebroadcast of any portion of this information is strictly prohibited without the written permission of the Linn Group, Inc. the information reflected herein is derived from sources believed to be reliable; however, this information is not guaranteed as to its accuracy or completeness. Opinions expressed are subject to change without notice. This material and any view expressed herein are provided for informational purposes only and should not be construed in any way as an inducement to buy or sell commodity futures or options contracts. The Linn Group and its officers, directors, employees and affiliates may take positions for their own accounts in contracts referred to herein. Trading futures involves risk of loss. Past performance is not indicative of future results.
Good Morning from the Chicago Board of Trade,
Cash Cattle Situation and Outlook:
We saw some light fed cattle trading begin to develop on the southern plains yesterday morning with early prices trending about a dollar lower when compared to last week. There were a couple thousand head of cattle reportedly sold in Texas for $98 live with some cattle changing hands in Kansas at the same money. There was also a couple thousand head of cattle reportedly sold in the eastern Nebraska/western Iowa dressed market for $1.48-$1.49. Most other feedyards were resisting the lower packer bids in hopes of a rally on the futures board in the coming days in an attempt to get higher money. The board did rally back from early morning lows yesterday once word of the Texas cattle trades started filtering in, however I don’t know if it was enough of a rally to stave off a lower fed cattle trade in the north for the rest of the week. I will continue to look for a mostly $97-$98 live and $1.48-$1.49 dressed market for the rest of this week. As we get past the midweek point, fed cattle, feeder cattle, and slaughter cows selling through the nations auction markets are all trading $1-$2 lower.
Cash Beef Situation and Outlook:
Yesterdays kill was estimated at 125,000 head, which would be 3,000 head below last week and 1,000 head below the same day a year ago. The week-to-date kill now stands at 376,000 head, which would be 5,000 head below the same period a week ago with the industry looking for a 640,000 head production week. The boxed beef market was lower yesterday with the choice cutout closing $.40 lower to settle at $155.00 and the select cutout closing $.70 lower to settle at $147.76. Sales volume was light with 296 loads of beef sold (72.27 loads of choice fab cuts, 121.30 loads of select fab cuts, 30.34 loads of trim, 71.67 loads of grinds). The choice/select spread settled at $7.24 a gain of $.30.
The beef market was lower yesterday on active discounting on cuts throughout the all the major primal areas of the carcass. Once again we find the biggest culprit to cutout losses in the middle section of the animal, where sharp discounts were surfacing on choice and select rib roasts, ribeye’s, and strip loins. Demand for these higher end cuts is rated as dismal due to retail accounts having more margin on chuck, round, and ground product. It is thought that with the purging of product the last several trading sessions and packers talking about cutting production hours towards the end of the week, that this will go a long way in helping to stabilize cutout values going into next week. Coarse ground beef was also under a moderate degree of pressure yesterday and this along with more boneless beef available kept 90% and 50% boneless values under pressure. We will look for beef values to stabilize for a moment and begin a more sideways to higher pattern into the first part of next week. Beef exports for the week of September 19-25, 2008 are as follows:
Beef: Net sales of 8,800 MT were primarily for South Korea (2,800 MT), Mexico (2,200 MT), Vietnam (1,500 MT), Japan (1,000 MT), and Canada (1,000 MT). Exports of 12,400 MT were mainly to Mexico (4,400 MT), South Korea (3,600 MT), Canada (1,500 MT), Japan (1,000 MT), Vietnam (800 MT), Russia (500 MT), and Taiwan (300 MT).
Futures Market Situation and Outlook:
October live cattle settled at $98.57 a loss of $.32, December live cattle settled at $100.47 a gain of $.10, and the February live cattle settled at $100.62 a loss of $.10. In the feeder cattle pit, October feeder cattle settled at $103.55 a loss of $.45, November feeder cattle settled at $103.60 a loss of $.12, and the January feeder cattle settled at $103.70 a gain of $.05. The reported CME feeder cattle index for 9/30/08 was $106.17 a loss of $.02.
Yesterday’s live cattle volume saw 24,723 contracts trade in the pit and 10,498 contracts trade on Globex. Live cattle open interest declined 2,185 contracts to come in this morning at 244,064. Yesterday’s feeder cattle volume saw 3,652 contracts trade in the pit and 1,143 trade on Globex. Feeder cattle open interest declined 457 contracts to come in this morning at 25,856.
Fat and feeder cattle futures settled mixed yesterday but well off the early morning lows. Short covering and hedge lifting were one of the bigger catalysts for the rally going into the close. We keep making new lows in the feeder cattle but come back dramatically from those lows by the end of the day or the next day. I think we are getting close to putting in a low for awhile in the feeder cattle, and as long as the stock market doesn’t fall out of bed again, $100 on the futures might be able to hold the feeders. I think we need to close November feeders back above $104 in order to confirm a near term low could be in. Fat cattle futures are going to be choppy until we can see some strength come back into the cash cattle and boxed beef markets. October fats should be able to hold $97.50 for the rest of this week, and keeping December above $100 looks positive. However, we really need to get December live cattle back above $101 on a closing basis to get some technical buying back into the market. 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.
Wednesday, October 1, 2008
October 1, 2008
Good Morning from the Chicago Board of Trade,
Cash Cattle Situation and Outlook:
The cash cattle market was untested yesterday as packer bids of $96-$97 live go unmatched against feedlot offering prices of $100-$102/$1.62. There were a few hundred head of fed cattle reported sold in Nebraska yesterday for $1.52 dressed, which would be steady with last week, however numbers were too light to establish a market trend. Another late week trade is expected at prices I believe to be steady to $1-$2 lower than last week. It’s not to say we can’t sell cattle fully steady with last week, however if beef packers hold true with what they say about cutting kills like they did last week in order to support sagging margins and with a larger fed cattle offering in the south, they may be able to have their way with the market this week. There are still issues with some bigger cattle in the northern feeding sections of the country as evident by an increase of YG 4 cattle being killed in Nebraska and Iowa, and it would be nice to see a lower market this week to get these cattle cleaned up. At that point I think numbers would get pretty manageable again, which would put more bargaining power in the hands of the cattle feeder when it comes to price negotiations. The beef still acts a little sluggish as we enter midweek, however I would expect that to turn around by late week and into the first part of next. It will be important to see some life come back into the beef market with in the next couple of weeks in order to stave off further losses in the cash cattle market. Coming into midweek we continue to see a mostly steady trend to the fed cattle selling through the Midwest auction market’s with tops noted around $92-$94 on the beef fats and $82-$86 on the Holstein’s. Keep in mind though, the sale barn cattle have been running $4-$5 cwt in back of the cash feedlot trade for several weeks. Slaughter cows are running mostly $1-$2 lower this week with the bulk of the lean cows bringing $48-$57 and the fat cows bringing $58-$67. Feeder cattle markets are off a couple of dollars pretty much wherever you look as well as the seasonal fall run of yearling’s and calves begins to increase. Phillip, SD had a big sale yesterday, with a big run of yearling cattle weighing over 800 lbs. Most of the 800 lbs-1,000 lbs steers were bringing $94-$103, the 600 lbs-800 lbs steers were bringing $100-$114, and the 400 lbs-600 lbs steers were bringing $105-$123. We will begin to see a shift in marketing’s as the yearling run of big cattle starts to slow down and we see more calves show up in the marketing mix. This will help to stabilize the yearling market, so long as the deferred month live cattle futures can find some support, as those cattle will still have good demand and numbers become shorter. The northern plains and intermountain west calf market will come under increasing pressure as numbers coming to market will increase from now until the end of November. However, the southern plains and southeast calf markets should find some support going forward as wheat prospects look fairly decent on the southern plains and buyer demand for calves to place on wheat increases.
Cash Beef Situation and Outlook:
Yesterday’s cattle slaughter was estimated at 126,000 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 stands at 251,000 head, which would be 2,000 head below the same period a week ago with the industry expecting a 640,000 head production week. The boxed beef market was mostly lower yesterday with the choice boxed beef down $.11 to settle at $155.40 and the select-boxed beef down $1.14 to settle at $148.46. Sales volume was light with 298 loads of beef sold (88.79 loads of choice fab cuts, 106.99 loads of select fab cuts, 48.53 loads of trim, 53.76 loads of grinds). The choice/select spread settled at $6.94 a gain of $1.03.
The beef market was lower yesterday, as buyers remain reluctant to take on extra inventory of product given all the press about the crisis in the financial system. Yesterday saw packers tweaking and managing inventory positions by offering discounts in areas of the carcass such as the round and loin. Choice and select knuckle’s, inside rounds, strip loins, and PSMO’s were all in need of some sort of discounting yesterday. Choice and select chuck rolls and clods were in good shape and higher prices were noted there. Coarse ground beef prices came under pressure yesterday and this helped to break the boneless beef and imported beef markets. Also, with the increase in the U.S. dollar the last couple of weeks, this has likely given incentive’s for more foreign grinding beef to come into the U.S., however, e-coli spec’s and MCOOL keep’s a flood of imported beef at bay. There still remains a reluctance to procure large amounts of rib and loin meat and this will keep rallies in the beef cutout values in check. Demand for middle meats remains stable and this will keep the market from falling out of bed. I would look for a sideways trend to the beef market for the balance of the week.
Futures Market Situation and Outlook:
October live cattle settled at $98.90 a gain of $.85, December live cattle settled at $100.37 a gain of $.50, and the February live cattle settled at $100.72 a gain of $.62. In the feeder cattle pit, October feeder cattle settled at $104.00 a gain of $1.20, November feeder cattle settled at $103.72 a gain of $1.15, and the January feeder cattle settled at $103.65 a gain of $.85. The reported CME feeder cattle index for 9/29/08 was $106.19 a loss of $.57.
Yesterdays live cattle volume saw 21,675 contracts trade in the pit and 11,631 contracts trade on Globex. Live cattle open interest declined 1,684 contracts to come in this morning at 246,257. Yesterday’s feeder cattle volume saw 3,190 contracts trade in the pit and 1,821 contracts trade on Globex. Feeder cattle open interest gained 296 contracts to come in this morning at 26,313.
Live and feeder cattle futures settled higher yesterday on short covering and ideas Monday’s limit down move was overdone. Feeder cattle saw a pretty good round of short covering early yesterday morning, which ran the market $2 higher at one point during midsession, however once that buying dried up the market did settle back off its highs going into the close. Live cattle also managed to come back a dollar off their highs, but still managed to settle in positive territory. The market today will be choppy and two-sided as traders await further news on this weeks cash fed cattle trade and results from the government bail out plan. We had a nice rebound in the stock market yesterday, however Dow futures are about 100 points lower coming into this morning as of this writing. We have a lower fed cattle trade priced into the futures coming into this morning, however the cattle futures market will remain on pins and needles given all the turmoil in the outside markets. For the rest of this week, October live cattle will need to hold support between $97.50-$98, with the market looking positive on a close back above $100. December live cattle will need to hold support at $100 to stave off a move down to $98. Both October and November will need to hold Monday’s lows of $102.80 and $102.57 respectively. Below that next support would be $100, and below that long term support would come into play at $96-$97. Can’t rule out another big break in the futures market should more political wrangling delay some sort of resolution to the credit situation. Still though, believe that the best way to play the short side of the market on hedges is via put options or short futures and long calls. If selling cash cattle on a lower market down at these levels, would reown them with call options. Look for a mixed open, $.10 higher to $.10 lower in cattle futures this morning. Trade Well!!!
Any one wanting a more detailed report on the cattle and beef markets including fundamental, chart and technical analysis, plus spec/hedge recommendations for packers, processors, producers, and meat buyers feel free to contact me by phone or e-mail to set up a free trial.
There is risk in trading futures and options.
Have a Good Day,
Troy Vetterkind
Vetterkind Cattle Brokerage, LLC
Chicago Board of Trade
141 West Jackson Blvd.
Suite 1220A
Chicago, IL 60604
1-888-299-1477 Toll Free
1-312-896-2068 Direct
1-708-224-5985 Mobile
tvetterkind@linngroup.com
Reproduction or rebroadcast of any portion of this information is strictly prohibited without the written permission of the Linn Group, Inc. the information reflected herein is derived from sources believed to be reliable; however, this information is not guaranteed as to its accuracy or completeness. Opinions expressed are subject to change without notice. This material and any view expressed herein are provided for informational purposes only and should not be construed in any way as an inducement to buy or sell commodity futures or options contracts. The Linn Group and its officers, directors, employees and affiliates may take positions for their own accounts in contracts referred to herein. Trading futures involves risk of loss. Past performance is not indicative of future results.
Good Morning from the Chicago Board of Trade,
Cash Cattle Situation and Outlook:
The cash cattle market was untested yesterday as packer bids of $96-$97 live go unmatched against feedlot offering prices of $100-$102/$1.62. There were a few hundred head of fed cattle reported sold in Nebraska yesterday for $1.52 dressed, which would be steady with last week, however numbers were too light to establish a market trend. Another late week trade is expected at prices I believe to be steady to $1-$2 lower than last week. It’s not to say we can’t sell cattle fully steady with last week, however if beef packers hold true with what they say about cutting kills like they did last week in order to support sagging margins and with a larger fed cattle offering in the south, they may be able to have their way with the market this week. There are still issues with some bigger cattle in the northern feeding sections of the country as evident by an increase of YG 4 cattle being killed in Nebraska and Iowa, and it would be nice to see a lower market this week to get these cattle cleaned up. At that point I think numbers would get pretty manageable again, which would put more bargaining power in the hands of the cattle feeder when it comes to price negotiations. The beef still acts a little sluggish as we enter midweek, however I would expect that to turn around by late week and into the first part of next. It will be important to see some life come back into the beef market with in the next couple of weeks in order to stave off further losses in the cash cattle market. Coming into midweek we continue to see a mostly steady trend to the fed cattle selling through the Midwest auction market’s with tops noted around $92-$94 on the beef fats and $82-$86 on the Holstein’s. Keep in mind though, the sale barn cattle have been running $4-$5 cwt in back of the cash feedlot trade for several weeks. Slaughter cows are running mostly $1-$2 lower this week with the bulk of the lean cows bringing $48-$57 and the fat cows bringing $58-$67. Feeder cattle markets are off a couple of dollars pretty much wherever you look as well as the seasonal fall run of yearling’s and calves begins to increase. Phillip, SD had a big sale yesterday, with a big run of yearling cattle weighing over 800 lbs. Most of the 800 lbs-1,000 lbs steers were bringing $94-$103, the 600 lbs-800 lbs steers were bringing $100-$114, and the 400 lbs-600 lbs steers were bringing $105-$123. We will begin to see a shift in marketing’s as the yearling run of big cattle starts to slow down and we see more calves show up in the marketing mix. This will help to stabilize the yearling market, so long as the deferred month live cattle futures can find some support, as those cattle will still have good demand and numbers become shorter. The northern plains and intermountain west calf market will come under increasing pressure as numbers coming to market will increase from now until the end of November. However, the southern plains and southeast calf markets should find some support going forward as wheat prospects look fairly decent on the southern plains and buyer demand for calves to place on wheat increases.
Cash Beef Situation and Outlook:
Yesterday’s cattle slaughter was estimated at 126,000 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 stands at 251,000 head, which would be 2,000 head below the same period a week ago with the industry expecting a 640,000 head production week. The boxed beef market was mostly lower yesterday with the choice boxed beef down $.11 to settle at $155.40 and the select-boxed beef down $1.14 to settle at $148.46. Sales volume was light with 298 loads of beef sold (88.79 loads of choice fab cuts, 106.99 loads of select fab cuts, 48.53 loads of trim, 53.76 loads of grinds). The choice/select spread settled at $6.94 a gain of $1.03.
The beef market was lower yesterday, as buyers remain reluctant to take on extra inventory of product given all the press about the crisis in the financial system. Yesterday saw packers tweaking and managing inventory positions by offering discounts in areas of the carcass such as the round and loin. Choice and select knuckle’s, inside rounds, strip loins, and PSMO’s were all in need of some sort of discounting yesterday. Choice and select chuck rolls and clods were in good shape and higher prices were noted there. Coarse ground beef prices came under pressure yesterday and this helped to break the boneless beef and imported beef markets. Also, with the increase in the U.S. dollar the last couple of weeks, this has likely given incentive’s for more foreign grinding beef to come into the U.S., however, e-coli spec’s and MCOOL keep’s a flood of imported beef at bay. There still remains a reluctance to procure large amounts of rib and loin meat and this will keep rallies in the beef cutout values in check. Demand for middle meats remains stable and this will keep the market from falling out of bed. I would look for a sideways trend to the beef market for the balance of the week.
Futures Market Situation and Outlook:
October live cattle settled at $98.90 a gain of $.85, December live cattle settled at $100.37 a gain of $.50, and the February live cattle settled at $100.72 a gain of $.62. In the feeder cattle pit, October feeder cattle settled at $104.00 a gain of $1.20, November feeder cattle settled at $103.72 a gain of $1.15, and the January feeder cattle settled at $103.65 a gain of $.85. The reported CME feeder cattle index for 9/29/08 was $106.19 a loss of $.57.
Yesterdays live cattle volume saw 21,675 contracts trade in the pit and 11,631 contracts trade on Globex. Live cattle open interest declined 1,684 contracts to come in this morning at 246,257. Yesterday’s feeder cattle volume saw 3,190 contracts trade in the pit and 1,821 contracts trade on Globex. Feeder cattle open interest gained 296 contracts to come in this morning at 26,313.
Live and feeder cattle futures settled higher yesterday on short covering and ideas Monday’s limit down move was overdone. Feeder cattle saw a pretty good round of short covering early yesterday morning, which ran the market $2 higher at one point during midsession, however once that buying dried up the market did settle back off its highs going into the close. Live cattle also managed to come back a dollar off their highs, but still managed to settle in positive territory. The market today will be choppy and two-sided as traders await further news on this weeks cash fed cattle trade and results from the government bail out plan. We had a nice rebound in the stock market yesterday, however Dow futures are about 100 points lower coming into this morning as of this writing. We have a lower fed cattle trade priced into the futures coming into this morning, however the cattle futures market will remain on pins and needles given all the turmoil in the outside markets. For the rest of this week, October live cattle will need to hold support between $97.50-$98, with the market looking positive on a close back above $100. December live cattle will need to hold support at $100 to stave off a move down to $98. Both October and November will need to hold Monday’s lows of $102.80 and $102.57 respectively. Below that next support would be $100, and below that long term support would come into play at $96-$97. Can’t rule out another big break in the futures market should more political wrangling delay some sort of resolution to the credit situation. Still though, believe that the best way to play the short side of the market on hedges is via put options or short futures and long calls. If selling cash cattle on a lower market down at these levels, would reown them with call options. Look for a mixed open, $.10 higher to $.10 lower in cattle futures this morning. Trade Well!!!
Any one wanting a more detailed report on the cattle and beef markets including fundamental, chart and technical analysis, plus spec/hedge recommendations for packers, processors, producers, and meat buyers feel free to contact me by phone or e-mail to set up a free trial.
There is risk in trading futures and options.
Have a Good Day,
Troy Vetterkind
Vetterkind Cattle Brokerage, LLC
Chicago Board of Trade
141 West Jackson Blvd.
Suite 1220A
Chicago, IL 60604
1-888-299-1477 Toll Free
1-312-896-2068 Direct
1-708-224-5985 Mobile
tvetterkind@linngroup.com
Reproduction or rebroadcast of any portion of this information is strictly prohibited without the written permission of the Linn Group, Inc. the information reflected herein is derived from sources believed to be reliable; however, this information is not guaranteed as to its accuracy or completeness. Opinions expressed are subject to change without notice. This material and any view expressed herein are provided for informational purposes only and should not be construed in any way as an inducement to buy or sell commodity futures or options contracts. The Linn Group and its officers, directors, employees and affiliates may take positions for their own accounts in contracts referred to herein. Trading futures involves risk of loss. Past performance is not indicative of future results.
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