January 12, 2009
Good Morning from the Chicago Board of Trade,
Cash Cattle Situation and Outlook:
We left last week with a fed cattle market that trades mostly $3-$5 lower with the bulk of business being done on Thursday. Texas feedlots reported selling 31,614 head of fed cattle for $84, Kansas yards sold 25,603 head of fed cattle for $84 live and $131.50 dressed, Nebraska feedlots sold 48,583 head of fed cattle for $83 live and $1.33-$1.35 dressed, Colorado feedlots sold 6,324 head of fed cattle for $83 live and $1.33 dressed, and Iowa feedlots sold 18,399 head of fed cattle for $83 live and $1.33-$1.35 dressed. Friday saw some light cleanup trade of 2,500-5,000 head apiece in Kansas, Nebraska, Iowa, and Colorado at prices steady with Thursday. Lower futures prices linked to fund liquidation and spec/technical selling forced cattle feeders to accept lower money for their live inventory last week. Compared to a couple weeks ago, feeder cattle markets were $4-$10 higher as we saw our first true test of the market since the holiday’s. Cattle feeders came back from the holiday break and actively pursued cattle to fill empty pens and fill what many perceive to be a marketing hole of fed cattle by late April/May. Last weeks slaughter cow market was mixed, $1 higher to $1 lower depending on what part of the country you were in. Looking into this week, we will have to see if the futures board can stabilize to keep the fed cattle market from moving any lower. Packers say they came out of last week with beef inventories that are very manageable after offering deep discounts on items that wouldn’t move and eventually getting said items sold. There will likely be more cattle offered for sale again this week in the north, however the weather in that part of the country isn’t going to be very good. The fed cattle market will likely trade on the defensive early with the possibility of prices firming late. The big feeding companies were very aggressive in feeder cattle procurement last week and I would expect to see more of the same this week. Slaughter cows should find some support this week, as winter weather in the northern plains will hamper livestock movement.
Cash Beef Situation and Outlook:
Last weeks cattle slaughter was estimated at 601,000 head, which included a Friday kill of 114,000 head and a Saturday kill of 9,000 head. The weekly slaughter was 90,000 head above the previous week and 33,000 head below the same week a year ago and produced an estimated 470-mil lbs of beef. Year-to-date beef production is running 27% below last year at 597 mil lbs with ytd cattle slaughter running 28% below last year at 764,000 head. From Friday to Thursday of last week choice boxed beef gained $.56 to settle at $143.75 and select boxed beef gained $1.26 to settle at $136.76 on increased movement of 1,181 loads of fabricated cuts sold. Friday saw further gains in the beef market with the choice cutout closing $1.73 higher to settle at $145.48 and the select cutout closing $.99 higher to settle at $137.75. Sales volume on Friday was light with 223 loads of beef sold (77.34 loads of choice fab cuts, 74.75 loads of select fab cuts, 33.43 loads of trim, 37.79 loads of grinds). The choice/select spread settled at $7.73 a gain of $.74 for the day and $.04 for the week.
Packers came into last week with push lists consisting of ribeyes, short loins, and peeled tenderloins that they needed to move. By Wednesday they had offered deep price reductions on said items and by Friday had most of the burdensome inventory cleared. End meats moved very well all of last week on good demand from retail and wholesale buyers along with grinders. Ground beef demand is very strong right now, and as a result we saw higher prices and very good movement all last week in the coarse ground market, so much so that grinders were buying two-piece and boneless chucks to put into the grind to suffice demand. The increased demand from the grinding sector also supported 90% cow beef and 50% fed cattle trim values. There was also said to be some light export demand supporting chuck roll and short rib values. I would look for a mostly steady beef market early this week as manageable inventories of beef to sell and reduced production schedules last week has packers optimistic towards the beef market coming into this week. There is talk that there will be active steak features going into Valentines Day, which along with sharply lower price levels on ribeyes, strip loins, and short loins the last several weeks, was thought to be price supportive.
Futures Market Situation and Outlook:
For the week, February live cattle lost $4.00 to settle at $83.10, April live cattle lost $3.93 to settle at $86.82, and the June live cattle lost $2.30 to settle at $85.70. In the feeder cattle pit for the week, January feeder cattle lost $1.50 to settle at $94.10, March feeder cattle lost $2.85 to settle at $92.67, and the April feeder cattle lost $2.15 to settle at $94.00. The reported CME feeder cattle index for 1/8/09 was $96.52 a gain of $.09 for the day and $3.60 for the week. For the week in live cattle spreads: Feb/April lost $.07 to settle at -$3.72, April/June lost $1.63 to settle at $1.12, and June/August lost $1.15 to settle at -$1.00. For the week in feeder cattle spreads: Jan/March gained $1.35 to settle at $1.42, March/April lost $.67 to settle at -$1.32, and April/May gained $.10 to settle at -$1.60.
Fridays live cattle volume saw 37,939 contracts trade in the pit and 16,227 contracts trade on Globex. Live cattle open interest declined 1,695 contracts to come in this morning at 208,318. Friday’s feeder cattle volume saw 2,075 contracts trade in the pit and 567 contracts trade on Globex. Feeder cattle open interest declined 1 contract to come in this morning at 20,591. For the week live cattle open interest declined 7,232 and feeder cattle open interest declined 31.
The latest commitment of traders report for business through last Tuesday showed in live cattle that small funds were net short 10,482 a decline of 4,466 shorts. Commercial traders were net short 68,555 contracts of live cattle a gain of 7,211 shorts. Index fund traders were net long 100,332 contracts of live cattle a gain of 1,705 contracts. Small spec traders were net short 21,125 contracts of live cattle a decline of 1,039 contracts. In the feeder cattle, small funds were net short 2,655 a decline of 199 shorts. Commercial traders were net long 421 contracts of feeder cattle a decline of 471 shorts. Index fund traders were net long 6,467 contracts of feeder cattle a decline of 324 longs. Small spec traders were net short 4,233 contracts of feeder cattle a decline of 596 shorts.
Last weeks futures market was plagued by long profit taking after the recent rally in prices, technical selling, and index fund liquidation. This forced cash fed cattle prices lower on the week and we will need to see some stability in the futures by midweek this week in order to stave off further losses in the cash market. The USDA released final production and carryout numbers for grains this morning and the numbers look pretty bearish for corn, beans, and wheat as quarterly grain stocks and 08/09 carryout projections were all well above pre-report estimates. On the meat numbers, USDA lowered 08 beef production 30 mil lbs and left 09 production numbers alone at 26.642 bil lbs. The USDA also raised 08 beef imports 30 mil lbs and raised 09 imports 85 mil lbs on strength in the U.S. dollar. The USDA raised 08 exports 15 mil lbs to 1.875 bil and left 09 exports alone at 1.920 bil. 2009 Pork production was lowered 90 mil lbs and 09 poultry production was lowered 198 mil lbs reflecting recent liquidation in those markets. The USDA numbers paint some optimism towards meat markets for 2009, so long as we can see some recovery in U.S. and world economies. This morning, outside commodity markets are all lower and they are calling corn and wheat down $.10-$.15 and beans down $.20-$.25 on the open. This likely won’t bode well for live and feeder cattle futures on the open either and I would look for cattle to be lower on the open and most of the day today in sympathy with other commodity markets. First weekly support for Feb live cattle will be found at $81, April live at $85, and March feeders at $90.50. Feeder cattle should find the most support this week as there remains good support for cash feeders in the country. Live cattle futures will likely be under pressure early this week as the market prices a lower fed cattle trade for this week and waits to see how early week beef demand plays out. Look for a $.10-$.30 lower open to live and feeder cattle futures this morning. Trade Well!!!
Any one wanting a more detailed report on the cattle and beef markets including fundamental, chart and technical analysis, plus spec/hedge recommendations for packers, processors, producers, and meat buyers feel free to contact me by phone or e-mail to set up a free trial.
There is risk in trading futures and options.
Have a Good Day,
Troy Vetterkind
Vetterkind Cattle Brokerage, LLC
Chicago Board of Trade
141 West Jackson Blvd.
Suite 1220A
Chicago, IL 60604
1-888-299-1477 Toll Free
1-312-896-2068 Direct
1-708-224-5985 Mobile
tvetterkind@linngroup.com
Reproduction or rebroadcast of any portion of this information is strictly prohibited without the written permission of the Linn Group, Inc. the information reflected herein is derived from sources believed to be reliable; however, this information is not guaranteed as to its accuracy or completeness. Opinions expressed are subject to change without notice. This material and any view expressed herein are provided for informational purposes only and should not be construed in any way as an inducement to buy or sell commodity futures or options contracts. The Linn Group and its officers, directors, employees and affiliates may take positions for their own accounts in contracts referred to herein. Trading futures involves risk of loss. Past performance is not indicative of future results.
Monday, January 12, 2009
Friday, January 9, 2009
January 9, 2009
Good Morning from the Chicago Board of Trade,
Cash Cattle Situation and Outlook:
Yesterdays cash fed cattle market turned fairly active with live sales running $2-$3 lower and dressed sales running mostly $4 lower when compared to the previous week. Cattle sold in Texas for mostly $84-$85 on about 4,000 head, Kansas feedlots sold approximately 12,000 head for $84 live, Nebraska sold approximately 20,000 head for $1.34-$1.35, Colorado feedlots sold 1,200 head for $83-$83.50 live, and Iowa feedlots sold 3,000 head of fed cattle for $1.32-$1.36 dressed. Numbers of cattle sold look to be moderate and there will certainly be some cleanup trade today, likely steady with yesterdays market depending on what the board does. Believe the drop in this weeks cash fed cattle market was a direct result of the lower futures board, and we should begin to see some of that selling in the futures subside in the next day or two as we are getting some of the open interest that has been talked about out of the market. We have brought the cash market back into $83-$84 support and would expect the market to hold together here give or take a dollar and trade sideways to higher from here. Going home for the weekend, slaughter cows carry a mixed tone, some higher and some lower depending on what part of the country you are in. Feeder cattle sales remain strong, with many sales yesterday like Pratt, KS reporting $2-$4 higher across the board on all classes of feeders with very good buyer demand. This is especially true on 7-8 weight cattle that will finish by late spring and I would expect this trend to continue into next week.
Cash Beef Situation and Outlook:
Yesterdays kill was estimated at 126,000 head, which would be 126,000 head above a week ago and 3,000 head below the same day a year ago. The week-to-date kill now stands at 478,000 head, which would be 1,000 head below the same period a week ago with the industry looking for a 620,000 head production week. The boxed beef market was $.26 higher on the choice cutout to settle at $143.75 and $.52 higher to settle at $136.76 on the select cutout. Sales volume was good with 420 loads of beef sold (127.12 loads of choice fab cuts, 169.50 loads of select fab cuts, 40.93 loads of trim, 82.14 loads of grinds). The choice/select spread settled at $6.99 a loss of $.26.
The beef market was mostly steady to higher yesterday, with the exception of choice/select rib roasts. The rest of the complex was holding its own with price strength showing up once again in two-piece chucks, chuck rolls, knuckles, and outside rounds. There was another round of higher price transactions in the ground beef market on good movement. Boneless beef markets were higher as well, again most of that strength showing up in the fed cattle 50’s. Packers did a good job of clearing backlogged inventory this week and head into the weekend with manageable inventory levels. For this reason I will continue to look for a mostly steady to higher beef market into the first part of next week.
Futures Market Situation and Outlook:
February live cattle settled at $83.15 a loss of $2.62, April live cattle settled at $86.95 a loss of $1.97, and the June live cattle settled at $85.37 a loss of $1.07. In the feeder cattle pit, January feeder cattle settled at $93.50 a loss of $1.00, March feeder cattle settled at $92.25 a loss of $1.02, and the April feeder cattle settled at $93.50 a loss of $.77. The reported CME feeder cattle index for 1/7/09 was $96.43 a gain of $.31. Live cattle spreads: Feb/April settled at -$3.80 a loss of $.65, April/June settled at $1.57 a loss of $.90, and June/August settled at -$.72 a loss of $.22. Feeder cattle spreads: Jan/March settled at $1.25 a gain of $.02, March/April settled at -$1.25 a loss of $.25, April/May settled at -$1.42 a gain of $.40.
Yesterdays live cattle volume saw 43,662 contracts trade in the pit and 20,831 contracts trade on Globex. Live cattle open interest declined 7,474 contracts to come in this morning at 210,095. Yesterday’s feeder cattle volume saw 3,257 contracts trade in the pit and 1,187 contracts trade on Globex. Feeder cattle open interest gained 524 contracts to come in this morning at 20,632.
Live and feeder cattle futures suffered another round of heavy selling yesterday linked to the beginning of the “Goldman Roll” and index fund liquidation. We have been hearing the last couple of days about how the index fund community needs to rebalance their meat position, and yesterday we saw Feb open interest go down 8,351 contracts with total live cattle open interest going down 7,474. Some of this was rolled, however it would appear that there was some sizeable outright liquidation. Since last Friday Feb live cattle open interest has gone down approximately 17,000 cars. Again, some of this was rolled into deferred month fats; however there has been a portion that was simply outright liquidated. This would lead me to believe that we could be getting close to seeing some of this selling subside. We could see another day or two of live cattle liquidation; however I think we are getting close to wrapping that up and would want to be a buyer on any further weakness. Feeders on the other hand don’t have to break that much more from where they are at, due to the index guys not having to liquidate feeders and we have very good cash strength in the country. For this reason I would look to be a buyer of feeder cattle today, and if they come in and whack the fat cattle at the end of the day again you can buy them cheaper. If not, and the market rallies, you at least have the feeders on to help offset paying up for the fat cattle. Look for a $.10-$.20 higher open to live and feeder cattle this morning. Have a Good Weekend and Trade Well!!!
Any one wanting a more detailed report on the cattle and beef markets including fundamental, chart and technical analysis, plus spec/hedge recommendations for packers, processors, producers, and meat buyers feel free to contact me by phone or e-mail to set up a free trial.
There is risk in trading futures and options.
Have a Good Day,
Troy Vetterkind
Vetterkind Cattle Brokerage, LLC
Chicago Board of Trade
141 West Jackson Blvd.
Suite 1220A
Chicago, IL 60604
1-888-299-1477 Toll Free
1-312-896-2068 Direct
1-708-224-5985 Mobile
tvetterkind@linngroup.com
Reproduction or rebroadcast of any portion of this information is strictly prohibited without the written permission of the Linn Group, Inc. the information reflected herein is derived from sources believed to be reliable; however, this information is not guaranteed as to its accuracy or completeness. Opinions expressed are subject to change without notice. This material and any view expressed herein are provided for informational purposes only and should not be construed in any way as an inducement to buy or sell commodity futures or options contracts. The Linn Group and its officers, directors, employees and affiliates may take positions for their own accounts in contracts referred to herein. Trading futures involves risk of loss. Past performance is not indicative of future results.
Good Morning from the Chicago Board of Trade,
Cash Cattle Situation and Outlook:
Yesterdays cash fed cattle market turned fairly active with live sales running $2-$3 lower and dressed sales running mostly $4 lower when compared to the previous week. Cattle sold in Texas for mostly $84-$85 on about 4,000 head, Kansas feedlots sold approximately 12,000 head for $84 live, Nebraska sold approximately 20,000 head for $1.34-$1.35, Colorado feedlots sold 1,200 head for $83-$83.50 live, and Iowa feedlots sold 3,000 head of fed cattle for $1.32-$1.36 dressed. Numbers of cattle sold look to be moderate and there will certainly be some cleanup trade today, likely steady with yesterdays market depending on what the board does. Believe the drop in this weeks cash fed cattle market was a direct result of the lower futures board, and we should begin to see some of that selling in the futures subside in the next day or two as we are getting some of the open interest that has been talked about out of the market. We have brought the cash market back into $83-$84 support and would expect the market to hold together here give or take a dollar and trade sideways to higher from here. Going home for the weekend, slaughter cows carry a mixed tone, some higher and some lower depending on what part of the country you are in. Feeder cattle sales remain strong, with many sales yesterday like Pratt, KS reporting $2-$4 higher across the board on all classes of feeders with very good buyer demand. This is especially true on 7-8 weight cattle that will finish by late spring and I would expect this trend to continue into next week.
Cash Beef Situation and Outlook:
Yesterdays kill was estimated at 126,000 head, which would be 126,000 head above a week ago and 3,000 head below the same day a year ago. The week-to-date kill now stands at 478,000 head, which would be 1,000 head below the same period a week ago with the industry looking for a 620,000 head production week. The boxed beef market was $.26 higher on the choice cutout to settle at $143.75 and $.52 higher to settle at $136.76 on the select cutout. Sales volume was good with 420 loads of beef sold (127.12 loads of choice fab cuts, 169.50 loads of select fab cuts, 40.93 loads of trim, 82.14 loads of grinds). The choice/select spread settled at $6.99 a loss of $.26.
The beef market was mostly steady to higher yesterday, with the exception of choice/select rib roasts. The rest of the complex was holding its own with price strength showing up once again in two-piece chucks, chuck rolls, knuckles, and outside rounds. There was another round of higher price transactions in the ground beef market on good movement. Boneless beef markets were higher as well, again most of that strength showing up in the fed cattle 50’s. Packers did a good job of clearing backlogged inventory this week and head into the weekend with manageable inventory levels. For this reason I will continue to look for a mostly steady to higher beef market into the first part of next week.
Futures Market Situation and Outlook:
February live cattle settled at $83.15 a loss of $2.62, April live cattle settled at $86.95 a loss of $1.97, and the June live cattle settled at $85.37 a loss of $1.07. In the feeder cattle pit, January feeder cattle settled at $93.50 a loss of $1.00, March feeder cattle settled at $92.25 a loss of $1.02, and the April feeder cattle settled at $93.50 a loss of $.77. The reported CME feeder cattle index for 1/7/09 was $96.43 a gain of $.31. Live cattle spreads: Feb/April settled at -$3.80 a loss of $.65, April/June settled at $1.57 a loss of $.90, and June/August settled at -$.72 a loss of $.22. Feeder cattle spreads: Jan/March settled at $1.25 a gain of $.02, March/April settled at -$1.25 a loss of $.25, April/May settled at -$1.42 a gain of $.40.
Yesterdays live cattle volume saw 43,662 contracts trade in the pit and 20,831 contracts trade on Globex. Live cattle open interest declined 7,474 contracts to come in this morning at 210,095. Yesterday’s feeder cattle volume saw 3,257 contracts trade in the pit and 1,187 contracts trade on Globex. Feeder cattle open interest gained 524 contracts to come in this morning at 20,632.
Live and feeder cattle futures suffered another round of heavy selling yesterday linked to the beginning of the “Goldman Roll” and index fund liquidation. We have been hearing the last couple of days about how the index fund community needs to rebalance their meat position, and yesterday we saw Feb open interest go down 8,351 contracts with total live cattle open interest going down 7,474. Some of this was rolled, however it would appear that there was some sizeable outright liquidation. Since last Friday Feb live cattle open interest has gone down approximately 17,000 cars. Again, some of this was rolled into deferred month fats; however there has been a portion that was simply outright liquidated. This would lead me to believe that we could be getting close to seeing some of this selling subside. We could see another day or two of live cattle liquidation; however I think we are getting close to wrapping that up and would want to be a buyer on any further weakness. Feeders on the other hand don’t have to break that much more from where they are at, due to the index guys not having to liquidate feeders and we have very good cash strength in the country. For this reason I would look to be a buyer of feeder cattle today, and if they come in and whack the fat cattle at the end of the day again you can buy them cheaper. If not, and the market rallies, you at least have the feeders on to help offset paying up for the fat cattle. Look for a $.10-$.20 higher open to live and feeder cattle this morning. Have a Good Weekend and Trade Well!!!
Any one wanting a more detailed report on the cattle and beef markets including fundamental, chart and technical analysis, plus spec/hedge recommendations for packers, processors, producers, and meat buyers feel free to contact me by phone or e-mail to set up a free trial.
There is risk in trading futures and options.
Have a Good Day,
Troy Vetterkind
Vetterkind Cattle Brokerage, LLC
Chicago Board of Trade
141 West Jackson Blvd.
Suite 1220A
Chicago, IL 60604
1-888-299-1477 Toll Free
1-312-896-2068 Direct
1-708-224-5985 Mobile
tvetterkind@linngroup.com
Reproduction or rebroadcast of any portion of this information is strictly prohibited without the written permission of the Linn Group, Inc. the information reflected herein is derived from sources believed to be reliable; however, this information is not guaranteed as to its accuracy or completeness. Opinions expressed are subject to change without notice. This material and any view expressed herein are provided for informational purposes only and should not be construed in any way as an inducement to buy or sell commodity futures or options contracts. The Linn Group and its officers, directors, employees and affiliates may take positions for their own accounts in contracts referred to herein. Trading futures involves risk of loss. Past performance is not indicative of future results.
Thursday, January 8, 2009
January 8, 2009
Good Morning from the Chicago Board of Trade,
Cash Cattle Situation and Outlook:
The cash fed cattle market was at a standstill again yesterday as packers continue to not be interested in bidding on cattle, although there were a few light dressed bids of $1.35-$1.36 in the northern tier of feeding states. Feeders remain priced at $89-$90 live in the south and $1.40 dressed in the north. Yesterday morning I wrote that we should be able to hold the cash market steady this week for various reasons, barring any kind of sharp sell off on the futures board. Well, we got the sharp sell off, and now it looks as though steady might be a victory for cattle feeders, with $.50-$1 lower now likely in the cards. Talk of production cutbacks came to fruition in a big way yesterday with the daily kill being estimated at 107,000 head. It appears as though some of this near term quick ship business for beef could be getting satisfied and interest going into next week is starting to wane. This type of market sentiment along with lower settlements on the futures board is likely going to be a price limiting factor for the cattle market late this week and early next. Again though, I would view this as a temporary situation as I think the fundamentals of the fed cattle market are such to support a cash fed cattle trade in the mid-upper $80’s through January and lower to mid $90’s by the end of February.
The salebarn trade of cattle continues to be higher with fat cattle in Sioux Falls, SD yesterday bringing $84-$85 on the beef steers and $70-$73 on the Holstein steers. Slaughter cows in Sioux Falls were bringing $42-$49 with a couple of big white cows bringing up to $68. Feeder cattle sales continue to turn in higher results with El Reno, OK calling their sale $4-$7 higher on continued good buyer demand, especially on bigger cattle that will finish by late spring. 500 lbs steers in El Reno yesterday were bringing $104-$116, 600 lbs steers were bringing $94-$104, 700 lbs steers were bringing $93-$98, and 800 lbs steers were bringing $88-$98.
Cash Beef Situation and Outlook:
Yesterdays kill was estimated at 107,000 head, which would be 12,000 head below last week and 13,000 head below the same day a year ago. The week-to-date kill now stands at 352,000 head, which would be 4,000 head above the same period a week ago with the industry looking for a 620,000 head production week. The boxed beef market was lower yesterday with the choice cutout closing $1.31 lower to settle at $143.49 and the select cutout closing $.01 lower to settle at $136.24. Sales volume was very good with 547 loads of beef sold (235.93 loads of choice fab cuts, 161.14 loads of select fab cuts, 40.30 loads of trim, 109.31 loads of grinds). The choice/select spread settled at $7.25 a loss of $1.30.
The beef market was mostly lower yesterday as the last several days of lower ribeye and PSMO prices were being factored into cutout values. Packers purged some backlogged inventory yesterday by offering discounts on ribeyes, short loins, top butts, and peeled tenderloins. This strategy worked as we saw very good sales volume of 547 loads of beef sold with the majority of the increased trading volume comprised of the above mentioned cuts. We also saw increased loads counts along with higher price levels on coarse ground beef. For the most part chuck and round cuts were individually trading $.02-$.05 higher yesterday as there is still retail demand for many of these items. Boneless beef items were trading higher yesterday, especially the 50% fed cattle trim, as yesterdays reduced slaughter and intentions for more of the same into the end of the week had the processing sector of the market scrambling to get some product around them. Talk of further slaughter reductions into early next week should be a supporting factor to cutout values by early next week. Good support should be found on choice cutout values at $1.40 and select cutout values at $1.34-$1.35, give or take a couple of dollars. Beef exports for the week of December 26, 2008-January 1, 2009 are as follows:
Beef: Net sales reductions of 1,000 MT reported for 2009 marketing year (which began Jan 1.) were mainly for Mexico (400 MT), Taiwan (100 MT), and Peru (100 MT). A total of 16,600 MT were outstanding on Dec. 31 and carried over to the 2009 marketing year. Exports of 7,200 MT reported for Dec. 26-31, were mainly for Mexico (3,500 MT) and South Korea (1,700 MT). Accumulated exports for 2008 of 506,900 MT were up 28 percent from the 397,400 MT exported during the previous year. Exports of 300 MT for Jan. 1 were for Mexico (200 MT) and Canada (100 MT).
Futures Market Situation and Outlook:
February live cattle settled at $85.77 a loss of $2.77, April live cattle settled at $88.92 a loss of $2.40, and the June live cattle settled at $86.45 a loss of $1.75. In the feeder cattle pit, January feeder cattle settled at $94.50 a loss of $1.62, March feeder cattle settled at $93.27 a loss of $2.70, and the April feeder cattle settled at $94.27 a loss of $2.72. The reported CME feeder cattle index for 1/6/09 was $96.12 a gain of $.67. Live cattle spreads: Feb/April settled at -$3.15 a loss of $.37, April/June settled at $2.47 a loss of $.65, and June/August settled at -$.50 a loss of $.10. Feeder cattle spreads: Jan/March settled at $1.22 a gain of $1.07, March/April settled at -$1.00 a gain of $.02, and April/May settled at -$1.82 a loss of $.55.
Yesterdays live cattle volume saw 22,768 contracts trade in the pit and 12,463 contracts trade on Globex. Live cattle open interest gained 698 contracts to come in this morning at 217,534. Yesterday’s feeder cattle volume saw 3,619 contracts trade in the pit and 1,864 contracts trade on Globex. Feeder cattle open interest declined 225 contracts to come in this morning at 20,125.
Live and feeder cattle futures settled with sharp losses yesterday on some continued long profit taking after the recent rally in prices. There were also some concerns in the market that if packers are going to get serious about cutting kills into early next week that the cash fed cattle market would not live up to early week expectations. I think another factor in the sell off was positioning ahead of the “Goldman Roll” and this index fund rebalancing, which is supposed to begin today. Estimates vary between 15,000-19,000 cattle and 20,000-22,000 hog contracts that the index fund trader needs to move into different markets. These numbers seem high to me but it is quite apparent that they need to move some money around and this is likely going to be a price limiting factor until they get some of this stuff done. As mentioned in previous writing’s and as outlined above, such a break in the futures market would be a buying opportunity in my opinion as fundamentals of the cattle market would point to higher prices by spring. It will be interesting to see how the market handles some of this money movement over the course of the next couple of days. I would be prepared to take advantage of extreme moves in the market should they occur. Support numbers that I have for the rest of the week are as follows: Feb live, $85 and below that $83, April live, $88.80 and below that $87, March feeders, $93 and below that $90. Look for a $.10-$.20 lower open to live and feeder cattle futures this morning. Trade Well!!!
Any one wanting a more detailed report on the cattle and beef markets including fundamental, chart and technical analysis, plus spec/hedge recommendations for packers, processors, producers, and meat buyers feel free to contact me by phone or e-mail to set up a free trial.
There is risk in trading futures and options.
Have a Good Day,
Troy Vetterkind
Vetterkind Cattle Brokerage, LLC
Chicago Board of Trade
141 West Jackson Blvd.
Suite 1220A
Chicago, IL 60604
1-888-299-1477 Toll Free
1-312-896-2068 Direct
1-708-224-5985 Mobile
tvetterkind@linngroup.com
Reproduction or rebroadcast of any portion of this information is strictly prohibited without the written permission of the Linn Group, Inc. the information reflected herein is derived from sources believed to be reliable; however, this information is not guaranteed as to its accuracy or completeness. Opinions expressed are subject to change without notice. This material and any view expressed herein are provided for informational purposes only and should not be construed in any way as an inducement to buy or sell commodity futures or options contracts. The Linn Group and its officers, directors, employees and affiliates may take positions for their own accounts in contracts referred to herein. Trading futures involves risk of loss. Past performance is not indicative of future results.
Good Morning from the Chicago Board of Trade,
Cash Cattle Situation and Outlook:
The cash fed cattle market was at a standstill again yesterday as packers continue to not be interested in bidding on cattle, although there were a few light dressed bids of $1.35-$1.36 in the northern tier of feeding states. Feeders remain priced at $89-$90 live in the south and $1.40 dressed in the north. Yesterday morning I wrote that we should be able to hold the cash market steady this week for various reasons, barring any kind of sharp sell off on the futures board. Well, we got the sharp sell off, and now it looks as though steady might be a victory for cattle feeders, with $.50-$1 lower now likely in the cards. Talk of production cutbacks came to fruition in a big way yesterday with the daily kill being estimated at 107,000 head. It appears as though some of this near term quick ship business for beef could be getting satisfied and interest going into next week is starting to wane. This type of market sentiment along with lower settlements on the futures board is likely going to be a price limiting factor for the cattle market late this week and early next. Again though, I would view this as a temporary situation as I think the fundamentals of the fed cattle market are such to support a cash fed cattle trade in the mid-upper $80’s through January and lower to mid $90’s by the end of February.
The salebarn trade of cattle continues to be higher with fat cattle in Sioux Falls, SD yesterday bringing $84-$85 on the beef steers and $70-$73 on the Holstein steers. Slaughter cows in Sioux Falls were bringing $42-$49 with a couple of big white cows bringing up to $68. Feeder cattle sales continue to turn in higher results with El Reno, OK calling their sale $4-$7 higher on continued good buyer demand, especially on bigger cattle that will finish by late spring. 500 lbs steers in El Reno yesterday were bringing $104-$116, 600 lbs steers were bringing $94-$104, 700 lbs steers were bringing $93-$98, and 800 lbs steers were bringing $88-$98.
Cash Beef Situation and Outlook:
Yesterdays kill was estimated at 107,000 head, which would be 12,000 head below last week and 13,000 head below the same day a year ago. The week-to-date kill now stands at 352,000 head, which would be 4,000 head above the same period a week ago with the industry looking for a 620,000 head production week. The boxed beef market was lower yesterday with the choice cutout closing $1.31 lower to settle at $143.49 and the select cutout closing $.01 lower to settle at $136.24. Sales volume was very good with 547 loads of beef sold (235.93 loads of choice fab cuts, 161.14 loads of select fab cuts, 40.30 loads of trim, 109.31 loads of grinds). The choice/select spread settled at $7.25 a loss of $1.30.
The beef market was mostly lower yesterday as the last several days of lower ribeye and PSMO prices were being factored into cutout values. Packers purged some backlogged inventory yesterday by offering discounts on ribeyes, short loins, top butts, and peeled tenderloins. This strategy worked as we saw very good sales volume of 547 loads of beef sold with the majority of the increased trading volume comprised of the above mentioned cuts. We also saw increased loads counts along with higher price levels on coarse ground beef. For the most part chuck and round cuts were individually trading $.02-$.05 higher yesterday as there is still retail demand for many of these items. Boneless beef items were trading higher yesterday, especially the 50% fed cattle trim, as yesterdays reduced slaughter and intentions for more of the same into the end of the week had the processing sector of the market scrambling to get some product around them. Talk of further slaughter reductions into early next week should be a supporting factor to cutout values by early next week. Good support should be found on choice cutout values at $1.40 and select cutout values at $1.34-$1.35, give or take a couple of dollars. Beef exports for the week of December 26, 2008-January 1, 2009 are as follows:
Beef: Net sales reductions of 1,000 MT reported for 2009 marketing year (which began Jan 1.) were mainly for Mexico (400 MT), Taiwan (100 MT), and Peru (100 MT). A total of 16,600 MT were outstanding on Dec. 31 and carried over to the 2009 marketing year. Exports of 7,200 MT reported for Dec. 26-31, were mainly for Mexico (3,500 MT) and South Korea (1,700 MT). Accumulated exports for 2008 of 506,900 MT were up 28 percent from the 397,400 MT exported during the previous year. Exports of 300 MT for Jan. 1 were for Mexico (200 MT) and Canada (100 MT).
Futures Market Situation and Outlook:
February live cattle settled at $85.77 a loss of $2.77, April live cattle settled at $88.92 a loss of $2.40, and the June live cattle settled at $86.45 a loss of $1.75. In the feeder cattle pit, January feeder cattle settled at $94.50 a loss of $1.62, March feeder cattle settled at $93.27 a loss of $2.70, and the April feeder cattle settled at $94.27 a loss of $2.72. The reported CME feeder cattle index for 1/6/09 was $96.12 a gain of $.67. Live cattle spreads: Feb/April settled at -$3.15 a loss of $.37, April/June settled at $2.47 a loss of $.65, and June/August settled at -$.50 a loss of $.10. Feeder cattle spreads: Jan/March settled at $1.22 a gain of $1.07, March/April settled at -$1.00 a gain of $.02, and April/May settled at -$1.82 a loss of $.55.
Yesterdays live cattle volume saw 22,768 contracts trade in the pit and 12,463 contracts trade on Globex. Live cattle open interest gained 698 contracts to come in this morning at 217,534. Yesterday’s feeder cattle volume saw 3,619 contracts trade in the pit and 1,864 contracts trade on Globex. Feeder cattle open interest declined 225 contracts to come in this morning at 20,125.
Live and feeder cattle futures settled with sharp losses yesterday on some continued long profit taking after the recent rally in prices. There were also some concerns in the market that if packers are going to get serious about cutting kills into early next week that the cash fed cattle market would not live up to early week expectations. I think another factor in the sell off was positioning ahead of the “Goldman Roll” and this index fund rebalancing, which is supposed to begin today. Estimates vary between 15,000-19,000 cattle and 20,000-22,000 hog contracts that the index fund trader needs to move into different markets. These numbers seem high to me but it is quite apparent that they need to move some money around and this is likely going to be a price limiting factor until they get some of this stuff done. As mentioned in previous writing’s and as outlined above, such a break in the futures market would be a buying opportunity in my opinion as fundamentals of the cattle market would point to higher prices by spring. It will be interesting to see how the market handles some of this money movement over the course of the next couple of days. I would be prepared to take advantage of extreme moves in the market should they occur. Support numbers that I have for the rest of the week are as follows: Feb live, $85 and below that $83, April live, $88.80 and below that $87, March feeders, $93 and below that $90. Look for a $.10-$.20 lower open to live and feeder cattle futures this morning. Trade Well!!!
Any one wanting a more detailed report on the cattle and beef markets including fundamental, chart and technical analysis, plus spec/hedge recommendations for packers, processors, producers, and meat buyers feel free to contact me by phone or e-mail to set up a free trial.
There is risk in trading futures and options.
Have a Good Day,
Troy Vetterkind
Vetterkind Cattle Brokerage, LLC
Chicago Board of Trade
141 West Jackson Blvd.
Suite 1220A
Chicago, IL 60604
1-888-299-1477 Toll Free
1-312-896-2068 Direct
1-708-224-5985 Mobile
tvetterkind@linngroup.com
Reproduction or rebroadcast of any portion of this information is strictly prohibited without the written permission of the Linn Group, Inc. the information reflected herein is derived from sources believed to be reliable; however, this information is not guaranteed as to its accuracy or completeness. Opinions expressed are subject to change without notice. This material and any view expressed herein are provided for informational purposes only and should not be construed in any way as an inducement to buy or sell commodity futures or options contracts. The Linn Group and its officers, directors, employees and affiliates may take positions for their own accounts in contracts referred to herein. Trading futures involves risk of loss. Past performance is not indicative of future results.
Wednesday, January 7, 2009
January 7, 2009
Good Morning from the Chicago Board of Trade,
Cash Cattle Situation and Outlook:
Yesterdays feedlot trade of fed cattle was non-existent as packers were not tendering any bids and feedlots pricing a mostly larger fed cattle offering at $89-$90 live and $1.40 plus dressed. Cattle feeders resolve to get higher money for their cattle this weeks has been solidified by higher settlements on the futures board and a beef trade that so far this week is no worse than steady. Packers contend that there is more cattle to chose from this week and that the beef continues to be a challenge to move at profitable levels and as such are not willing to bid on anything early in the week. It would still appear as though the cash fed cattle market could be higher again this week as beef movement isn’t all that bad and there looks to be some business being conducted out forward, which I think will keep packers in the market wanting inventory. There has been some talk of production cutbacks towards the end of the week as packers try to improve on profitability, which may be a price limiting factor in the northern sections of feeding country where showlists are larger this week. For now and unless we get a crash on the board, I will still call for a mostly steady to $.50-$1 higher market that takes place at $87-$88 live in the southern feeding states and $1.38-$1.40 dressed in the northern feeding states. While canvassing yesterday’s auction market trade of cattle we see fed cattle and slaughter cows trading through the nations salebarns are bringing mostly steady to instances of $1-$2 higher money, with most feeder cattle sales solidly $2-$4 higher. First of the year demand for feeder cattle to get placed into the spring and early summer fed cattle marketing timeframe remains very good and I would expect to see higher prices on feeder cattle (i.e. 600 lbs-800 lbs) for the next couple of weeks.
Cash Beef Situation and Outlook:
Yesterdays kill was estimated at 126,000 head, which would be 2,000 head below last week and 3,000 head below the same day a year ago. The week-to-date kill now stands at 245,000 head, which would be 8,000 head below the same pace last week, as the Monday slaughter was revised down to 119,000 head. The industry will look for a 620,000 head production week. The boxed beef market was mixed yesterday with the choice cutout closing $.17 lower to settle at $144.80 and the select cutout closing $.61 higher to settle at $136.25. Sales volume was good with 313 loads of beef sold (121.04 loads of choice fab cuts, 103.83 loads of select fab cuts, 41.78 loads of trim, 45.90 loads of grinds). The choice/select spread settled at $8.55 a loss of $.78.
The beef market continues to exhibit some strength in end meat pricing, however it is said that perhaps some of this near term buying could be starting to dry up. Yesterday saw decent gains in choice and select chuck rolls, clods, inside/outside rounds and gooseneck rounds for quick ship. Ground beef markets were also higher yesterday on continued retail demand. Packers cite continued challenges in moving ribs and peeled tenders and there was some discounting needed in select strips and top butts yesterday as well. Domestic boneless beef items were a little lower yesterday as more product was offered to the market. Imported boneless bull and cow beef was a tick higher yesterday. It sounds like some of the near term domestic demand for retail beef could be getting satisfied, which could flatten out cutout values for the rest of the week.
Futures Market Situation and Outlook:
February live cattle settled at $88.55 a gain of $1.00, April live cattle settled at $91.32 a gain of $.92, and the June live cattle settled at $88.20 a gain of $.27. In the feeder cattle pit, January feeder cattle settled at $96.12 a loss of $.87, March feeder cattle settled at $95.97 a loss of $.75, and the April feeder cattle settled at $97.00 a loss of $.45. The reported CME feeder cattle index for 1/5/09 was $95.45 a gain of $.93. Live cattle spreads: Feb/April settled at -$2.77 a gain of $.07, April/June settled at $3.12 a gain of $.65, and June/August settled at -$.40 a loss of $.50. Feeder cattle spreads: Jan/March settled at $.15 a loss of $.12, March/April settled at -$1.02 a loss of $.30, and April/May settled at -$1.27 a gain of $.27.
Yesterdays live cattle volume saw 24,482 contracts trade in the pit and 19,607 contracts trade on Globex. Live cattle open interest gained 1,551 contracts to come in this morning at 216,984. Yesterday’s feeder cattle volume saw 3,728 contracts trade in the pit and 1,158 contracts trade on Globex. Feeder cattle open interest declined 486 contracts to come in this morning at 20,328.
The live cattle futures market settled with solid gains yesterday, however feeder futures faltered towards the end of the session with long profit taking and ideas the market got far enough ahead of the cash market for the time being as reasons for the sell off. Fat cattle futures performed well yesterday and closed above the resistance levels I was talking about at $88 in the Feb and $91 in the April; however the sell off in the feeder cattle is a little concerning to me as the feeders have been leading us higher on this rally. Perhaps if the beef were to get a little sloppy towards the end of the week and packers come through with cutting kills and manage to hold the cash market steady we may see live and feeder cattle futures back up a bit. Also of concern for the near term futures market is the upcoming “Goldman Roll”, and what could be some index fund rebalancing of livestock holdings, which could create some sell pressure. Overall I still think live and feeder cattle futures can and will move higher (i.e. mid-$90’s on the fats and lower $100’s on the feeders), but given the recent rally and overbought market conditions coupled with some of this upcoming fund business, we may see a minor set back in the market. It would be a break I would want to buy if it were to transpire. Look for a $.10-$.20 lower open to live and feeder cattle futures this morning. Trade Well!!!
Any one wanting a more detailed report on the cattle and beef markets including fundamental, chart and technical analysis, plus spec/hedge recommendations for packers, processors, producers, and meat buyers feel free to contact me by phone or e-mail to set up a free trial.
There is risk in trading futures and options.
Have a Good Day,
Troy Vetterkind
Vetterkind Cattle Brokerage, LLC
Chicago Board of Trade
141 West Jackson Blvd.
Suite 1220A
Chicago, IL 60604
1-888-299-1477 Toll Free
1-312-896-2068 Direct
1-708-224-5985 Mobile
tvetterkind@linngroup.com
Reproduction or rebroadcast of any portion of this information is strictly prohibited without the written permission of the Linn Group, Inc. the information reflected herein is derived from sources believed to be reliable; however, this information is not guaranteed as to its accuracy or completeness. Opinions expressed are subject to change without notice. This material and any view expressed herein are provided for informational purposes only and should not be construed in any way as an inducement to buy or sell commodity futures or options contracts. The Linn Group and its officers, directors, employees and affiliates may take positions for their own accounts in contracts referred to herein. Trading futures involves risk of loss. Past performance is not indicative of future results.
Good Morning from the Chicago Board of Trade,
Cash Cattle Situation and Outlook:
Yesterdays feedlot trade of fed cattle was non-existent as packers were not tendering any bids and feedlots pricing a mostly larger fed cattle offering at $89-$90 live and $1.40 plus dressed. Cattle feeders resolve to get higher money for their cattle this weeks has been solidified by higher settlements on the futures board and a beef trade that so far this week is no worse than steady. Packers contend that there is more cattle to chose from this week and that the beef continues to be a challenge to move at profitable levels and as such are not willing to bid on anything early in the week. It would still appear as though the cash fed cattle market could be higher again this week as beef movement isn’t all that bad and there looks to be some business being conducted out forward, which I think will keep packers in the market wanting inventory. There has been some talk of production cutbacks towards the end of the week as packers try to improve on profitability, which may be a price limiting factor in the northern sections of feeding country where showlists are larger this week. For now and unless we get a crash on the board, I will still call for a mostly steady to $.50-$1 higher market that takes place at $87-$88 live in the southern feeding states and $1.38-$1.40 dressed in the northern feeding states. While canvassing yesterday’s auction market trade of cattle we see fed cattle and slaughter cows trading through the nations salebarns are bringing mostly steady to instances of $1-$2 higher money, with most feeder cattle sales solidly $2-$4 higher. First of the year demand for feeder cattle to get placed into the spring and early summer fed cattle marketing timeframe remains very good and I would expect to see higher prices on feeder cattle (i.e. 600 lbs-800 lbs) for the next couple of weeks.
Cash Beef Situation and Outlook:
Yesterdays kill was estimated at 126,000 head, which would be 2,000 head below last week and 3,000 head below the same day a year ago. The week-to-date kill now stands at 245,000 head, which would be 8,000 head below the same pace last week, as the Monday slaughter was revised down to 119,000 head. The industry will look for a 620,000 head production week. The boxed beef market was mixed yesterday with the choice cutout closing $.17 lower to settle at $144.80 and the select cutout closing $.61 higher to settle at $136.25. Sales volume was good with 313 loads of beef sold (121.04 loads of choice fab cuts, 103.83 loads of select fab cuts, 41.78 loads of trim, 45.90 loads of grinds). The choice/select spread settled at $8.55 a loss of $.78.
The beef market continues to exhibit some strength in end meat pricing, however it is said that perhaps some of this near term buying could be starting to dry up. Yesterday saw decent gains in choice and select chuck rolls, clods, inside/outside rounds and gooseneck rounds for quick ship. Ground beef markets were also higher yesterday on continued retail demand. Packers cite continued challenges in moving ribs and peeled tenders and there was some discounting needed in select strips and top butts yesterday as well. Domestic boneless beef items were a little lower yesterday as more product was offered to the market. Imported boneless bull and cow beef was a tick higher yesterday. It sounds like some of the near term domestic demand for retail beef could be getting satisfied, which could flatten out cutout values for the rest of the week.
Futures Market Situation and Outlook:
February live cattle settled at $88.55 a gain of $1.00, April live cattle settled at $91.32 a gain of $.92, and the June live cattle settled at $88.20 a gain of $.27. In the feeder cattle pit, January feeder cattle settled at $96.12 a loss of $.87, March feeder cattle settled at $95.97 a loss of $.75, and the April feeder cattle settled at $97.00 a loss of $.45. The reported CME feeder cattle index for 1/5/09 was $95.45 a gain of $.93. Live cattle spreads: Feb/April settled at -$2.77 a gain of $.07, April/June settled at $3.12 a gain of $.65, and June/August settled at -$.40 a loss of $.50. Feeder cattle spreads: Jan/March settled at $.15 a loss of $.12, March/April settled at -$1.02 a loss of $.30, and April/May settled at -$1.27 a gain of $.27.
Yesterdays live cattle volume saw 24,482 contracts trade in the pit and 19,607 contracts trade on Globex. Live cattle open interest gained 1,551 contracts to come in this morning at 216,984. Yesterday’s feeder cattle volume saw 3,728 contracts trade in the pit and 1,158 contracts trade on Globex. Feeder cattle open interest declined 486 contracts to come in this morning at 20,328.
The live cattle futures market settled with solid gains yesterday, however feeder futures faltered towards the end of the session with long profit taking and ideas the market got far enough ahead of the cash market for the time being as reasons for the sell off. Fat cattle futures performed well yesterday and closed above the resistance levels I was talking about at $88 in the Feb and $91 in the April; however the sell off in the feeder cattle is a little concerning to me as the feeders have been leading us higher on this rally. Perhaps if the beef were to get a little sloppy towards the end of the week and packers come through with cutting kills and manage to hold the cash market steady we may see live and feeder cattle futures back up a bit. Also of concern for the near term futures market is the upcoming “Goldman Roll”, and what could be some index fund rebalancing of livestock holdings, which could create some sell pressure. Overall I still think live and feeder cattle futures can and will move higher (i.e. mid-$90’s on the fats and lower $100’s on the feeders), but given the recent rally and overbought market conditions coupled with some of this upcoming fund business, we may see a minor set back in the market. It would be a break I would want to buy if it were to transpire. Look for a $.10-$.20 lower open to live and feeder cattle futures this morning. Trade Well!!!
Any one wanting a more detailed report on the cattle and beef markets including fundamental, chart and technical analysis, plus spec/hedge recommendations for packers, processors, producers, and meat buyers feel free to contact me by phone or e-mail to set up a free trial.
There is risk in trading futures and options.
Have a Good Day,
Troy Vetterkind
Vetterkind Cattle Brokerage, LLC
Chicago Board of Trade
141 West Jackson Blvd.
Suite 1220A
Chicago, IL 60604
1-888-299-1477 Toll Free
1-312-896-2068 Direct
1-708-224-5985 Mobile
tvetterkind@linngroup.com
Reproduction or rebroadcast of any portion of this information is strictly prohibited without the written permission of the Linn Group, Inc. the information reflected herein is derived from sources believed to be reliable; however, this information is not guaranteed as to its accuracy or completeness. Opinions expressed are subject to change without notice. This material and any view expressed herein are provided for informational purposes only and should not be construed in any way as an inducement to buy or sell commodity futures or options contracts. The Linn Group and its officers, directors, employees and affiliates may take positions for their own accounts in contracts referred to herein. Trading futures involves risk of loss. Past performance is not indicative of future results.
Tuesday, January 6, 2009
January 6, 2009
Good Morning from the Chicago Board of Trade,
Cash Cattle Situation and Outlook:
The cash fed cattle market was untested yesterday with no packer bids being posted and feedlot offering prices beginning the week at $89-90 live and $1.40 plus dressed. A look at last weeks trade shows Texas/OK/NM feedlots selling 30,154 head of fed cattle (27,793 previous week) for $87 live. Kansas feedlots sold 30,487 head of fed cattle (36,927) for $86 live and $1.36-$1.37 dressed. Nebraska feedlots sold 54,076 head of fed cattle (64,671) for $85-$86 live and $1.38 dressed. Colorado feedlots sold 5,730 head of fed cattle (8,665) for $86 live and $1.35-$1.36 dressed. And Iowa/MN feedlots sold 20,387 head of fed cattle (25,462) for $86 live and $1.37 dressed. Compared to the week prior and the corresponding showlist numbers, movement looked pretty good in the south and moderate in the north, which is giving us a larger offering of cattle in the north (i.e. +20,000 head) and mostly steady to a couple thousand head smaller in the south. This would make some sense as the north is where we placed the majority of our bigger grass cattle late this summer and this is where we will see showlist numbers increase for the next several weeks. This is also likely to keep northern basis under a little pressure and keep premiums for fed cattle skewed to the south. This week’s cash fed cattle market still looks positive with higher settlements in both the futures and boxed beef markets yesterday. There seems to be some fill-in beef business after the holiday’s, which will keep packers in the market for fed cattle to process. I think we could see a mostly steady to possibly $.50-$1 higher trade by late week at $87-$88 in the south and $1.36-$1.39 dressed in the north. Rallies in the cash fat cattle market will be kept in check throughout the course of the next several weeks as fed numbers become more plentiful in the north, however an expected increase in domestic and foreign beef demand should keep support in the mid-$80’s viable.
Yesterday’s salebarn trade of cattle saw mostly higher prices with fed cattle bringing $1 higher on the beef cattle at $83-$86 and $71-$75 on the Holsteins. Slaughter cows were steady to instances of $1 lower at $35-$45 on the cutter and boning utility cows and $48-$53 on the breakers and white cows. Feeder cattle sales however begin the week solidly higher with Oklahoma City calling their market $4-$7 higher on the bigger cattle and $5-$10 higher on the calves with buyer demand on all classes of cattle called very good. The bulk of the 500 lbs steer calves in OKC yesterday brought $100-$116, the 6 weight steers brought $94-$104, the 7 weight steers brought $94-$99, and the 8 weight steers brought $92-$97. Due to reduced 4th quarter placements into the nation’s feedlots, there remains plenty of empty pen space and what many perceive as a growing marketing hole in late March through early June. Buyers are actively beginning to seek bigger feeders that will place into that marketing timeframe and as such we can expect to see continued strength in the cash feeder cattle market so long as the cash fat cattle or fed cattle board doesn’t fall apart.
Cash Beef Situation and Outlook:
Yesterdays kill was estimated at 122,000 head, which would be 3,000 head below last week and 10,000 head above the same day a year ago. Last Saturday’s kill was revised up to 37,000 head, which will give us a new weekly total of 511,000 head for last week, with the industry looking for a 620,000 head production week for this week. The boxed beef market was higher yesterday with the choice cutout closing $1.78 higher to settle at $144.97 and the select cutout closing $.14 higher to settle at $135.64. Sales volume was light with 258 loads of beef sold (86.11 loads of choice fab cuts, 90.44 loads of select fab cuts, 16.68 loads of trim, 64.38 loads of grinds). The choice/select spread settled at $9.34 a gain of $1.64.
The New Year brought a mostly steady to higher tone to the cash beef market yesterday with most strength again biased towards the procurement of end meats. Retail and wholesale buyers were actively seeking chuck and round items along with ground beef product to fill inventory levels after the last two weeks of holiday production disruptions. After several sessions of discounting in choice and select ribeyes and peeled tenderloins, there at least seemed to be a reprieve in lower prices on these items, which also lent support to cutout values. It has also been rumored that there are some foreign interests shopping around for beef lending support as well. Boneless beef markets were a tick higher in both the 50’s and 90’s yesterday on renewed demand from the processing sector. Imported items like boneless bull and cow beef looked to be just a little lower yesterday. It seems like we could see a little strength in the beef market early this week as buyers come back to get inventory levels in comfortable shape. This should help to support cutout values into late week.
Futures Market Situation and Outlook:
February live cattle settled at $87.55 a gain of $.45, April live cattle settled at $90.40 a loss of $.35, and the June live cattle settled at $87.92 a loss of $.07. In the feeder cattle pit, January feeder cattle settled at $97.00 a gain of $1.40, March feeder cattle settled at $96.72 a gain of $1.20, and the April feeder cattle settled at $97.45 a gain of $1.30. The reported CME feeder cattle index for 1/2/09 was $94.52 a gain of $1.60. Live cattle spreads: Feb/April settled at -$2.85 a gain of $.80, April/June settled at $2.47 a loss of $.27, and the June/August settled at $.10 a loss of $.05. Feeder cattle spreads: Jan/March settled at $.27 a gain of $.20, March/April settled at -$.72 a loss of $.10, and April/May settled at -$1.55 a gain of $.15.
Yesterdays live cattle volume saw 20,435 contracts trade in the pit and 8,186 contracts trade on Globex. Live cattle open interest declined 120 contracts to come in this morning at 215,430. Yesterday’s feeder cattle volume saw 2,616 contracts trade in the pit and 803 contracts trade on Globex. Feeder cattle open interest gained 194 contracts to come in this morning at 20,816.
The latest commitment of traders report showed the small funds net short 14,948 contracts of live cattle futures a decline of 138 shorts. The commercials were net short 61,345 contracts of live cattle an increase of 1,715 shorts. The index funds were net long 98,457 contracts of live cattle futures an increase of 450 longs. The small speculators were net short 22,164 contracts of live cattle a decline of 1,114 shorts. In the feeder cattle, small funds were net short 2,855 contracts of feeder cattle a decrease of 530 shorts. The commercial traders were net long 892 contracts of feeder cattle a decrease of 621 longs. The index funds were net long 6,791 contracts of feeder cattle an increase of 125 longs. The small speculator was net short 4,828 contracts of feeder cattle an increase of 34 shorts.
Live cattle settled mixed yesterday with the feeder cattle market closing with solid gains as further short covering and cash strength unfolds in the market. Technically, Feb and April live cattle futures have had a tough time getting through overhead resistance at $88 and $91 respectively. This morning could be a different story though as overnight Globex futures are aggressively challenging those resistance levels. Feeder cattle and June forward live cattle futures have taken out their corresponding resistance areas already last week and it looks as though front month Feb and April could do it today. Feeder cattle especially look like they could attain upside price targets of $101-$103, as not only do we have strong cash strength behind the feeder cattle market, but we have a very positive technical picture and still a big net short spec position in the market. I think some of the same can be said for live cattle futures, as I believe we can see some moderate cash strength in the next couple of weeks, but more importantly we have a big spec short position in the market that I think will eventually come out and we are going to have hedgers that want to sell the market another couple of dollars higher from where we are at now. Here again though, I don’t know if the market will go straight up from here, as we will have the “Goldman Roll” starting on Thursday along with some index fund rebalancing, which could give us a quick break, however in the medium term I think higher futures prices are in the cards and would want to be a buyer of breaks and hold off on hedges for the time being. Look for a $.20-$.40 higher open to live and feeder cattle futures this morning. Trade Well!!!
Any one wanting a more detailed report on the cattle and beef markets including fundamental, chart and technical analysis, plus spec/hedge recommendations for packers, processors, producers, and meat buyers feel free to contact me by phone or e-mail to set up a free trial.
There is risk in trading futures and options.
Have a Good Day,
Troy Vetterkind
Vetterkind Cattle Brokerage, LLC
Chicago Board of Trade
141 West Jackson Blvd.
Suite 1220A
Chicago, IL 60604
1-888-299-1477 Toll Free
1-312-896-2068 Direct
1-708-224-5985 Mobile
tvetterkind@linngroup.com
Reproduction or rebroadcast of any portion of this information is strictly prohibited without the written permission of the Linn Group, Inc. the information reflected herein is derived from sources believed to be reliable; however, this information is not guaranteed as to its accuracy or completeness. Opinions expressed are subject to change without notice. This material and any view expressed herein are provided for informational purposes only and should not be construed in any way as an inducement to buy or sell commodity futures or options contracts. The Linn Group and its officers, directors, employees and affiliates may take positions for their own accounts in contracts referred to herein. Trading futures involves risk of loss. Past performance is not indicative of future results.
Good Morning from the Chicago Board of Trade,
Cash Cattle Situation and Outlook:
The cash fed cattle market was untested yesterday with no packer bids being posted and feedlot offering prices beginning the week at $89-90 live and $1.40 plus dressed. A look at last weeks trade shows Texas/OK/NM feedlots selling 30,154 head of fed cattle (27,793 previous week) for $87 live. Kansas feedlots sold 30,487 head of fed cattle (36,927) for $86 live and $1.36-$1.37 dressed. Nebraska feedlots sold 54,076 head of fed cattle (64,671) for $85-$86 live and $1.38 dressed. Colorado feedlots sold 5,730 head of fed cattle (8,665) for $86 live and $1.35-$1.36 dressed. And Iowa/MN feedlots sold 20,387 head of fed cattle (25,462) for $86 live and $1.37 dressed. Compared to the week prior and the corresponding showlist numbers, movement looked pretty good in the south and moderate in the north, which is giving us a larger offering of cattle in the north (i.e. +20,000 head) and mostly steady to a couple thousand head smaller in the south. This would make some sense as the north is where we placed the majority of our bigger grass cattle late this summer and this is where we will see showlist numbers increase for the next several weeks. This is also likely to keep northern basis under a little pressure and keep premiums for fed cattle skewed to the south. This week’s cash fed cattle market still looks positive with higher settlements in both the futures and boxed beef markets yesterday. There seems to be some fill-in beef business after the holiday’s, which will keep packers in the market for fed cattle to process. I think we could see a mostly steady to possibly $.50-$1 higher trade by late week at $87-$88 in the south and $1.36-$1.39 dressed in the north. Rallies in the cash fat cattle market will be kept in check throughout the course of the next several weeks as fed numbers become more plentiful in the north, however an expected increase in domestic and foreign beef demand should keep support in the mid-$80’s viable.
Yesterday’s salebarn trade of cattle saw mostly higher prices with fed cattle bringing $1 higher on the beef cattle at $83-$86 and $71-$75 on the Holsteins. Slaughter cows were steady to instances of $1 lower at $35-$45 on the cutter and boning utility cows and $48-$53 on the breakers and white cows. Feeder cattle sales however begin the week solidly higher with Oklahoma City calling their market $4-$7 higher on the bigger cattle and $5-$10 higher on the calves with buyer demand on all classes of cattle called very good. The bulk of the 500 lbs steer calves in OKC yesterday brought $100-$116, the 6 weight steers brought $94-$104, the 7 weight steers brought $94-$99, and the 8 weight steers brought $92-$97. Due to reduced 4th quarter placements into the nation’s feedlots, there remains plenty of empty pen space and what many perceive as a growing marketing hole in late March through early June. Buyers are actively beginning to seek bigger feeders that will place into that marketing timeframe and as such we can expect to see continued strength in the cash feeder cattle market so long as the cash fat cattle or fed cattle board doesn’t fall apart.
Cash Beef Situation and Outlook:
Yesterdays kill was estimated at 122,000 head, which would be 3,000 head below last week and 10,000 head above the same day a year ago. Last Saturday’s kill was revised up to 37,000 head, which will give us a new weekly total of 511,000 head for last week, with the industry looking for a 620,000 head production week for this week. The boxed beef market was higher yesterday with the choice cutout closing $1.78 higher to settle at $144.97 and the select cutout closing $.14 higher to settle at $135.64. Sales volume was light with 258 loads of beef sold (86.11 loads of choice fab cuts, 90.44 loads of select fab cuts, 16.68 loads of trim, 64.38 loads of grinds). The choice/select spread settled at $9.34 a gain of $1.64.
The New Year brought a mostly steady to higher tone to the cash beef market yesterday with most strength again biased towards the procurement of end meats. Retail and wholesale buyers were actively seeking chuck and round items along with ground beef product to fill inventory levels after the last two weeks of holiday production disruptions. After several sessions of discounting in choice and select ribeyes and peeled tenderloins, there at least seemed to be a reprieve in lower prices on these items, which also lent support to cutout values. It has also been rumored that there are some foreign interests shopping around for beef lending support as well. Boneless beef markets were a tick higher in both the 50’s and 90’s yesterday on renewed demand from the processing sector. Imported items like boneless bull and cow beef looked to be just a little lower yesterday. It seems like we could see a little strength in the beef market early this week as buyers come back to get inventory levels in comfortable shape. This should help to support cutout values into late week.
Futures Market Situation and Outlook:
February live cattle settled at $87.55 a gain of $.45, April live cattle settled at $90.40 a loss of $.35, and the June live cattle settled at $87.92 a loss of $.07. In the feeder cattle pit, January feeder cattle settled at $97.00 a gain of $1.40, March feeder cattle settled at $96.72 a gain of $1.20, and the April feeder cattle settled at $97.45 a gain of $1.30. The reported CME feeder cattle index for 1/2/09 was $94.52 a gain of $1.60. Live cattle spreads: Feb/April settled at -$2.85 a gain of $.80, April/June settled at $2.47 a loss of $.27, and the June/August settled at $.10 a loss of $.05. Feeder cattle spreads: Jan/March settled at $.27 a gain of $.20, March/April settled at -$.72 a loss of $.10, and April/May settled at -$1.55 a gain of $.15.
Yesterdays live cattle volume saw 20,435 contracts trade in the pit and 8,186 contracts trade on Globex. Live cattle open interest declined 120 contracts to come in this morning at 215,430. Yesterday’s feeder cattle volume saw 2,616 contracts trade in the pit and 803 contracts trade on Globex. Feeder cattle open interest gained 194 contracts to come in this morning at 20,816.
The latest commitment of traders report showed the small funds net short 14,948 contracts of live cattle futures a decline of 138 shorts. The commercials were net short 61,345 contracts of live cattle an increase of 1,715 shorts. The index funds were net long 98,457 contracts of live cattle futures an increase of 450 longs. The small speculators were net short 22,164 contracts of live cattle a decline of 1,114 shorts. In the feeder cattle, small funds were net short 2,855 contracts of feeder cattle a decrease of 530 shorts. The commercial traders were net long 892 contracts of feeder cattle a decrease of 621 longs. The index funds were net long 6,791 contracts of feeder cattle an increase of 125 longs. The small speculator was net short 4,828 contracts of feeder cattle an increase of 34 shorts.
Live cattle settled mixed yesterday with the feeder cattle market closing with solid gains as further short covering and cash strength unfolds in the market. Technically, Feb and April live cattle futures have had a tough time getting through overhead resistance at $88 and $91 respectively. This morning could be a different story though as overnight Globex futures are aggressively challenging those resistance levels. Feeder cattle and June forward live cattle futures have taken out their corresponding resistance areas already last week and it looks as though front month Feb and April could do it today. Feeder cattle especially look like they could attain upside price targets of $101-$103, as not only do we have strong cash strength behind the feeder cattle market, but we have a very positive technical picture and still a big net short spec position in the market. I think some of the same can be said for live cattle futures, as I believe we can see some moderate cash strength in the next couple of weeks, but more importantly we have a big spec short position in the market that I think will eventually come out and we are going to have hedgers that want to sell the market another couple of dollars higher from where we are at now. Here again though, I don’t know if the market will go straight up from here, as we will have the “Goldman Roll” starting on Thursday along with some index fund rebalancing, which could give us a quick break, however in the medium term I think higher futures prices are in the cards and would want to be a buyer of breaks and hold off on hedges for the time being. Look for a $.20-$.40 higher open to live and feeder cattle futures this morning. Trade Well!!!
Any one wanting a more detailed report on the cattle and beef markets including fundamental, chart and technical analysis, plus spec/hedge recommendations for packers, processors, producers, and meat buyers feel free to contact me by phone or e-mail to set up a free trial.
There is risk in trading futures and options.
Have a Good Day,
Troy Vetterkind
Vetterkind Cattle Brokerage, LLC
Chicago Board of Trade
141 West Jackson Blvd.
Suite 1220A
Chicago, IL 60604
1-888-299-1477 Toll Free
1-312-896-2068 Direct
1-708-224-5985 Mobile
tvetterkind@linngroup.com
Reproduction or rebroadcast of any portion of this information is strictly prohibited without the written permission of the Linn Group, Inc. the information reflected herein is derived from sources believed to be reliable; however, this information is not guaranteed as to its accuracy or completeness. Opinions expressed are subject to change without notice. This material and any view expressed herein are provided for informational purposes only and should not be construed in any way as an inducement to buy or sell commodity futures or options contracts. The Linn Group and its officers, directors, employees and affiliates may take positions for their own accounts in contracts referred to herein. Trading futures involves risk of loss. Past performance is not indicative of future results.
Monday, January 5, 2009
January 5, 2009
Good Morning from the Chicago Board of Trade,
Cash Cattle Situation and Outlook:
We left last week with a cash fed cattle market that trades mostly $1 higher on a live weight basis and $2-$3 higher on a dressed basis. Cattle finally began trading late Friday in the Texas panhandle at $87 live and in Kansas at $86 live and $1.36-$1.37 dressed. Cattle in Colorado brought mostly $86 on Friday and there was further trade that took place in Nebraska and Iowa at $85-$86 live and $1.37-$1.38 dressed. Movement looked moderate with the USDA reporting 80,000 head of cattle sold on Friday in their afternoon report. I will report on totals in the morning once everything is counted and reported to the government. Despite talk of beef not moving and having enough cattle inventory around, packers paid higher money for fed cattle last week on strength in the futures board and the need for cattle to fund the first full kill week of 2009. I think beef movement isn’t all that bad, at least on the end meats and ground beef. Certainly there is a problem selling ribs and certain loin items, however the rest of the complex has some demand not only from domestic retail and wholesale channels, but also from foreign buyers. I also believe we will see some better beef business for the first couple of weeks of this month and I believe this will keep the packing community needing to kill some cattle to fill those orders. There will be more cattle coming to kill starting right now due to our increase in late summer placements of yearling cattle, which will keep the market from running away to the upside, but overall we should find some support in fed cattle prices in the mid $80’s. This week will likely find another increase in showlist numbers as January contract and formula cattle are available to the market. Early week beef demand will be key to see how fed prices trade, so for right now I will call for a steady market, with possibilities of another $.50-$1 higher. Futures will play an important role as well as we could very likely see some first of the year fund buying come back to the market. Last week’s feeder cattle and slaughter cow markets were mostly $2-$4 higher on a limited test as many sales were shut down for the holidays. Now that we will get back on normal schedules we can expect to see more cattle hit the market, however I think there will be good demand for feeders to get placed into April/May, which will keep the market supported. It’s dry on southern plains wheat pastures, which is going to start to force some lightweight cattle to move early in that part of the country and this could be a price limiting factor to cattle weighing less than 700 lbs.
Cash Beef Situation and Outlook:
Last week cattle slaughter was estimated at 507,000 head, which would be 57,000 head above the week before and 25,000 head smaller then the same week a year ago. The total included a Friday kill of 126,000 head and a Saturday kill of 33,000 head. The weekly slaughter produced an estimated 396-mil lbs of beef. From Wednesday to Wednesday of last week, choice boxed beef lost $1.27 to settle at $143.19 and select boxed beef gained $.93 to settle at $135.53 on light holiday movement of 785 loads of fabricated cuts. Friday saw mostly steady prices with the choice cutout closing steady at $143.19 and the select cutout closing $.03 lower to settle at $135.50. Sales volume on Friday was very light with 144 loads of beef sold (47.06 loads of choice fab cuts, 39.84 loads of select fab cuts, 25.63 loads of trim, 31.73 loads of grinds). The choice/select spread settled at $7.69 a gain of $.03, however a loss of $2.17 for the week.
The beef market was mostly steady to lower last week with choice cutout values getting hit the most from weakness in choice ribeyes and peeled tenderloins. The rest of the complex found some support from retail for chuck, round, and ground beef items. This should continue into the first couple of weeks of January as buyers come back to restock inventories. Moving higher priced middle meats will continue to be a price limiting factor as demand for these items won’t pick back up until early spring. I would also expect to see some export business come back to the market, which will be price supportive as well. Look for a sideways to slightly higher beef market for the first part of the week.
Futures Market Situation and Outlook:
For the week, February live cattle gained $1.00 to settle at $87.10, April live cattle gained $1.90 to settle at $90.75, and the June live cattle gained $3.08 to settle at $88.00. In the feeder cattle pit for the week, January feeder cattle gained $2.78 to settle at $95.60, March feeder cattle gained $3.77 to settle at $95.52, and the April feeder cattle gained $3.45 to settle at $96.15. The reported CME feeder cattle index for 1/1/09 was $92.92 a loss of $.01 for the day and a gain of $2.61 for the week. For the week live cattle spreads posted the following changes: Feb/April lost $.90 to settle at -$3.65, April/June lost $1.17 to settle at $2.75, and June/August gained $.35 to settle at $.15. For the week in feeder cattle spreads: Jan/March lost $1.00 to settle at $.07, March/April gained $.33 to settle at -$.62, and April/May lost $.30 to settle at -$1.70.
Fridays live cattle volume saw 18,745 contracts trade in the pit and 13,140 contracts trade on Globex. Live cattle open interest gained 2,291 to come in this morning at 215,560. Friday’s feeder cattle volume saw 2,201 contracts trade in the pit and 820 contracts trade on Globex. Feeder cattle open interest gained 252 contracts to come in this morning at 20,648. For the week live cattle open interest gained 5,122 contracts and feeder cattle open interest gained 357 contracts.
Live and feeder cattle futures settled with sharp gains on Friday on first of the year fund buying and short covering linked to higher cash cattle transactions. Gains were trimmed going into the close on local and spec profit taking. Futures continue to build gains off of support levels under the market set back a couple of weeks ago and I would expect this to continue into the first couple of weeks of January. There still remains a fairly sizeable net short spec position in the market and I would expect to see new fund buying come into the market, which will eventually force those shorts to cover. I also think there will be some support from the cash markets, which will keep us targeting the mid-$90’s in the fat cattle and upper-$90’s in the feeder cattle in the coming weeks. On any early week softness in the market, Feb live cattle will find support at $85-$86 and April live cattle will find support at $88-$89. Front month feeder cattle will have support early this week at $92. Feeders took out some important resistance at $94.50 basis March on Friday, which leads me to believe that higher prices are in the cards. Look for a $.10-$.20 lower open to live and feeder cattle futures this morning. Trade Well!!!
Any one wanting a more detailed report on the cattle and beef markets including fundamental, chart and technical analysis, plus spec/hedge recommendations for packers, processors, producers, and meat buyers feel free to contact me by phone or e-mail to set up a free trial.
There is risk in trading futures and options.
Have a Good Day,
Troy Vetterkind
Vetterkind Cattle Brokerage, LLC
Chicago Board of Trade
141 West Jackson Blvd.
Suite 1220A
Chicago, IL 60604
1-888-299-1477 Toll Free
1-312-896-2068 Direct
1-708-224-5985 Mobile
tvetterkind@linngroup.com
Reproduction or rebroadcast of any portion of this information is strictly prohibited without the written permission of the Linn Group, Inc. the information reflected herein is derived from sources believed to be reliable; however, this information is not guaranteed as to its accuracy or completeness. Opinions expressed are subject to change without notice. This material and any view expressed herein are provided for informational purposes only and should not be construed in any way as an inducement to buy or sell commodity futures or options contracts. The Linn Group and its officers, directors, employees and affiliates may take positions for their own accounts in contracts referred to herein. Trading futures involves risk of loss. Past performance is not indicative of future results.
Good Morning from the Chicago Board of Trade,
Cash Cattle Situation and Outlook:
We left last week with a cash fed cattle market that trades mostly $1 higher on a live weight basis and $2-$3 higher on a dressed basis. Cattle finally began trading late Friday in the Texas panhandle at $87 live and in Kansas at $86 live and $1.36-$1.37 dressed. Cattle in Colorado brought mostly $86 on Friday and there was further trade that took place in Nebraska and Iowa at $85-$86 live and $1.37-$1.38 dressed. Movement looked moderate with the USDA reporting 80,000 head of cattle sold on Friday in their afternoon report. I will report on totals in the morning once everything is counted and reported to the government. Despite talk of beef not moving and having enough cattle inventory around, packers paid higher money for fed cattle last week on strength in the futures board and the need for cattle to fund the first full kill week of 2009. I think beef movement isn’t all that bad, at least on the end meats and ground beef. Certainly there is a problem selling ribs and certain loin items, however the rest of the complex has some demand not only from domestic retail and wholesale channels, but also from foreign buyers. I also believe we will see some better beef business for the first couple of weeks of this month and I believe this will keep the packing community needing to kill some cattle to fill those orders. There will be more cattle coming to kill starting right now due to our increase in late summer placements of yearling cattle, which will keep the market from running away to the upside, but overall we should find some support in fed cattle prices in the mid $80’s. This week will likely find another increase in showlist numbers as January contract and formula cattle are available to the market. Early week beef demand will be key to see how fed prices trade, so for right now I will call for a steady market, with possibilities of another $.50-$1 higher. Futures will play an important role as well as we could very likely see some first of the year fund buying come back to the market. Last week’s feeder cattle and slaughter cow markets were mostly $2-$4 higher on a limited test as many sales were shut down for the holidays. Now that we will get back on normal schedules we can expect to see more cattle hit the market, however I think there will be good demand for feeders to get placed into April/May, which will keep the market supported. It’s dry on southern plains wheat pastures, which is going to start to force some lightweight cattle to move early in that part of the country and this could be a price limiting factor to cattle weighing less than 700 lbs.
Cash Beef Situation and Outlook:
Last week cattle slaughter was estimated at 507,000 head, which would be 57,000 head above the week before and 25,000 head smaller then the same week a year ago. The total included a Friday kill of 126,000 head and a Saturday kill of 33,000 head. The weekly slaughter produced an estimated 396-mil lbs of beef. From Wednesday to Wednesday of last week, choice boxed beef lost $1.27 to settle at $143.19 and select boxed beef gained $.93 to settle at $135.53 on light holiday movement of 785 loads of fabricated cuts. Friday saw mostly steady prices with the choice cutout closing steady at $143.19 and the select cutout closing $.03 lower to settle at $135.50. Sales volume on Friday was very light with 144 loads of beef sold (47.06 loads of choice fab cuts, 39.84 loads of select fab cuts, 25.63 loads of trim, 31.73 loads of grinds). The choice/select spread settled at $7.69 a gain of $.03, however a loss of $2.17 for the week.
The beef market was mostly steady to lower last week with choice cutout values getting hit the most from weakness in choice ribeyes and peeled tenderloins. The rest of the complex found some support from retail for chuck, round, and ground beef items. This should continue into the first couple of weeks of January as buyers come back to restock inventories. Moving higher priced middle meats will continue to be a price limiting factor as demand for these items won’t pick back up until early spring. I would also expect to see some export business come back to the market, which will be price supportive as well. Look for a sideways to slightly higher beef market for the first part of the week.
Futures Market Situation and Outlook:
For the week, February live cattle gained $1.00 to settle at $87.10, April live cattle gained $1.90 to settle at $90.75, and the June live cattle gained $3.08 to settle at $88.00. In the feeder cattle pit for the week, January feeder cattle gained $2.78 to settle at $95.60, March feeder cattle gained $3.77 to settle at $95.52, and the April feeder cattle gained $3.45 to settle at $96.15. The reported CME feeder cattle index for 1/1/09 was $92.92 a loss of $.01 for the day and a gain of $2.61 for the week. For the week live cattle spreads posted the following changes: Feb/April lost $.90 to settle at -$3.65, April/June lost $1.17 to settle at $2.75, and June/August gained $.35 to settle at $.15. For the week in feeder cattle spreads: Jan/March lost $1.00 to settle at $.07, March/April gained $.33 to settle at -$.62, and April/May lost $.30 to settle at -$1.70.
Fridays live cattle volume saw 18,745 contracts trade in the pit and 13,140 contracts trade on Globex. Live cattle open interest gained 2,291 to come in this morning at 215,560. Friday’s feeder cattle volume saw 2,201 contracts trade in the pit and 820 contracts trade on Globex. Feeder cattle open interest gained 252 contracts to come in this morning at 20,648. For the week live cattle open interest gained 5,122 contracts and feeder cattle open interest gained 357 contracts.
Live and feeder cattle futures settled with sharp gains on Friday on first of the year fund buying and short covering linked to higher cash cattle transactions. Gains were trimmed going into the close on local and spec profit taking. Futures continue to build gains off of support levels under the market set back a couple of weeks ago and I would expect this to continue into the first couple of weeks of January. There still remains a fairly sizeable net short spec position in the market and I would expect to see new fund buying come into the market, which will eventually force those shorts to cover. I also think there will be some support from the cash markets, which will keep us targeting the mid-$90’s in the fat cattle and upper-$90’s in the feeder cattle in the coming weeks. On any early week softness in the market, Feb live cattle will find support at $85-$86 and April live cattle will find support at $88-$89. Front month feeder cattle will have support early this week at $92. Feeders took out some important resistance at $94.50 basis March on Friday, which leads me to believe that higher prices are in the cards. Look for a $.10-$.20 lower open to live and feeder cattle futures this morning. Trade Well!!!
Any one wanting a more detailed report on the cattle and beef markets including fundamental, chart and technical analysis, plus spec/hedge recommendations for packers, processors, producers, and meat buyers feel free to contact me by phone or e-mail to set up a free trial.
There is risk in trading futures and options.
Have a Good Day,
Troy Vetterkind
Vetterkind Cattle Brokerage, LLC
Chicago Board of Trade
141 West Jackson Blvd.
Suite 1220A
Chicago, IL 60604
1-888-299-1477 Toll Free
1-312-896-2068 Direct
1-708-224-5985 Mobile
tvetterkind@linngroup.com
Reproduction or rebroadcast of any portion of this information is strictly prohibited without the written permission of the Linn Group, Inc. the information reflected herein is derived from sources believed to be reliable; however, this information is not guaranteed as to its accuracy or completeness. Opinions expressed are subject to change without notice. This material and any view expressed herein are provided for informational purposes only and should not be construed in any way as an inducement to buy or sell commodity futures or options contracts. The Linn Group and its officers, directors, employees and affiliates may take positions for their own accounts in contracts referred to herein. Trading futures involves risk of loss. Past performance is not indicative of future results.
Friday, January 2, 2009
January 2, 2009
Good Morning from the Chicago Board of Trade,
Cash Cattle Situation and Outlook:
The cash cattle markets were largely untested on Wednesday, however there were a few thousand head of cattle that did trade in eastern Nebraska and western Iowa for $1.35 dressed, steady with last week. Packers continue to bid $83 on cattle and I think they are going to have to move bids closer to last week in order to get any cattle bought. I am still going to call for a steady to $1 higher trade for this week at $86-$87 in the south and $1.35-$1.38 dressed in the north. Beef movement isn’t all that bad and I think they will have beef orders to fill into the first couple of weeks of this month. Overnight futures are trading sharply higher this morning, which would also indicate a higher fed trade for this week. Going home for the weekend cattle selling in the salebarns (i.e. fats, feeders, and cows) are all brining $1-$3 higher money and we can look for more of the same early next week.
Cash Beef Situation and Outlook:
Wednesday’s cattle kill was 95,000 head, which would be 53,000 head above last week and 31,000 head below the same day a year ago. The week-to-date kill now stands at 348,000 head, which would be 58,000 head above the same period a week ago with the industry looking for a 500,000 head production week. The boxed beef market was mixed on Wednesday with the choice cutout closing $.23 lower to settle at 143.19 and the select cutout closing $.13 higher to settle at $135.53. Sales volume was good with 330 loads of beef sold (125.80 loads of choice fab cuts, 97.63 loads of select fab cuts, 30.73 loads of trim, 75.50 loads of grinds). The choice/select spread settled at $7.66 a loss of $.36.
The beef market continues to carry a mixed tone with packers needing to offer sharp discounts on rib cuts and peeled tenderloins; however there remains decent demand and higher pricing throughout the end meats and ground beef markets. Wednesday saw sharply lower pricing in ribeyes and PSMO’s, which is likely to show up in the USDA cutout early next week with lower settlements. Aside from that there is good movement of cheaper chuck and round cuts and I would expect that to continue into the first couple weeks of January, which will help to support cutout values on breaks. Look for a lower tone to the beef market into early next week.
Futures Market Situation and Outlook:
February live cattle settled at $86.05 a gain of $.15, April live cattle settled at $89.10 a loss of $.30, and the June live cattle settled at $86.20 a gain of $.22. In the feeder cattle pit, January feeder cattle settled at $94.05 a gain of $.07, March feeder cattle settled at $93.67 a loss of $.15, and the April feeder cattle settled at $94.45 a loss of $.30. The reported CME feeder cattle index for 12/30/08 was $91.96 a gain of $1.51. Live cattle spreads: Feb/April settled at -$3.05 a gain of $.45, April/June settled at $2.90 a loss of $.52, and June/August settled at $.47 a gain of $.47. Feeder cattle spreads: Jan/March settled at $.37 a gain of $.22, March/April settled at -$.77 a gain of $.15, and April/May settled at -$1.15 a loss of $.10.
Wednesday’s live cattle volume saw 13,584 contracts trade in the pit and 7,862 contracts trade on Globex. Live cattle open interest gained 1,952 contracts to come in this morning at 213,285. Wednesdays’ feeder cattle volume saw 1,543 contracts trade in the pit and 483 contracts trade on Globex. Feeder cattle open interest gained 27 contracts to come in this morning at 20,398.
Live and feeder cattle futures were lower most of the session on Wednesday, however a round of late fund buying brought most live and feeder cattle contracts into positive by the close. December went off the board without much fanfare at $84.47. This morning Globex futures, which started trading at 5:00 am, are sharply higher and I think we should trade that way most of the day. I think we are going to see some new fund buying come into all commodity markets now that we are into a new year and with a fairly sizeable spec short position in cattle futures I think we will see some of those shorts forced out of the market. Resistance on Feb cattle will be found at $88.50 and in the April live cattle at $91.00. Resistance on March feeder cattle will be found at $94.50-$94.70 and a close above that level would likely move that market into the upper $90’s. I don’t know if we can get live cattle to close above resistance levels today, but it likely could happen early next week, which would open the door to the $93-$96 level in Feb and April. Look for a $.25-$.50 higher open to live and feeder cattle futures this morning. Trade Well!!!
Any one wanting a more detailed report on the cattle and beef markets including fundamental, chart and technical analysis, plus spec/hedge recommendations for packers, processors, producers, and meat buyers feel free to contact me by phone or e-mail to set up a free trial.
There is risk in trading futures and options.
Have a Good Day,
Troy Vetterkind
Vetterkind Cattle Brokerage, LLC
Chicago Board of Trade
141 West Jackson Blvd.
Suite 1220A
Chicago, IL 60604
1-888-299-1477 Toll Free
1-312-896-2068 Direct
1-708-224-5985 Mobile
tvetterkind@linngroup.com
Reproduction or rebroadcast of any portion of this information is strictly prohibited without the written permission of the Linn Group, Inc. the information reflected herein is derived from sources believed to be reliable; however, this information is not guaranteed as to its accuracy or completeness. Opinions expressed are subject to change without notice. This material and any view expressed herein are provided for informational purposes only and should not be construed in any way as an inducement to buy or sell commodity futures or options contracts. The Linn Group and its officers, directors, employees and affiliates may take positions for their own accounts in contracts referred to herein. Trading futures involves risk of loss. Past performance is not indicative of future results.
Good Morning from the Chicago Board of Trade,
Cash Cattle Situation and Outlook:
The cash cattle markets were largely untested on Wednesday, however there were a few thousand head of cattle that did trade in eastern Nebraska and western Iowa for $1.35 dressed, steady with last week. Packers continue to bid $83 on cattle and I think they are going to have to move bids closer to last week in order to get any cattle bought. I am still going to call for a steady to $1 higher trade for this week at $86-$87 in the south and $1.35-$1.38 dressed in the north. Beef movement isn’t all that bad and I think they will have beef orders to fill into the first couple of weeks of this month. Overnight futures are trading sharply higher this morning, which would also indicate a higher fed trade for this week. Going home for the weekend cattle selling in the salebarns (i.e. fats, feeders, and cows) are all brining $1-$3 higher money and we can look for more of the same early next week.
Cash Beef Situation and Outlook:
Wednesday’s cattle kill was 95,000 head, which would be 53,000 head above last week and 31,000 head below the same day a year ago. The week-to-date kill now stands at 348,000 head, which would be 58,000 head above the same period a week ago with the industry looking for a 500,000 head production week. The boxed beef market was mixed on Wednesday with the choice cutout closing $.23 lower to settle at 143.19 and the select cutout closing $.13 higher to settle at $135.53. Sales volume was good with 330 loads of beef sold (125.80 loads of choice fab cuts, 97.63 loads of select fab cuts, 30.73 loads of trim, 75.50 loads of grinds). The choice/select spread settled at $7.66 a loss of $.36.
The beef market continues to carry a mixed tone with packers needing to offer sharp discounts on rib cuts and peeled tenderloins; however there remains decent demand and higher pricing throughout the end meats and ground beef markets. Wednesday saw sharply lower pricing in ribeyes and PSMO’s, which is likely to show up in the USDA cutout early next week with lower settlements. Aside from that there is good movement of cheaper chuck and round cuts and I would expect that to continue into the first couple weeks of January, which will help to support cutout values on breaks. Look for a lower tone to the beef market into early next week.
Futures Market Situation and Outlook:
February live cattle settled at $86.05 a gain of $.15, April live cattle settled at $89.10 a loss of $.30, and the June live cattle settled at $86.20 a gain of $.22. In the feeder cattle pit, January feeder cattle settled at $94.05 a gain of $.07, March feeder cattle settled at $93.67 a loss of $.15, and the April feeder cattle settled at $94.45 a loss of $.30. The reported CME feeder cattle index for 12/30/08 was $91.96 a gain of $1.51. Live cattle spreads: Feb/April settled at -$3.05 a gain of $.45, April/June settled at $2.90 a loss of $.52, and June/August settled at $.47 a gain of $.47. Feeder cattle spreads: Jan/March settled at $.37 a gain of $.22, March/April settled at -$.77 a gain of $.15, and April/May settled at -$1.15 a loss of $.10.
Wednesday’s live cattle volume saw 13,584 contracts trade in the pit and 7,862 contracts trade on Globex. Live cattle open interest gained 1,952 contracts to come in this morning at 213,285. Wednesdays’ feeder cattle volume saw 1,543 contracts trade in the pit and 483 contracts trade on Globex. Feeder cattle open interest gained 27 contracts to come in this morning at 20,398.
Live and feeder cattle futures were lower most of the session on Wednesday, however a round of late fund buying brought most live and feeder cattle contracts into positive by the close. December went off the board without much fanfare at $84.47. This morning Globex futures, which started trading at 5:00 am, are sharply higher and I think we should trade that way most of the day. I think we are going to see some new fund buying come into all commodity markets now that we are into a new year and with a fairly sizeable spec short position in cattle futures I think we will see some of those shorts forced out of the market. Resistance on Feb cattle will be found at $88.50 and in the April live cattle at $91.00. Resistance on March feeder cattle will be found at $94.50-$94.70 and a close above that level would likely move that market into the upper $90’s. I don’t know if we can get live cattle to close above resistance levels today, but it likely could happen early next week, which would open the door to the $93-$96 level in Feb and April. Look for a $.25-$.50 higher open to live and feeder cattle futures this morning. Trade Well!!!
Any one wanting a more detailed report on the cattle and beef markets including fundamental, chart and technical analysis, plus spec/hedge recommendations for packers, processors, producers, and meat buyers feel free to contact me by phone or e-mail to set up a free trial.
There is risk in trading futures and options.
Have a Good Day,
Troy Vetterkind
Vetterkind Cattle Brokerage, LLC
Chicago Board of Trade
141 West Jackson Blvd.
Suite 1220A
Chicago, IL 60604
1-888-299-1477 Toll Free
1-312-896-2068 Direct
1-708-224-5985 Mobile
tvetterkind@linngroup.com
Reproduction or rebroadcast of any portion of this information is strictly prohibited without the written permission of the Linn Group, Inc. the information reflected herein is derived from sources believed to be reliable; however, this information is not guaranteed as to its accuracy or completeness. Opinions expressed are subject to change without notice. This material and any view expressed herein are provided for informational purposes only and should not be construed in any way as an inducement to buy or sell commodity futures or options contracts. The Linn Group and its officers, directors, employees and affiliates may take positions for their own accounts in contracts referred to herein. Trading futures involves risk of loss. Past performance is not indicative of future results.
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