December 5, 2008
Good Morning from the Chicago Board of Trade,
Cash Cattle Situation and Outlook:
We saw an active fed cattle trade develop in all trading areas at steady money with Wednesday’s declines. Kansas feedlots sold around 18,000 head of fed cattle for $86-$87 live and $1.37 ½ dressed, Texas feedlot sold around 26,000 head of fed cattle for mostly $87 live with some $86 being paid late. In the north, Nebraska feedlots sold approximately 13,000 head of fed cattle for $85-$85.50 live and $1.36-$1.38 dressed, with most of the market taking place at $1.36 late in the day. Colorado feedlots sold a couple thousand head of fed cattle for $1.38 dressed, and Iowa feedlots sold close to 10,000 head of fed cattle for $1.35-$1.37. That should clean things up for the week with any more cleanup trade likely taking place towards the lower end of yesterday’s price range. Going home for the weekend feeder cattle markets were starting to soften up due to the drop in cash fed cattle and cattle futures. We should probably expect to see further losses in the cash market early next week.
Cash Beef Situation and Outlook:
Yesterday’s cattle slaughter was estimated at 124,000 head, which would be 124,000 head above last week and 6,000 head below the same day a year ago. The week-to-date kill now stands at 483,000 head, which would be 99,000 head above the same period a week ago with the industry looking for a 625,000 head production week. The boxed beef market was lower yesterday with the choice cutout closing $2.97 lower to settle at $145.78 and the select cutout closing $1.26 lower to settle at $137.14. Sales volume was moderate with 352 loads of beef sold (128.79 loads of choice fab cuts, 109.63 loads of select fab cuts, 60.27 loads of trim, 52.95 loads of grinds). The choice/select spread settled at $8.64 a loss of $1.71.
The beef market was lower yesterday, however sales volumes were starting to pick up on the lower market. Chuck, round, and loin items led the market lower yesterday as retail demand for said items was still lackluster. With that said though, there was some interest beginning to surface in certain chuck items from the export market, which could help to stabilize some of the beef declines by next week. Most boneless beef markets were under pressure yesterday and I would look for further weakness in the beef market into the middle of next week.
Futures Market Situation and Outlook:
December live cattle settled at $83.07 a loss of $.75, February live cattle settled at $83.07 a loss of $1.00, and the April live cattle settled at $85.12 a loss of $.92. In the feeder cattle pit, January feeder cattle settled at $88.10 a loss of $.25, March feeder cattle settled at $86.90 a loss of $1.15, and the April feeder cattle settled at $88.35 a loss of $.90. The reported CME feeder cattle index for 12/3/08 was $91.87 a loss of $.42.
Yesterday’s live cattle volume saw 22,632 contracts trade in the pit and 11,925 contracts trade on Globex. Live cattle open interest gained 2,729 contracts to come in this morning at 217,377. Yesterday’s feeder cattle volume saw 4,615 contracts trade in the pit and 2,203 contracts trade on Globex. Feeder cattle open interest declined 181 contracts to come in this morning at 20,361.
Live and feeder cattle futures settled lower once again on continued spec and commercial selling. We made a new round of contract lows in most live and feeder cattle futures yesterday, which doesn’t bode well technically. The market did manage to rebound slightly off its lows going into the close, but with stock futures pointing to another lower open to the Dow Jones this morning, I would say that cattle futures will be on the defensive as well. Closing December live cattle futures below $83, February live cattle below $83.50, and January feeder cattle below $88 by the end of the day would keep the door open to lower prices going into next week. I don’t see much strength in the cash market for next week either, so this will add to sell side pressure. Look for a $.25-$.50 lower open to live and feeder cattle futures this morning. Trade Well!!!
Any one wanting a more detailed report on the cattle and beef markets including fundamental, chart and technical analysis, plus spec/hedge recommendations for packers, processors, producers, and meat buyers feel free to contact me by phone or e-mail to set up a free trial.
There is risk in trading futures and options.
Have a Good Day,
Troy Vetterkind
Vetterkind Cattle Brokerage, LLC
Chicago Board of Trade
141 West Jackson Blvd.
Suite 1220A
Chicago, IL 60604
1-888-299-1477 Toll Free
1-312-896-2068 Direct
1-708-224-5985 Mobile
tvetterkind@linngroup.com
Reproduction or rebroadcast of any portion of this information is strictly prohibited without the written permission of the Linn Group, Inc. the information reflected herein is derived from sources believed to be reliable; however, this information is not guaranteed as to its accuracy or completeness. Opinions expressed are subject to change without notice. This material and any view expressed herein are provided for informational purposes only and should not be construed in any way as an inducement to buy or sell commodity futures or options contracts. The Linn Group and its officers, directors, employees and affiliates may take positions for their own accounts in contracts referred to herein. Trading futures involves risk of loss. Past performance is not indicative of future results.
Friday, December 5, 2008
Thursday, December 4, 2008
December 4, 2008
Good Morning from the Chicago Board of Trade,
Cash Cattle Situation and Outlook:
We started to see a few cattle begin to trade in the north and south yesterday at $3-$5 lower money, however volume was very light and it wasn’t enough to establish a market but the trend is definitely lower when compared to last week. A few thousand head of fed cattle exchanged hands in Texas and Kansas at $87 live and a few thousand head of cattle traded in Nebraska and Iowa at $1.37-$1.38 dressed. Falling futures prices, which is providing an opportune basis level on hedged cattle and faltering boxed beef prices along with packers getting serious about cutting kills are all combining to pressure the cash fed cattle market this week. As mentioned earlier in the week an increase in December contract and formula cattle is also giving packer buyer’s leverage in this week’s price negotiation. I would look for a more active trade to develop by later today in all areas of cattle feeding country at the above mentioned prices.
In auction market news, fed cattle selling through the Sioux Falls, SD market yesterday were being called steady to $1 lower as well with the beef fats bringing $80-$84 and the Holsteins bringing $69-$72. Slaughter cows were steady to as much as $4 higher on the lean cows with prices ranging between $36-$43 on the cutters and boners and $43-$48 on the fat cows. Surprisingly feeder cattle markets are holding up fairly well this week with many sales such as Kearney, NE and Torrington, WY calling their markets $2-$4 higher. Demand is reportedly very good for 5 weight steer calves that can be grazed or backgrounded through the winter. 500 lbs steers in Torrington yesterday were bringing $96-$115 and the 600 lbs steers were bringing $88-$96. Kearney had a decent run of yearling cattle with the 7 weight steers bringing $90-$99 and the 8 weight steers bringing $90-$95.
Cash Beef Situation and Outlook:
Yesterdays kill was estimated at 113,000 head, which would be 14,000 head below last week and 17,000 head below the same day a year ago. The week-to-date kill now stands at 359,000 head, which would be 25,000 head below the same period a week ago with the industry looking for a 625,000 head production week. The boxed beef market was lower yesterday with the choice cutout closing down $2.66 to settle at $148.75 and the select cutout closing down $2.26 to settle at $138.40. Sales volume was light moderate with 338 loads of beef sold (102.38 loads of choice fab cuts, 121.29 loads of select fab cuts, 53.93 loads of trim, 60.78 loads of grinds). The choice/select spread settled at $10.35 a loss of $.40.
The beef was under pressure yesterday on a lack of domestic and international demand. Sharp discounts were being offered by packers in choice ribeyes, short ribs, boneless strips, and peeled tenders. Many other cuts throughout the beef carcass were being discounted yesterday as well, however not to the degree of above-mentioned items. Lower priced items such as coarse ground beef markets were being discounted as well. Boneless beef markets were mixed once again with moderate strength in the fed cattle 50’s and mostly steady on the boneless cow 90’s. Consumer pulls at most retail and wholesale chains have been lackluster this week, which has most of these buyers on the sidelines waiting for a better demand scenario to develop before committing to further purchases. This will likely keep the beef market under pressure until sometime next week when production cutbacks from this week kick in to support the market. Export sales for the week of November 21-27, 2008 are as follows:
Beef: Net sales of 3,800 MT resulted as increases for Mexico (3,100 MT) and Canada (700 MT), were partially offset by decreases for Japan (700 MT). Net Sales of 700 MT for delivery in 2009 resulted as increases for Vietnam (500 MT), Mexico (200 MT), and Canada (100 MT), were partially offset by decreases for Japan (100 MT). Exports of 6,100 MT were mainly to Mexico (2,800 MT), Canada (1,100 MT), Japan (800 MT), South Korea (600 MT), and Vietnam (400 MT).
Futures Market Situation and Outlook:
December live cattle settled at $83.82 a loss of $.52, February live cattle settled at $84.07 a loss of $.87, and the April live cattle settled at $86.05 a loss of $.47. In the feeder cattle pit, January feeder cattle settled at $88.35 a loss of $.65, March feeder cattle settled at $88.05 a loss of $1.05, and the April feeder cattle settled at $89.25 a loss of $.72. The reported CME feeder cattle index for 12/1/08 was $92.29 a loss of $2.06.
Yesterdays live cattle volume saw 23,642 trade in the pit and 9,261 contracts trade on Globex. Live cattle open interest gained 1,463 contracts to come in this morning at 214,837. Yesterday’s feeder cattle volume saw 2,037 contracts trade in the pit and 1,595 contracts trade on Globex. Feeder cattle open interest gained 252 contracts to come in this morning at 20,544.
It was the same old story in the cattle futures market yesterday as an early session rally faded midsession on weakness linked to the sell off in the equity markets. There were some fundamental factors at play yesterday as well, with lower cash fed cattle markets and lower boxed beef markets adding to the sell pressure. Option trading was rather quiet yesterday with the biggest feature of the day being the sales of February live cattle $84, $82, and $79 puts. Option volatility continues to run high with Feb atm vol @25% and April atm money vol @23.5%. Technically, the futures market continues to breakdown on any rally attempts on spec selling. Live cattle futures will be down testing contract lows at $83 in the December and $83.80 in the Feb. A close below these levels by Friday would open the door to the upper $70’s to lower $80’s. January feeder cattle contract lows are $87.80 and the March feeder cattle actually closed on a new contract low yesterday at $88.05. Here too, unless we can come back and close back above these levels by tomorrow, the market would appear to be heading down to the lower to mid $80’s in my opinion. Once we get the bulk of this weeks fed cattle trade behind us we could see a round of hedge lifting and short covering, which could help to support the market. Overnight equity futures are lower again so we will call for a $.10-$.20 lower open to live and feeder cattle futures this morning. Trade Well!!!
Any one wanting a more detailed report on the cattle and beef markets including fundamental, chart and technical analysis, plus spec/hedge recommendations for packers, processors, producers, and meat buyers feel free to contact me by phone or e-mail to set up a free trial.
There is risk in trading futures and options.
Have a Good Day,
Troy Vetterkind
Vetterkind Cattle Brokerage, LLC
Chicago Board of Trade
141 West Jackson Blvd.
Suite 1220A
Chicago, IL 60604
1-888-299-1477 Toll Free
1-312-896-2068 Direct
1-708-224-5985 Mobile
tvetterkind@linngroup.com
Reproduction or rebroadcast of any portion of this information is strictly prohibited without the written permission of the Linn Group, Inc. the information reflected herein is derived from sources believed to be reliable; however, this information is not guaranteed as to its accuracy or completeness. Opinions expressed are subject to change without notice. This material and any view expressed herein are provided for informational purposes only and should not be construed in any way as an inducement to buy or sell commodity futures or options contracts. The Linn Group and its officers, directors, employees and affiliates may take positions for their own accounts in contracts referred to herein. Trading futures involves risk of loss. Past performance is not indicative of future results.
Good Morning from the Chicago Board of Trade,
Cash Cattle Situation and Outlook:
We started to see a few cattle begin to trade in the north and south yesterday at $3-$5 lower money, however volume was very light and it wasn’t enough to establish a market but the trend is definitely lower when compared to last week. A few thousand head of fed cattle exchanged hands in Texas and Kansas at $87 live and a few thousand head of cattle traded in Nebraska and Iowa at $1.37-$1.38 dressed. Falling futures prices, which is providing an opportune basis level on hedged cattle and faltering boxed beef prices along with packers getting serious about cutting kills are all combining to pressure the cash fed cattle market this week. As mentioned earlier in the week an increase in December contract and formula cattle is also giving packer buyer’s leverage in this week’s price negotiation. I would look for a more active trade to develop by later today in all areas of cattle feeding country at the above mentioned prices.
In auction market news, fed cattle selling through the Sioux Falls, SD market yesterday were being called steady to $1 lower as well with the beef fats bringing $80-$84 and the Holsteins bringing $69-$72. Slaughter cows were steady to as much as $4 higher on the lean cows with prices ranging between $36-$43 on the cutters and boners and $43-$48 on the fat cows. Surprisingly feeder cattle markets are holding up fairly well this week with many sales such as Kearney, NE and Torrington, WY calling their markets $2-$4 higher. Demand is reportedly very good for 5 weight steer calves that can be grazed or backgrounded through the winter. 500 lbs steers in Torrington yesterday were bringing $96-$115 and the 600 lbs steers were bringing $88-$96. Kearney had a decent run of yearling cattle with the 7 weight steers bringing $90-$99 and the 8 weight steers bringing $90-$95.
Cash Beef Situation and Outlook:
Yesterdays kill was estimated at 113,000 head, which would be 14,000 head below last week and 17,000 head below the same day a year ago. The week-to-date kill now stands at 359,000 head, which would be 25,000 head below the same period a week ago with the industry looking for a 625,000 head production week. The boxed beef market was lower yesterday with the choice cutout closing down $2.66 to settle at $148.75 and the select cutout closing down $2.26 to settle at $138.40. Sales volume was light moderate with 338 loads of beef sold (102.38 loads of choice fab cuts, 121.29 loads of select fab cuts, 53.93 loads of trim, 60.78 loads of grinds). The choice/select spread settled at $10.35 a loss of $.40.
The beef was under pressure yesterday on a lack of domestic and international demand. Sharp discounts were being offered by packers in choice ribeyes, short ribs, boneless strips, and peeled tenders. Many other cuts throughout the beef carcass were being discounted yesterday as well, however not to the degree of above-mentioned items. Lower priced items such as coarse ground beef markets were being discounted as well. Boneless beef markets were mixed once again with moderate strength in the fed cattle 50’s and mostly steady on the boneless cow 90’s. Consumer pulls at most retail and wholesale chains have been lackluster this week, which has most of these buyers on the sidelines waiting for a better demand scenario to develop before committing to further purchases. This will likely keep the beef market under pressure until sometime next week when production cutbacks from this week kick in to support the market. Export sales for the week of November 21-27, 2008 are as follows:
Beef: Net sales of 3,800 MT resulted as increases for Mexico (3,100 MT) and Canada (700 MT), were partially offset by decreases for Japan (700 MT). Net Sales of 700 MT for delivery in 2009 resulted as increases for Vietnam (500 MT), Mexico (200 MT), and Canada (100 MT), were partially offset by decreases for Japan (100 MT). Exports of 6,100 MT were mainly to Mexico (2,800 MT), Canada (1,100 MT), Japan (800 MT), South Korea (600 MT), and Vietnam (400 MT).
Futures Market Situation and Outlook:
December live cattle settled at $83.82 a loss of $.52, February live cattle settled at $84.07 a loss of $.87, and the April live cattle settled at $86.05 a loss of $.47. In the feeder cattle pit, January feeder cattle settled at $88.35 a loss of $.65, March feeder cattle settled at $88.05 a loss of $1.05, and the April feeder cattle settled at $89.25 a loss of $.72. The reported CME feeder cattle index for 12/1/08 was $92.29 a loss of $2.06.
Yesterdays live cattle volume saw 23,642 trade in the pit and 9,261 contracts trade on Globex. Live cattle open interest gained 1,463 contracts to come in this morning at 214,837. Yesterday’s feeder cattle volume saw 2,037 contracts trade in the pit and 1,595 contracts trade on Globex. Feeder cattle open interest gained 252 contracts to come in this morning at 20,544.
It was the same old story in the cattle futures market yesterday as an early session rally faded midsession on weakness linked to the sell off in the equity markets. There were some fundamental factors at play yesterday as well, with lower cash fed cattle markets and lower boxed beef markets adding to the sell pressure. Option trading was rather quiet yesterday with the biggest feature of the day being the sales of February live cattle $84, $82, and $79 puts. Option volatility continues to run high with Feb atm vol @25% and April atm money vol @23.5%. Technically, the futures market continues to breakdown on any rally attempts on spec selling. Live cattle futures will be down testing contract lows at $83 in the December and $83.80 in the Feb. A close below these levels by Friday would open the door to the upper $70’s to lower $80’s. January feeder cattle contract lows are $87.80 and the March feeder cattle actually closed on a new contract low yesterday at $88.05. Here too, unless we can come back and close back above these levels by tomorrow, the market would appear to be heading down to the lower to mid $80’s in my opinion. Once we get the bulk of this weeks fed cattle trade behind us we could see a round of hedge lifting and short covering, which could help to support the market. Overnight equity futures are lower again so we will call for a $.10-$.20 lower open to live and feeder cattle futures this morning. Trade Well!!!
Any one wanting a more detailed report on the cattle and beef markets including fundamental, chart and technical analysis, plus spec/hedge recommendations for packers, processors, producers, and meat buyers feel free to contact me by phone or e-mail to set up a free trial.
There is risk in trading futures and options.
Have a Good Day,
Troy Vetterkind
Vetterkind Cattle Brokerage, LLC
Chicago Board of Trade
141 West Jackson Blvd.
Suite 1220A
Chicago, IL 60604
1-888-299-1477 Toll Free
1-312-896-2068 Direct
1-708-224-5985 Mobile
tvetterkind@linngroup.com
Reproduction or rebroadcast of any portion of this information is strictly prohibited without the written permission of the Linn Group, Inc. the information reflected herein is derived from sources believed to be reliable; however, this information is not guaranteed as to its accuracy or completeness. Opinions expressed are subject to change without notice. This material and any view expressed herein are provided for informational purposes only and should not be construed in any way as an inducement to buy or sell commodity futures or options contracts. The Linn Group and its officers, directors, employees and affiliates may take positions for their own accounts in contracts referred to herein. Trading futures involves risk of loss. Past performance is not indicative of future results.
Wednesday, December 3, 2008
December 3, 2008
Good Morning from the Chicago Board of Trade,
Cash Cattle Situation and Outlook:
Cash fed cattle markets were at a standstill yesterday as packer bids were rather non-existent and feedlots offering cattle at $92/$1.45. The USDA did report a few pens of cattle sold in Texas for $88 live, however volume was too light to establish a trend. I would assume that a late week trade will develop at what now appears is going to be lower money. Larger contract and formula supplies of fed cattle for the first of December and faltering beef and futures market are likely to be the main culprits for the lower trade by the end of the week. There is also some talk of packers cutting back on production hours towards the end of this week, which will also keep some pressure on this week’s cash trade. Look for an $88 live and $1.40 dressed trade to develop by Friday. In other cash news, fed cattle selling through the Midwest auction markets were bringing mostly steady money at $83-$86 with the Holsteins steers bringing $75-$77. Slaughter cows were a little firmer in spots with the bulk of the cutter and boner cows bringing $34-$43, with some white cows up to $45. Feeder cattle sales are mixed, however a firmer tone is being noted at many sales. The majority of the 500 lbs-600 lbs steer calves that sold in the plains states salebarns yesterday were bringing $90-$105, with the true yearling cattle, which are hard to find, bringing from the mid-$80’s to lower $90’s.
Cash Beef Situation and Outlook:
Yesterday’s cattle slaughter was estimated at 126,000 head, which would be 2,000 head below last week and 5,000 head below the same day a year ago. The industry will be looking for a 625,000 head production week. The boxed beef market was lower yesterday with the choice cutout closing $.38 lower to settle at $151.41 and the select cutout closing $.37 lower to settle at $140.66. Sales volume was light yesterday with 204 loads of beef sold (70.71 loads of choice fab cuts, 68.25 loads of select fab cuts, 14.88 loads of trim, 50.04 loads of grinds). The choice/select spread settled at $10.75 a loss of $.01.
The beef market was lower yesterday as both domestic demand and export demand has failed to meet expectations this week. Sharp discounts were beginning to surface in the chuck, round, and loin primals yesterday, with short ribs, inside rounds, top butts, and PSMO’s receiving the biggest brunt of the lower money. Poor weekend beef clearance has most buyers sitting on the sidelines or buying on an as-need basis. Export business is reportedly non-existent this week as is evident by sharply lower chuck roll and short rib markets along with the drop credit being at its lowest levels in over 5 years. Boneless beef markets were mixed yesterday with the fed cattle 50’s garnering some support from talk of production cutbacks later this week and boneless cow 90’s under pressure from an increase of cow numbers in the west. We probably now need to look for the beef market to stay under pressure for the balance of the week.
Futures Market Situation and Outlook:
December live cattle settled at $84.35 a loss of $1.10, February live cattle settled at $84.95 a loss of $.77, and the April live cattle settled at $86.52 a loss of $1.02. In the feeder cattle pit, January feeder cattle settled at $89.00 a loss of $.62, March feeder cattle settled at $89.10 a loss of $.75, and the April feeder cattle settled at $89.97 a loss of $.50. The reported CME feeder cattle index for 11/29/08 was $94.35 a gain of $.77.
Yesterdays live cattle volume saw 20,445 contracts trade in the pit and 9,261 contracts trade on Globex. Live cattle open interest declined 119 contracts to come in this morning at 213,323. Yesterday’s feeder cattle volume saw 1,583 contracts trade in the pit and 1,043 contracts trade on Globex. Feeder cattle open interest gained 23 contracts to come in this morning at 20,290.
Live and feeder cattle futures settled lower yesterday despite decent gains in the stock markets on concerns over forward and near term beef demand and pricing. New contract lows seem close at hand with December live cattle likely to test support at $83 and February live cattle at $83.80. January feeder cattle will likely be testing its contract lows of $87.80 either by today or tomorrow as well. A Close below any of the above mentioned support areas would open the door for lower futures prices due to technical selling. We do have a lower cash cattle and beef market priced in for this week, so to see some short covering once we get this weeks cash trade behind us might help to mitigate some of the losses by the end of the week. Dow and S&P futures are lower this morning, which will likely prompt a $.25-$.50 lower open to live and feeder cattle futures this morning. Trade Well!!!
Any one wanting a more detailed report on the cattle and beef markets including fundamental, chart and technical analysis, plus spec/hedge recommendations for packers, processors, producers, and meat buyers feel free to contact me by phone or e-mail to set up a free trial.
There is risk in trading futures and options.
Have a Good Day,
Troy Vetterkind
Vetterkind Cattle Brokerage, LLC
Chicago Board of Trade
141 West Jackson Blvd.
Suite 1220A
Chicago, IL 60604
1-888-299-1477 Toll Free
1-312-896-2068 Direct
1-708-224-5985 Mobile
tvetterkind@linngroup.com
Reproduction or rebroadcast of any portion of this information is strictly prohibited without the written permission of the Linn Group, Inc. the information reflected herein is derived from sources believed to be reliable; however, this information is not guaranteed as to its accuracy or completeness. Opinions expressed are subject to change without notice. This material and any view expressed herein are provided for informational purposes only and should not be construed in any way as an inducement to buy or sell commodity futures or options contracts. The Linn Group and its officers, directors, employees and affiliates may take positions for their own accounts in contracts referred to herein. Trading futures involves risk of loss. Past performance is not indicative of future results.
Good Morning from the Chicago Board of Trade,
Cash Cattle Situation and Outlook:
Cash fed cattle markets were at a standstill yesterday as packer bids were rather non-existent and feedlots offering cattle at $92/$1.45. The USDA did report a few pens of cattle sold in Texas for $88 live, however volume was too light to establish a trend. I would assume that a late week trade will develop at what now appears is going to be lower money. Larger contract and formula supplies of fed cattle for the first of December and faltering beef and futures market are likely to be the main culprits for the lower trade by the end of the week. There is also some talk of packers cutting back on production hours towards the end of this week, which will also keep some pressure on this week’s cash trade. Look for an $88 live and $1.40 dressed trade to develop by Friday. In other cash news, fed cattle selling through the Midwest auction markets were bringing mostly steady money at $83-$86 with the Holsteins steers bringing $75-$77. Slaughter cows were a little firmer in spots with the bulk of the cutter and boner cows bringing $34-$43, with some white cows up to $45. Feeder cattle sales are mixed, however a firmer tone is being noted at many sales. The majority of the 500 lbs-600 lbs steer calves that sold in the plains states salebarns yesterday were bringing $90-$105, with the true yearling cattle, which are hard to find, bringing from the mid-$80’s to lower $90’s.
Cash Beef Situation and Outlook:
Yesterday’s cattle slaughter was estimated at 126,000 head, which would be 2,000 head below last week and 5,000 head below the same day a year ago. The industry will be looking for a 625,000 head production week. The boxed beef market was lower yesterday with the choice cutout closing $.38 lower to settle at $151.41 and the select cutout closing $.37 lower to settle at $140.66. Sales volume was light yesterday with 204 loads of beef sold (70.71 loads of choice fab cuts, 68.25 loads of select fab cuts, 14.88 loads of trim, 50.04 loads of grinds). The choice/select spread settled at $10.75 a loss of $.01.
The beef market was lower yesterday as both domestic demand and export demand has failed to meet expectations this week. Sharp discounts were beginning to surface in the chuck, round, and loin primals yesterday, with short ribs, inside rounds, top butts, and PSMO’s receiving the biggest brunt of the lower money. Poor weekend beef clearance has most buyers sitting on the sidelines or buying on an as-need basis. Export business is reportedly non-existent this week as is evident by sharply lower chuck roll and short rib markets along with the drop credit being at its lowest levels in over 5 years. Boneless beef markets were mixed yesterday with the fed cattle 50’s garnering some support from talk of production cutbacks later this week and boneless cow 90’s under pressure from an increase of cow numbers in the west. We probably now need to look for the beef market to stay under pressure for the balance of the week.
Futures Market Situation and Outlook:
December live cattle settled at $84.35 a loss of $1.10, February live cattle settled at $84.95 a loss of $.77, and the April live cattle settled at $86.52 a loss of $1.02. In the feeder cattle pit, January feeder cattle settled at $89.00 a loss of $.62, March feeder cattle settled at $89.10 a loss of $.75, and the April feeder cattle settled at $89.97 a loss of $.50. The reported CME feeder cattle index for 11/29/08 was $94.35 a gain of $.77.
Yesterdays live cattle volume saw 20,445 contracts trade in the pit and 9,261 contracts trade on Globex. Live cattle open interest declined 119 contracts to come in this morning at 213,323. Yesterday’s feeder cattle volume saw 1,583 contracts trade in the pit and 1,043 contracts trade on Globex. Feeder cattle open interest gained 23 contracts to come in this morning at 20,290.
Live and feeder cattle futures settled lower yesterday despite decent gains in the stock markets on concerns over forward and near term beef demand and pricing. New contract lows seem close at hand with December live cattle likely to test support at $83 and February live cattle at $83.80. January feeder cattle will likely be testing its contract lows of $87.80 either by today or tomorrow as well. A Close below any of the above mentioned support areas would open the door for lower futures prices due to technical selling. We do have a lower cash cattle and beef market priced in for this week, so to see some short covering once we get this weeks cash trade behind us might help to mitigate some of the losses by the end of the week. Dow and S&P futures are lower this morning, which will likely prompt a $.25-$.50 lower open to live and feeder cattle futures this morning. Trade Well!!!
Any one wanting a more detailed report on the cattle and beef markets including fundamental, chart and technical analysis, plus spec/hedge recommendations for packers, processors, producers, and meat buyers feel free to contact me by phone or e-mail to set up a free trial.
There is risk in trading futures and options.
Have a Good Day,
Troy Vetterkind
Vetterkind Cattle Brokerage, LLC
Chicago Board of Trade
141 West Jackson Blvd.
Suite 1220A
Chicago, IL 60604
1-888-299-1477 Toll Free
1-312-896-2068 Direct
1-708-224-5985 Mobile
tvetterkind@linngroup.com
Reproduction or rebroadcast of any portion of this information is strictly prohibited without the written permission of the Linn Group, Inc. the information reflected herein is derived from sources believed to be reliable; however, this information is not guaranteed as to its accuracy or completeness. Opinions expressed are subject to change without notice. This material and any view expressed herein are provided for informational purposes only and should not be construed in any way as an inducement to buy or sell commodity futures or options contracts. The Linn Group and its officers, directors, employees and affiliates may take positions for their own accounts in contracts referred to herein. Trading futures involves risk of loss. Past performance is not indicative of future results.
Tuesday, December 2, 2008
December 2, 2008
Good Morning from the Chicago Board of Trade,
Cash Cattle Situation and Outlook:
A look at last weeks feedlot sales volumes and prices shows Texas/OK/NM feedlots selling 42,535 head of fed cattle (37,055 the week before) for $90 live, Kansas feedlots sold 44,080 head of fed cattle (31,593) for $90 live, Nebraska feedlots sold 62,038 head of fed cattle (49,079) for $89 live and $1.42-$1.43 dressed, Colorado feedlots sold 4,398 head of fed cattle (7,045) for $89-$90 live and $1.43-$1.44 dressed, and Iowa/MN feedlots sold 25,020 head of fed cattle (26,394) for $88 live and $1.40 dressed. When compared to the previous week, feedlot movement didn’t look all that bad, however we find ourselves coming into this week with a sharply larger showlist offering linked mainly to a hefty increase in contract and formula cattle for the first of December. As such packers weren’t tendering many bids yesterday, especially with the board going their way. Feedlot offering prices begin the week at $92-$93 in the south and $1.45-$1.46 dressed in the north. Prospects for a steady to higher cash fed cattle market coming out of last week were dashed today with the crashing futures board and larger showlist offering. Unless we can see a dramatic turnaround in board values, I would say steady to $1 lower would be the best call on this week’s cash market for right now.
In auction market news, fed cattle selling in the upper Midwest salebarns were actually bringing higher money on the beef fats at $82-$87 and $71-$75 on the Holstein steers. Most of these gains can likely be attributed to catching up with the gains witnessed in the cash feedlot trade last week. Slaughter cows were under a little pressure yesterday with the cutter and boner cows bringing $32-$42 and the fat cows bringing $43-$48. Feeder cattle markets were trading at lower money yesterday with Oklahoma City, OK calling their market steady to $2 lower on an estimated run of 7,400 head. Yesterday in OKC, 400 lbs steers were bringing $100-$117, 500 lbs steers were bringing $90-$110 (depending on quality and weaned or unweaned), 600 lbs steers were bringing $85-$102, 700 lbs steers were bringing $85-$95, and the 800 lbs steers were bringing $85-$91.
Cash Beef Situation and Outlook:
Yesterdays cattle kill was estimated at 120,000 head, which would be 9,000 head below last week and 10,000 head below the same day a year ago. The industry will be looking for a 625,000 head production week. The boxed beef market was higher yesterday with the choice cutout closing $.18 higher to settle at $151.79 and the select cutout closing $.27 higher to settle at $141.03. Sales volume was light with 143 loads of beef sold (55.18 loads of choice fab cuts, 49.42 loads of select fab cuts, 19.74 loads of trim, 18.46 loads of grinds). The choice/select spread settled at $10.76 a loss of $.09.
The beef market was slow to develop yesterday as most participants came back from the long holiday weekend going over inventory positions and determining their next move in the marketplace. Reportedly packers were offering certain middle meat items at lower money in particular items from the loin in an attempt to try and spur retail interest, as movement of beef over the weekend was rather lackluster. Boneless beef markets were slightly lower yesterday as reportedly product is available at the packinghouse level. The beef market looks like it will be under a little pressure early this week, and possibly firming up late in the week. Australia released their monthly beef export numbers yesterday with an 81% decrease in exports to Russia during the month of November. Japanese exports were off 12% on the month and down 26% from the same period last year. Exports to the U.S. were up 5% on the month and up 32% compared to the same month a year ago. As mentioned in previous writing’s, the cheaper U.S. dollar and collapsing world economies is going to attract Australian beef to the U.S.
Futures Market Situation and Outlook:
December live cattle settled at $85.45 a loss of $1.92, February live cattle settled at $85.72 a loss of $1.92, and the April live cattle settled at $87.55 a loss of $2.17. In the feeder cattle pit, January feeder cattle settled at $89.62 a loss of $2.07, March feeder cattle settled at $89.85 a loss of $2.37, and the April feeder cattle settled at $90.47 a loss of $2.27. The reported CME feeder cattle index for 11/28/08 was $93.58 a gain of $.21.
Yesterdays live cattle volume saw 18,171 contracts trade in the pit and 8,769 contracts trade on Globex. Live cattle open interest declined 603 contracts to come in this morning at 213,363. Yesterday’s feeder cattle volume saw 1,605 contracts trade in the pit and 758 contracts trade on Globex. Feeder cattle open interest gained 364 contracts to come in this morning at 20,269.
The latest commitment of traders report showed speculative fund traders net short 12,331 contracts of live cattle futures a gain of 1,527 shorts from last week, commercial traders were short 65,174 a decline of 1,643 shorts from last week, index fund traders were net long 100,942 a decline of 1,632 longs from the previous week, and the small speculative traders were net short 23,436 a decline of 1,518 shorts from the previous week. In the feeder cattle, spec funds were net short 3,960 an increase of 1,163 shorts from the previous week, commercials were net long 2,093 a gain of 988, index funds were net long 6,608 a gain of 336, and the small spec was net short 4,741 a gain of 160.
Live and feeder cattle futures settled sharply lower yesterday in sympathy with a 7% loss in the equity market. We managed to wipe out all of last weeks gains in one fell swoop yesterday. Live and feeder cattle futures will need to see a dramatic turnaround either today or tomorrow in order to stave off another test of recent contract lows, and likely round of new contract lows. Support for the rest of this week in Dec live cattle will be found at $83 and in the February live cattle at $83.80. We will need to see both Dec and Feb live get back above $87 and $88 respectively to negate yesterday’s bearishness. In the feeder cattle, January will have some support at $87.80 and will need to get back above $92 in order to keep any rally attempts alive. Taking out any of the above mentioned support areas open the door to the upper $70’s basis the fat cattle and lower $80’s basis the feeders. Stock futures are indicating a higher open to the equity markets this morning, which should help promote a $.10-$.20 higher open to live and feeder cattle futures. Trade Well!!!
Any one wanting a more detailed report on the cattle and beef markets including fundamental, chart and technical analysis, plus spec/hedge recommendations for packers, processors, producers, and meat buyers feel free to contact me by phone or e-mail to set up a free trial.
There is risk in trading futures and options.
Have a Good Day,
Troy Vetterkind
Vetterkind Cattle Brokerage, LLC
Chicago Board of Trade
141 West Jackson Blvd.
Suite 1220A
Chicago, IL 60604
1-888-299-1477 Toll Free
1-312-896-2068 Direct
1-708-224-5985 Mobile
tvetterkind@linngroup.com
Reproduction or rebroadcast of any portion of this information is strictly prohibited without the written permission of the Linn Group, Inc. the information reflected herein is derived from sources believed to be reliable; however, this information is not guaranteed as to its accuracy or completeness. Opinions expressed are subject to change without notice. This material and any view expressed herein are provided for informational purposes only and should not be construed in any way as an inducement to buy or sell commodity futures or options contracts. The Linn Group and its officers, directors, employees and affiliates may take positions for their own accounts in contracts referred to herein. Trading futures involves risk of loss. Past performance is not indicative of future results.
Good Morning from the Chicago Board of Trade,
Cash Cattle Situation and Outlook:
A look at last weeks feedlot sales volumes and prices shows Texas/OK/NM feedlots selling 42,535 head of fed cattle (37,055 the week before) for $90 live, Kansas feedlots sold 44,080 head of fed cattle (31,593) for $90 live, Nebraska feedlots sold 62,038 head of fed cattle (49,079) for $89 live and $1.42-$1.43 dressed, Colorado feedlots sold 4,398 head of fed cattle (7,045) for $89-$90 live and $1.43-$1.44 dressed, and Iowa/MN feedlots sold 25,020 head of fed cattle (26,394) for $88 live and $1.40 dressed. When compared to the previous week, feedlot movement didn’t look all that bad, however we find ourselves coming into this week with a sharply larger showlist offering linked mainly to a hefty increase in contract and formula cattle for the first of December. As such packers weren’t tendering many bids yesterday, especially with the board going their way. Feedlot offering prices begin the week at $92-$93 in the south and $1.45-$1.46 dressed in the north. Prospects for a steady to higher cash fed cattle market coming out of last week were dashed today with the crashing futures board and larger showlist offering. Unless we can see a dramatic turnaround in board values, I would say steady to $1 lower would be the best call on this week’s cash market for right now.
In auction market news, fed cattle selling in the upper Midwest salebarns were actually bringing higher money on the beef fats at $82-$87 and $71-$75 on the Holstein steers. Most of these gains can likely be attributed to catching up with the gains witnessed in the cash feedlot trade last week. Slaughter cows were under a little pressure yesterday with the cutter and boner cows bringing $32-$42 and the fat cows bringing $43-$48. Feeder cattle markets were trading at lower money yesterday with Oklahoma City, OK calling their market steady to $2 lower on an estimated run of 7,400 head. Yesterday in OKC, 400 lbs steers were bringing $100-$117, 500 lbs steers were bringing $90-$110 (depending on quality and weaned or unweaned), 600 lbs steers were bringing $85-$102, 700 lbs steers were bringing $85-$95, and the 800 lbs steers were bringing $85-$91.
Cash Beef Situation and Outlook:
Yesterdays cattle kill was estimated at 120,000 head, which would be 9,000 head below last week and 10,000 head below the same day a year ago. The industry will be looking for a 625,000 head production week. The boxed beef market was higher yesterday with the choice cutout closing $.18 higher to settle at $151.79 and the select cutout closing $.27 higher to settle at $141.03. Sales volume was light with 143 loads of beef sold (55.18 loads of choice fab cuts, 49.42 loads of select fab cuts, 19.74 loads of trim, 18.46 loads of grinds). The choice/select spread settled at $10.76 a loss of $.09.
The beef market was slow to develop yesterday as most participants came back from the long holiday weekend going over inventory positions and determining their next move in the marketplace. Reportedly packers were offering certain middle meat items at lower money in particular items from the loin in an attempt to try and spur retail interest, as movement of beef over the weekend was rather lackluster. Boneless beef markets were slightly lower yesterday as reportedly product is available at the packinghouse level. The beef market looks like it will be under a little pressure early this week, and possibly firming up late in the week. Australia released their monthly beef export numbers yesterday with an 81% decrease in exports to Russia during the month of November. Japanese exports were off 12% on the month and down 26% from the same period last year. Exports to the U.S. were up 5% on the month and up 32% compared to the same month a year ago. As mentioned in previous writing’s, the cheaper U.S. dollar and collapsing world economies is going to attract Australian beef to the U.S.
Futures Market Situation and Outlook:
December live cattle settled at $85.45 a loss of $1.92, February live cattle settled at $85.72 a loss of $1.92, and the April live cattle settled at $87.55 a loss of $2.17. In the feeder cattle pit, January feeder cattle settled at $89.62 a loss of $2.07, March feeder cattle settled at $89.85 a loss of $2.37, and the April feeder cattle settled at $90.47 a loss of $2.27. The reported CME feeder cattle index for 11/28/08 was $93.58 a gain of $.21.
Yesterdays live cattle volume saw 18,171 contracts trade in the pit and 8,769 contracts trade on Globex. Live cattle open interest declined 603 contracts to come in this morning at 213,363. Yesterday’s feeder cattle volume saw 1,605 contracts trade in the pit and 758 contracts trade on Globex. Feeder cattle open interest gained 364 contracts to come in this morning at 20,269.
The latest commitment of traders report showed speculative fund traders net short 12,331 contracts of live cattle futures a gain of 1,527 shorts from last week, commercial traders were short 65,174 a decline of 1,643 shorts from last week, index fund traders were net long 100,942 a decline of 1,632 longs from the previous week, and the small speculative traders were net short 23,436 a decline of 1,518 shorts from the previous week. In the feeder cattle, spec funds were net short 3,960 an increase of 1,163 shorts from the previous week, commercials were net long 2,093 a gain of 988, index funds were net long 6,608 a gain of 336, and the small spec was net short 4,741 a gain of 160.
Live and feeder cattle futures settled sharply lower yesterday in sympathy with a 7% loss in the equity market. We managed to wipe out all of last weeks gains in one fell swoop yesterday. Live and feeder cattle futures will need to see a dramatic turnaround either today or tomorrow in order to stave off another test of recent contract lows, and likely round of new contract lows. Support for the rest of this week in Dec live cattle will be found at $83 and in the February live cattle at $83.80. We will need to see both Dec and Feb live get back above $87 and $88 respectively to negate yesterday’s bearishness. In the feeder cattle, January will have some support at $87.80 and will need to get back above $92 in order to keep any rally attempts alive. Taking out any of the above mentioned support areas open the door to the upper $70’s basis the fat cattle and lower $80’s basis the feeders. Stock futures are indicating a higher open to the equity markets this morning, which should help promote a $.10-$.20 higher open to live and feeder cattle futures. Trade Well!!!
Any one wanting a more detailed report on the cattle and beef markets including fundamental, chart and technical analysis, plus spec/hedge recommendations for packers, processors, producers, and meat buyers feel free to contact me by phone or e-mail to set up a free trial.
There is risk in trading futures and options.
Have a Good Day,
Troy Vetterkind
Vetterkind Cattle Brokerage, LLC
Chicago Board of Trade
141 West Jackson Blvd.
Suite 1220A
Chicago, IL 60604
1-888-299-1477 Toll Free
1-312-896-2068 Direct
1-708-224-5985 Mobile
tvetterkind@linngroup.com
Reproduction or rebroadcast of any portion of this information is strictly prohibited without the written permission of the Linn Group, Inc. the information reflected herein is derived from sources believed to be reliable; however, this information is not guaranteed as to its accuracy or completeness. Opinions expressed are subject to change without notice. This material and any view expressed herein are provided for informational purposes only and should not be construed in any way as an inducement to buy or sell commodity futures or options contracts. The Linn Group and its officers, directors, employees and affiliates may take positions for their own accounts in contracts referred to herein. Trading futures involves risk of loss. Past performance is not indicative of future results.
Friday, November 28, 2008
November 28, 2008
Good Morning from the Chicago Board of Trade,
Cash Cattle Situation and Outlook:
The cash fed cattle trade became active after the close of futures trading on Wednesday with prices running generally $2-$3 higher at $90 live in the south and $1.43 dressed in the north. Trade volumes look like there was close to 40,000 head of cattle sold in all trading areas according to the USDA afternoon slaughter cattle report, however I will report on actual numbers on Monday once everything is counted and reported to the USDA today. Feeder cattle and slaughter cow markets were also starting to firm up Tuesday and Wednesday after last weeks huge declines. I think we can go into next week looking for a firmer tone to all classes of cattle. I will call for a steady to $1 higher market for fats and feeders, and mostly steady for slaughter cows. We probably won’t rally straight up, but I think we could have put a low in the fed cattle market last week for a little while.
Cash Beef Situation and Outlook:
Wednesday’s cattle slaughter was estimated at 127,000 head, which was 2,000 head above last week and 2,000 head below the same day a year ago. The week-to-date kill stands at 384,000 head compared to 363,000 head for the same period a week ago. The boxed beef market was lower Wednesday with the choice cutout closing $1.55 lower to settle at $152.39 and the select cutout closing $1.98 lower to settle at $142.03. Sales volume was good with 326 loads of beef sold (102.68 loads of choice fab cuts, 108.91 loads of select fab cuts, 27.20 loads of trim, 87.64 loads of grinds). The choice/select spread settled at $10.35 a gain of $.43.
The beef market was lower on Wednesday which should have been expected given the proximity of the Thanksgiving holiday. I wouldn’t expect to see much out of the boxed beef market today either as many will be out of the office for an extended weekend. Most chuck and round items were trading at lower money on Wednesday, however there were a few instances of higher rib and loin cuts. Boneless beef items were under pressure yesterday with the biggest declines being found in the boneless cow 90’s. Next week I would look for a lower trade early values firming up late as retail and wholesale interests cover their first of the month needs and finish buying middle meats for end of the year holiday celebrations.
Futures Market Situation and Outlook:
On Wednesday, December live cattle settled at $87.42 a gain of $1.60, February live cattle settled at $88.15 a gain of $.82, and the April live cattle settled at $89.70 a gain of $.55. In the feeder cattle pit, January feeder cattle settled at $92.20 a gain of $.80, March feeder cattle settled at $92.92 a gain of $.67, and the April feeder cattle settled at $93.35 a gain of $.95. The reported CME feeder cattle index for 11/25/08 was $92.70 a gain of $.84.
Wednesday’s live cattle volume saw 17,407 contracts trade in the pit and 7,111 contracts trade on Globex. Live cattle open interest declined 915 contracts to come in this morning at 212,918. Wednesday’s feeder cattle volume saw 1,385 contracts trade in the pit and 504 contracts trade on Globex. Feeder cattle open interest gained 83 contracts to come in this morning at 19,632.
Live and feeder cattle futures had a nice rally on Wednesday as a higher cash trade and short covering linked to optimism towards higher cash markets until mid December lifted values. The futures market acts and feels a whole lot better than it did coming out of last week and weekly and monthly charts could be indicating that we have put a near term bottom in the futures market as well. Much will depend on how the stock market acts, but here too, that market feels like it could rally into the end of the year as I think we could already have the end of the world priced into that market for the time being. I want to be a buyer of live and feeder cattle on breaks for the immediate near term, looking for higher cash fed cattle, cash feeder cattle, cash beef, and futures market into mid December. Look for a mixed open to live and feeder cattle futures today (i.e. $.10 higher to $.10 lower), with some support being found underneath the market on any big break. Keep in mind all livestock, grain, financial, and stock markets will close at noon today. Have a Good Weekend and Trade Well!!!
Any one wanting a more detailed report on the cattle and beef markets including fundamental, chart and technical analysis, plus spec/hedge recommendations for packers, processors, producers, and meat buyers feel free to contact me by phone or e-mail to set up a free trial.
There is risk in trading futures and options.
Have a Good Day,
Troy Vetterkind
Vetterkind Cattle Brokerage, LLC
Chicago Board of Trade
141 West Jackson Blvd.
Suite 1220A
Chicago, IL 60604
1-888-299-1477 Toll Free
1-312-896-2068 Direct
1-708-224-5985 Mobile
tvetterkind@linngroup.com
Reproduction or rebroadcast of any portion of this information is strictly prohibited without the written permission of the Linn Group, Inc. the information reflected herein is derived from sources believed to be reliable; however, this information is not guaranteed as to its accuracy or completeness. Opinions expressed are subject to change without notice. This material and any view expressed herein are provided for informational purposes only and should not be construed in any way as an inducement to buy or sell commodity futures or options contracts. The Linn Group and its officers, directors, employees and affiliates may take positions for their own accounts in contracts referred to herein. Trading futures involves risk of loss. Past performance is not indicative of future results.
Good Morning from the Chicago Board of Trade,
Cash Cattle Situation and Outlook:
The cash fed cattle trade became active after the close of futures trading on Wednesday with prices running generally $2-$3 higher at $90 live in the south and $1.43 dressed in the north. Trade volumes look like there was close to 40,000 head of cattle sold in all trading areas according to the USDA afternoon slaughter cattle report, however I will report on actual numbers on Monday once everything is counted and reported to the USDA today. Feeder cattle and slaughter cow markets were also starting to firm up Tuesday and Wednesday after last weeks huge declines. I think we can go into next week looking for a firmer tone to all classes of cattle. I will call for a steady to $1 higher market for fats and feeders, and mostly steady for slaughter cows. We probably won’t rally straight up, but I think we could have put a low in the fed cattle market last week for a little while.
Cash Beef Situation and Outlook:
Wednesday’s cattle slaughter was estimated at 127,000 head, which was 2,000 head above last week and 2,000 head below the same day a year ago. The week-to-date kill stands at 384,000 head compared to 363,000 head for the same period a week ago. The boxed beef market was lower Wednesday with the choice cutout closing $1.55 lower to settle at $152.39 and the select cutout closing $1.98 lower to settle at $142.03. Sales volume was good with 326 loads of beef sold (102.68 loads of choice fab cuts, 108.91 loads of select fab cuts, 27.20 loads of trim, 87.64 loads of grinds). The choice/select spread settled at $10.35 a gain of $.43.
The beef market was lower on Wednesday which should have been expected given the proximity of the Thanksgiving holiday. I wouldn’t expect to see much out of the boxed beef market today either as many will be out of the office for an extended weekend. Most chuck and round items were trading at lower money on Wednesday, however there were a few instances of higher rib and loin cuts. Boneless beef items were under pressure yesterday with the biggest declines being found in the boneless cow 90’s. Next week I would look for a lower trade early values firming up late as retail and wholesale interests cover their first of the month needs and finish buying middle meats for end of the year holiday celebrations.
Futures Market Situation and Outlook:
On Wednesday, December live cattle settled at $87.42 a gain of $1.60, February live cattle settled at $88.15 a gain of $.82, and the April live cattle settled at $89.70 a gain of $.55. In the feeder cattle pit, January feeder cattle settled at $92.20 a gain of $.80, March feeder cattle settled at $92.92 a gain of $.67, and the April feeder cattle settled at $93.35 a gain of $.95. The reported CME feeder cattle index for 11/25/08 was $92.70 a gain of $.84.
Wednesday’s live cattle volume saw 17,407 contracts trade in the pit and 7,111 contracts trade on Globex. Live cattle open interest declined 915 contracts to come in this morning at 212,918. Wednesday’s feeder cattle volume saw 1,385 contracts trade in the pit and 504 contracts trade on Globex. Feeder cattle open interest gained 83 contracts to come in this morning at 19,632.
Live and feeder cattle futures had a nice rally on Wednesday as a higher cash trade and short covering linked to optimism towards higher cash markets until mid December lifted values. The futures market acts and feels a whole lot better than it did coming out of last week and weekly and monthly charts could be indicating that we have put a near term bottom in the futures market as well. Much will depend on how the stock market acts, but here too, that market feels like it could rally into the end of the year as I think we could already have the end of the world priced into that market for the time being. I want to be a buyer of live and feeder cattle on breaks for the immediate near term, looking for higher cash fed cattle, cash feeder cattle, cash beef, and futures market into mid December. Look for a mixed open to live and feeder cattle futures today (i.e. $.10 higher to $.10 lower), with some support being found underneath the market on any big break. Keep in mind all livestock, grain, financial, and stock markets will close at noon today. Have a Good Weekend and Trade Well!!!
Any one wanting a more detailed report on the cattle and beef markets including fundamental, chart and technical analysis, plus spec/hedge recommendations for packers, processors, producers, and meat buyers feel free to contact me by phone or e-mail to set up a free trial.
There is risk in trading futures and options.
Have a Good Day,
Troy Vetterkind
Vetterkind Cattle Brokerage, LLC
Chicago Board of Trade
141 West Jackson Blvd.
Suite 1220A
Chicago, IL 60604
1-888-299-1477 Toll Free
1-312-896-2068 Direct
1-708-224-5985 Mobile
tvetterkind@linngroup.com
Reproduction or rebroadcast of any portion of this information is strictly prohibited without the written permission of the Linn Group, Inc. the information reflected herein is derived from sources believed to be reliable; however, this information is not guaranteed as to its accuracy or completeness. Opinions expressed are subject to change without notice. This material and any view expressed herein are provided for informational purposes only and should not be construed in any way as an inducement to buy or sell commodity futures or options contracts. The Linn Group and its officers, directors, employees and affiliates may take positions for their own accounts in contracts referred to herein. Trading futures involves risk of loss. Past performance is not indicative of future results.
Wednesday, November 26, 2008
November 26, 2008
Good Morning from the Chicago Board of Trade,
Cash Cattle Situation and Outlook:
The cash fed cattle market was untested yesterday with packer bids of $87 live and $1.37 dressed going unmatched against feedlot offering prices of $90-$92 live and $1.42-$1.44 dressed. All eye’s were on the futures market again yesterday to see if someone could get advantage over someone else in terms of buying or selling cattle in the cash market this week. I can tell you that couldn’t be a more fool hardy mistake to try and price cattle, whether it be on the buy side or the sell side, by what is going on in the futures market, as the futures are in complete disconnect with what is going on in the real world right now. I think both the packer and the cattle feeder realize fat cattle got a little too cheap last week, and I think both would agree that cattle will be higher this week. Perhaps not as high as the cattle feeder would like, but I think the packer realizes he needs some cattle to kill next week, and the market will be a buck or two higher from last week. This foolishness with cattle futures trading TICK for TICK with Dow and S&P futures should not have a bearing on this weeks cash cattle trade, and those trying to determine what the value of fat cattle should be this week by wringing their hands and watching what is going on in Chicago, should turn their quote screens off, and price the cattle by where the cutout is at, or by what kind of numbers they have for sale, or by what kind of meat sales they have to cover, because what is going on in the trading pit and on the screen at the CME, at least by yesterday’s standards, is by far price discovery. With that said, I think we should all look for a moderating in price declines and slight price improvement in cash fed, feeder, and slaughter cow values throughout the course of the next couple of weeks.
Cash Beef Situation and Outlook:
Yesterdays cattle kill was estimated at 128,000 head, which would be 1,000 head above last week and 3,000 head above the same day a year ago. The week-to-date kill now stands at 257,000 head, which would be 19,000 head above the same period a week ago with the industry looking for a 620,000 head production week. The boxed beef market was lower yesterday with the choice cutout closing $.94 lower to settle at $153.94 and the select cutout closing $.98 lower to settle at $144.01. Sales volume was good with 377 loads of beef sold (120.43 loads of choice fab cuts, 130.79 loads of select fab cuts, 40.41 loads of trim, 85.54 loads of grinds). The choice/select spread settled at $9.92 a gain of $.04.
The beef market was lower yesterday, as most attention from the buy side of the equation has turned to moving poultry product ahead of the Thanksgiving Day holiday. As such we saw packers discounting end meats along with loin product in order to spur some demand. The continued lack of export demand weighed on short rib values, with inside round and strip loin values reflecting reduced domestic buyer demand. Spot coarse ground items were under pressure yesterday as well, however processors looking beyond Thanksgiving Day were bidding slightly higher for cow 90’s and fed cattle 50s’. A lack of import business directly following the up coming holiday could be a cause of this. Still believe that we will come back from the holiday and see a modest up tick in beef buying interest from the retail and wholesale sector as they cover first of Dec feature adds and finish late year holiday celebration buying. Beyond that the beef market will be plagued by a modest increase in fed cattle production and waning demand after the holiday’s for beef until mid March. Some of this negativity towards the Jan/Feb beef market could be negated if a falling U.S. dollar and subsequent up tick in export demand were to develop. We also need to keep a close eye on the U.S. dollar to determine what level of beef imports we could be dealing with in the first quarter of 2009.
Futures Market Situation and Outlook:
December live cattle settled at $85.82 a loss of $.82, February live cattle settled at $87.32 a loss of $.27, and the April live cattle settled at $89.15 a loss of $.10. In the feeder cattle pit, January feeder cattle settled at $91.40, unch, March feeder cattle settled at $92.25, unch, and the April feeder cattle settled at $92.40 a loss of $.15. The reported CME feeder cattle index for 11/24/08 was $91.86 a loss of $.85.
Yesterdays live cattle volume saw 23,029 contracts trade in the pit and 10,770 contracts trade on Globex. Live cattle open interest declined 95 contracts to come in this morning at 213,883. Yesterday’s feeder cattle volume saw 1,535 contacts trade in the pit and 685 contracts trade on Globex. Feeder cattle open interest gained 361 contracts to come in this morning at 19,552.
The cattle futures market was pretty choppy and volatile again yesterday with part of the market thinking that Monday’s rally was overdone, part of the market thinking we should rally because the cash market will be higher this week, and part of the market trading cattle via the stock market. Despite all of the foolish intra-day movement, by the end of the day it did feel like there was some support under the market and we did manage to close back near our highs of the day. Given what we know about the near term fundamentals of the market (i.e. manageable fed cattle supplies and beef demand that isn’t all that bad and bound to improve after Thanksgiving), I still think we could see higher cattle futures prices going into the first couple weeks of December. I still want to target the $89-$90 area in Dec and Feb live cattle futures and the $94 area in Jan feeder cattle as near term price objectives. If by chance the cash beef and fed cattle markets were to exceed current expectations, which could easily happen as the current state of the beef market can probably support a low to mid $90’s fed cattle market, then we could see live cattle futures move $2-$4 beyond the above mentioned resistance levels. Option trading was active in the February live cattle calls yesterday with open interest going up by 3,000 contracts in out of the money strikes, which would lead one to believe there was net new buying coming into the market. Option volatility also went up the last couple of days, with at the money Dec straddle vol at 25.5%, Feb atm straddle vol at 23%, and April atm straddle vol at 21.5%. Dow and S&P futures are trading lower this morning, which will likely have an adverse affect on cattle futures on the open. I would look for a $.10-$.30 lower open to live and feeder cattle futures this morning, with some support under the market being found at yesterday’s lows. Keep in mind we will be trading on regular hours today, of course we will be closed tomorrow, however cattle and grains will open Thursday at 5:00 pm and 6:00 pm respectively on regular overnight trading schedules. All markets (meats, grains, financials, stock index’s) will close at noon on Friday. Everyone Have a Happy Thanksgiving and Trade Well!!!
Any one wanting a more detailed report on the cattle and beef markets including fundamental, chart and technical analysis, plus spec/hedge recommendations for packers, processors, producers, and meat buyers feel free to contact me by phone or e-mail to set up a free trial.
There is risk in trading futures and options.
Have a Good Day,
Troy Vetterkind
Vetterkind Cattle Brokerage, LLC
Chicago Board of Trade
141 West Jackson Blvd.
Suite 1220A
Chicago, IL 60604
1-888-299-1477 Toll Free
1-312-896-2068 Direct
1-708-224-5985 Mobile
tvetterkind@linngroup.com
Reproduction or rebroadcast of any portion of this information is strictly prohibited without the written permission of the Linn Group, Inc. the information reflected herein is derived from sources believed to be reliable; however, this information is not guaranteed as to its accuracy or completeness. Opinions expressed are subject to change without notice. This material and any view expressed herein are provided for informational purposes only and should not be construed in any way as an inducement to buy or sell commodity futures or options contracts. The Linn Group and its officers, directors, employees and affiliates may take positions for their own accounts in contracts referred to herein. Trading futures involves risk of loss. Past performance is not indicative of future results.
Good Morning from the Chicago Board of Trade,
Cash Cattle Situation and Outlook:
The cash fed cattle market was untested yesterday with packer bids of $87 live and $1.37 dressed going unmatched against feedlot offering prices of $90-$92 live and $1.42-$1.44 dressed. All eye’s were on the futures market again yesterday to see if someone could get advantage over someone else in terms of buying or selling cattle in the cash market this week. I can tell you that couldn’t be a more fool hardy mistake to try and price cattle, whether it be on the buy side or the sell side, by what is going on in the futures market, as the futures are in complete disconnect with what is going on in the real world right now. I think both the packer and the cattle feeder realize fat cattle got a little too cheap last week, and I think both would agree that cattle will be higher this week. Perhaps not as high as the cattle feeder would like, but I think the packer realizes he needs some cattle to kill next week, and the market will be a buck or two higher from last week. This foolishness with cattle futures trading TICK for TICK with Dow and S&P futures should not have a bearing on this weeks cash cattle trade, and those trying to determine what the value of fat cattle should be this week by wringing their hands and watching what is going on in Chicago, should turn their quote screens off, and price the cattle by where the cutout is at, or by what kind of numbers they have for sale, or by what kind of meat sales they have to cover, because what is going on in the trading pit and on the screen at the CME, at least by yesterday’s standards, is by far price discovery. With that said, I think we should all look for a moderating in price declines and slight price improvement in cash fed, feeder, and slaughter cow values throughout the course of the next couple of weeks.
Cash Beef Situation and Outlook:
Yesterdays cattle kill was estimated at 128,000 head, which would be 1,000 head above last week and 3,000 head above the same day a year ago. The week-to-date kill now stands at 257,000 head, which would be 19,000 head above the same period a week ago with the industry looking for a 620,000 head production week. The boxed beef market was lower yesterday with the choice cutout closing $.94 lower to settle at $153.94 and the select cutout closing $.98 lower to settle at $144.01. Sales volume was good with 377 loads of beef sold (120.43 loads of choice fab cuts, 130.79 loads of select fab cuts, 40.41 loads of trim, 85.54 loads of grinds). The choice/select spread settled at $9.92 a gain of $.04.
The beef market was lower yesterday, as most attention from the buy side of the equation has turned to moving poultry product ahead of the Thanksgiving Day holiday. As such we saw packers discounting end meats along with loin product in order to spur some demand. The continued lack of export demand weighed on short rib values, with inside round and strip loin values reflecting reduced domestic buyer demand. Spot coarse ground items were under pressure yesterday as well, however processors looking beyond Thanksgiving Day were bidding slightly higher for cow 90’s and fed cattle 50s’. A lack of import business directly following the up coming holiday could be a cause of this. Still believe that we will come back from the holiday and see a modest up tick in beef buying interest from the retail and wholesale sector as they cover first of Dec feature adds and finish late year holiday celebration buying. Beyond that the beef market will be plagued by a modest increase in fed cattle production and waning demand after the holiday’s for beef until mid March. Some of this negativity towards the Jan/Feb beef market could be negated if a falling U.S. dollar and subsequent up tick in export demand were to develop. We also need to keep a close eye on the U.S. dollar to determine what level of beef imports we could be dealing with in the first quarter of 2009.
Futures Market Situation and Outlook:
December live cattle settled at $85.82 a loss of $.82, February live cattle settled at $87.32 a loss of $.27, and the April live cattle settled at $89.15 a loss of $.10. In the feeder cattle pit, January feeder cattle settled at $91.40, unch, March feeder cattle settled at $92.25, unch, and the April feeder cattle settled at $92.40 a loss of $.15. The reported CME feeder cattle index for 11/24/08 was $91.86 a loss of $.85.
Yesterdays live cattle volume saw 23,029 contracts trade in the pit and 10,770 contracts trade on Globex. Live cattle open interest declined 95 contracts to come in this morning at 213,883. Yesterday’s feeder cattle volume saw 1,535 contacts trade in the pit and 685 contracts trade on Globex. Feeder cattle open interest gained 361 contracts to come in this morning at 19,552.
The cattle futures market was pretty choppy and volatile again yesterday with part of the market thinking that Monday’s rally was overdone, part of the market thinking we should rally because the cash market will be higher this week, and part of the market trading cattle via the stock market. Despite all of the foolish intra-day movement, by the end of the day it did feel like there was some support under the market and we did manage to close back near our highs of the day. Given what we know about the near term fundamentals of the market (i.e. manageable fed cattle supplies and beef demand that isn’t all that bad and bound to improve after Thanksgiving), I still think we could see higher cattle futures prices going into the first couple weeks of December. I still want to target the $89-$90 area in Dec and Feb live cattle futures and the $94 area in Jan feeder cattle as near term price objectives. If by chance the cash beef and fed cattle markets were to exceed current expectations, which could easily happen as the current state of the beef market can probably support a low to mid $90’s fed cattle market, then we could see live cattle futures move $2-$4 beyond the above mentioned resistance levels. Option trading was active in the February live cattle calls yesterday with open interest going up by 3,000 contracts in out of the money strikes, which would lead one to believe there was net new buying coming into the market. Option volatility also went up the last couple of days, with at the money Dec straddle vol at 25.5%, Feb atm straddle vol at 23%, and April atm straddle vol at 21.5%. Dow and S&P futures are trading lower this morning, which will likely have an adverse affect on cattle futures on the open. I would look for a $.10-$.30 lower open to live and feeder cattle futures this morning, with some support under the market being found at yesterday’s lows. Keep in mind we will be trading on regular hours today, of course we will be closed tomorrow, however cattle and grains will open Thursday at 5:00 pm and 6:00 pm respectively on regular overnight trading schedules. All markets (meats, grains, financials, stock index’s) will close at noon on Friday. Everyone Have a Happy Thanksgiving and Trade Well!!!
Any one wanting a more detailed report on the cattle and beef markets including fundamental, chart and technical analysis, plus spec/hedge recommendations for packers, processors, producers, and meat buyers feel free to contact me by phone or e-mail to set up a free trial.
There is risk in trading futures and options.
Have a Good Day,
Troy Vetterkind
Vetterkind Cattle Brokerage, LLC
Chicago Board of Trade
141 West Jackson Blvd.
Suite 1220A
Chicago, IL 60604
1-888-299-1477 Toll Free
1-312-896-2068 Direct
1-708-224-5985 Mobile
tvetterkind@linngroup.com
Reproduction or rebroadcast of any portion of this information is strictly prohibited without the written permission of the Linn Group, Inc. the information reflected herein is derived from sources believed to be reliable; however, this information is not guaranteed as to its accuracy or completeness. Opinions expressed are subject to change without notice. This material and any view expressed herein are provided for informational purposes only and should not be construed in any way as an inducement to buy or sell commodity futures or options contracts. The Linn Group and its officers, directors, employees and affiliates may take positions for their own accounts in contracts referred to herein. Trading futures involves risk of loss. Past performance is not indicative of future results.
Tuesday, November 25, 2008
November 25, 2008
Good Morning from the Chicago Board of Trade,
Cash Cattle Situation and Outlook:
The cash feedlot trade was quiet yesterday as the day was spent assembling this week’s showlist. This weeks offering of fed cattle looks to be a little smaller in Nebraska and Kansas with steady numbers for sale in Texas. A look at last weeks sale volumes and prices shows Texas/OK/NM feedlots selling 37,055 head of fed cattle (48,762 previous week) for $87-$88 live. Kansas feedlots sold 27,504 head of fed cattle (23,427) for $87-$88 live and $1.39 dressed, Nebraska feedlots sold 49,079 head of fed cattle (63,173) for $88-$88.50 live and $1.39-$1.40 dressed, Colorado feedlots sold 7,045 head of fed cattle (3,361) for $87.50 live and $1.41 dressed, and Iowa/MN feedlots sold 26,394 head of fed cattle (36,318) for $86-$87 live and $1.38-$1.39 dressed. All weekly totals are negotiated cash and negotiated grid sales as reported to the USDA under MPR. As we can see weekly volumes are a little light when compared to the previous week, however there were less cattle for sale last week when compared to the previous week or year. Regardless, numbers for sale this week are certainly manageable and we shouldn’t start seeing a big build up in ready numbers of fed cattle until the last half of December. At that time we will start getting into the heavy yearling placements of cattle that came off of grass the last several months and those numbers should last until mid to late March. This increase in fed cattle marketing’s and the corresponding seasonal dip in beef demand after the holidays will likely be the catalyst for the last leg down in cash fed cattle prices until late summer 2009. This move down may or may not be exaggerated by recent weakness in Global economic conditions. For the rest of this week though, packers will be buying for a full production week next week and I am of the opinion they have forward beef sales to deliver on for the first of December, which will have them needing inventory. Last weeks cash market was overdone in my opinion so I am going to call for a steady to $1 higher fed cattle market for this week. There were no packer bids being tendered yesterday with most feedlots offering cattle at $90-$92 live and $1.43-$1.45 dressed.
A look around the auction market circuit shows fed cattle trading steady to modestly higher from last week’s steep declines. Beef fats in the Zumbrota, MN auction were bringing $82-$85 with the Holstein steers bringing $71-$73. Slaughter cows were lower with the cutter and boning utility cows bringing $35-$42 and the fatter cows bringing $43-$50. Yesterday Oklahoma City had 5,500 head of cattle on offer with early results at that sale being called $2-$4 lower, however it was said that buyer demand was picking up towards the end of the sale and prices were improving. 5 weight steers in OKC yesterday were bringing $95-$115, 6 weight steers were bringing $87-$101, 7 weight steers were bringing $86-$94, and the 8 weight steers were bringing $87-$92. I would expect to see wide price swings and large discounts on certain strings of feeder cattle depending on what the fat market does and what kind of health regimen the cattle have.
Cash Beef Situation and Outlook:
Yesterday’s cattle kill was estimated at 129,000 head, which would be 18,000 head above last week and 6,000 head above the same day a year ago. The USDA revised last Saturday’s kill up to 21,000 head, which will give us a new week-to-date total of 636,000 head. The boxed beef market was lower yesterday with the choice cutout closing $1.22 lower to settle at $154.88 and the select cutout closing $.24 lower to settle at $144.99. Sales volume was light with 181 loads of beef sold (45.26 loads of choice fab cuts, 53.96 loads of select fab cuts, 24.25 loads of trim, 57.53 loads of grinds). The choice/select spread settled at $9.89 a loss of $.98.
The beef market was lower yesterday as most in the industry turn their attention to the upcoming Thanksgiving holiday. Yesterday’s market saw most price discounts occurring within the chuck and round complex with lower values being reported on chuck rolls, knuckles, and inside/outside rounds. Short loins and tenderloin butts were also being marked lower along with select and no-roll PSMO’s. Coarse ground markets were lower yesterday, however there were a few instances of higher 90% cow beef transactions. All in all, I would expect to see a lower beef market for the balance of this week, however once we get Thanksgiving behind us, I think we could see a little appreciation in prices as buyers finish booking their end of year holiday needs and cover first of December retail adds.
Futures Market Situation and Outlook:
December live cattle settled at $86.65 a gain of $1.75, February live cattle settled at $87.60 a gain of $2.10, and the April live cattle settled at $89.25 a gain of $2.42. In the feeder cattle pit, January feeder cattle settled at $91.40 a gain of $2.00, March feeder cattle settled at $92.25 a gain of $2.10, and the April feeder cattle settled at $92.55 a gain of $2.10. The reported CME feeder cattle index for 11/21/08 was $92.71 a loss of $1.75.
Yesterdays live cattle volume saw 16,593 contracts trade in the pit and 8,371 contracts trade on Globex. Live cattle open interest declined 600 contracts to come in this morning at 214,024. Yesterday’s feeder cattle volume saw 1,940 contracts trade in the pit and 598 contracts trade on Globex. Feeder cattle open interest declined 900 contracts to come in this morning at 19,187.
Live and feeder cattle futures gapped open sharply higher yesterday and never looked back closing with triple digit gains in both pits. Higher stock and commodity markets along with a friendly cattle on feed report from Friday were catalysts for the higher trade. Overnight news shows the country of Qatar lifting a 5 year ban on U.S. beef imports and 3 of South Korea’s largest discount stores (E-mart, Homeplus, and Lottemart) will begin selling U.S. beef today after a 1 year ban due to spinal cord material being detected in a shipment of beef last year. Overnight Dow futures are up 150 points, the S & P is up 20 points, and the U.S Dollar Index is down $.86, all of which should help to support a higher open and trade in U.S. cattle futures markets. For the balance of this week, providing the Dow Jones doesn’t collapse, I think we can target the $89-$90 area for both December and February live cattle futures and the $94 area for January feeder cattle futures. Idea of a higher cash fed cattle market and the futures being extremely oversold would back up this type of trade. If the market is any good at all, we should be able to hold $84 in the Dec live, $85 in the Feb live, and $90 in the Jan feeders. Look for a $.10-$.20 higher open to live and feeder cattle futures and you could probably buy any $.25 break in the market today and risk the above mentioned support areas. Trade Well!!!
Any one wanting a more detailed report on the cattle and beef markets including fundamental, chart and technical analysis, plus spec/hedge recommendations for packers, processors, producers, and meat buyers feel free to contact me by phone or e-mail to set up a free trial.
There is risk in trading futures and options.
Have a Good Day,
Troy Vetterkind
Vetterkind Cattle Brokerage, LLC
Chicago Board of Trade
141 West Jackson Blvd.
Suite 1220A
Chicago, IL 60604
1-888-299-1477 Toll Free
1-312-896-2068 Direct
1-708-224-5985 Mobile
tvetterkind@linngroup.com
Reproduction or rebroadcast of any portion of this information is strictly prohibited without the written permission of the Linn Group, Inc. the information reflected herein is derived from sources believed to be reliable; however, this information is not guaranteed as to its accuracy or completeness. Opinions expressed are subject to change without notice. This material and any view expressed herein are provided for informational purposes only and should not be construed in any way as an inducement to buy or sell commodity futures or options contracts. The Linn Group and its officers, directors, employees and affiliates may take positions for their own accounts in contracts referred to herein. Trading futures involves risk of loss. Past performance is not indicative of future results.
Good Morning from the Chicago Board of Trade,
Cash Cattle Situation and Outlook:
The cash feedlot trade was quiet yesterday as the day was spent assembling this week’s showlist. This weeks offering of fed cattle looks to be a little smaller in Nebraska and Kansas with steady numbers for sale in Texas. A look at last weeks sale volumes and prices shows Texas/OK/NM feedlots selling 37,055 head of fed cattle (48,762 previous week) for $87-$88 live. Kansas feedlots sold 27,504 head of fed cattle (23,427) for $87-$88 live and $1.39 dressed, Nebraska feedlots sold 49,079 head of fed cattle (63,173) for $88-$88.50 live and $1.39-$1.40 dressed, Colorado feedlots sold 7,045 head of fed cattle (3,361) for $87.50 live and $1.41 dressed, and Iowa/MN feedlots sold 26,394 head of fed cattle (36,318) for $86-$87 live and $1.38-$1.39 dressed. All weekly totals are negotiated cash and negotiated grid sales as reported to the USDA under MPR. As we can see weekly volumes are a little light when compared to the previous week, however there were less cattle for sale last week when compared to the previous week or year. Regardless, numbers for sale this week are certainly manageable and we shouldn’t start seeing a big build up in ready numbers of fed cattle until the last half of December. At that time we will start getting into the heavy yearling placements of cattle that came off of grass the last several months and those numbers should last until mid to late March. This increase in fed cattle marketing’s and the corresponding seasonal dip in beef demand after the holidays will likely be the catalyst for the last leg down in cash fed cattle prices until late summer 2009. This move down may or may not be exaggerated by recent weakness in Global economic conditions. For the rest of this week though, packers will be buying for a full production week next week and I am of the opinion they have forward beef sales to deliver on for the first of December, which will have them needing inventory. Last weeks cash market was overdone in my opinion so I am going to call for a steady to $1 higher fed cattle market for this week. There were no packer bids being tendered yesterday with most feedlots offering cattle at $90-$92 live and $1.43-$1.45 dressed.
A look around the auction market circuit shows fed cattle trading steady to modestly higher from last week’s steep declines. Beef fats in the Zumbrota, MN auction were bringing $82-$85 with the Holstein steers bringing $71-$73. Slaughter cows were lower with the cutter and boning utility cows bringing $35-$42 and the fatter cows bringing $43-$50. Yesterday Oklahoma City had 5,500 head of cattle on offer with early results at that sale being called $2-$4 lower, however it was said that buyer demand was picking up towards the end of the sale and prices were improving. 5 weight steers in OKC yesterday were bringing $95-$115, 6 weight steers were bringing $87-$101, 7 weight steers were bringing $86-$94, and the 8 weight steers were bringing $87-$92. I would expect to see wide price swings and large discounts on certain strings of feeder cattle depending on what the fat market does and what kind of health regimen the cattle have.
Cash Beef Situation and Outlook:
Yesterday’s cattle kill was estimated at 129,000 head, which would be 18,000 head above last week and 6,000 head above the same day a year ago. The USDA revised last Saturday’s kill up to 21,000 head, which will give us a new week-to-date total of 636,000 head. The boxed beef market was lower yesterday with the choice cutout closing $1.22 lower to settle at $154.88 and the select cutout closing $.24 lower to settle at $144.99. Sales volume was light with 181 loads of beef sold (45.26 loads of choice fab cuts, 53.96 loads of select fab cuts, 24.25 loads of trim, 57.53 loads of grinds). The choice/select spread settled at $9.89 a loss of $.98.
The beef market was lower yesterday as most in the industry turn their attention to the upcoming Thanksgiving holiday. Yesterday’s market saw most price discounts occurring within the chuck and round complex with lower values being reported on chuck rolls, knuckles, and inside/outside rounds. Short loins and tenderloin butts were also being marked lower along with select and no-roll PSMO’s. Coarse ground markets were lower yesterday, however there were a few instances of higher 90% cow beef transactions. All in all, I would expect to see a lower beef market for the balance of this week, however once we get Thanksgiving behind us, I think we could see a little appreciation in prices as buyers finish booking their end of year holiday needs and cover first of December retail adds.
Futures Market Situation and Outlook:
December live cattle settled at $86.65 a gain of $1.75, February live cattle settled at $87.60 a gain of $2.10, and the April live cattle settled at $89.25 a gain of $2.42. In the feeder cattle pit, January feeder cattle settled at $91.40 a gain of $2.00, March feeder cattle settled at $92.25 a gain of $2.10, and the April feeder cattle settled at $92.55 a gain of $2.10. The reported CME feeder cattle index for 11/21/08 was $92.71 a loss of $1.75.
Yesterdays live cattle volume saw 16,593 contracts trade in the pit and 8,371 contracts trade on Globex. Live cattle open interest declined 600 contracts to come in this morning at 214,024. Yesterday’s feeder cattle volume saw 1,940 contracts trade in the pit and 598 contracts trade on Globex. Feeder cattle open interest declined 900 contracts to come in this morning at 19,187.
Live and feeder cattle futures gapped open sharply higher yesterday and never looked back closing with triple digit gains in both pits. Higher stock and commodity markets along with a friendly cattle on feed report from Friday were catalysts for the higher trade. Overnight news shows the country of Qatar lifting a 5 year ban on U.S. beef imports and 3 of South Korea’s largest discount stores (E-mart, Homeplus, and Lottemart) will begin selling U.S. beef today after a 1 year ban due to spinal cord material being detected in a shipment of beef last year. Overnight Dow futures are up 150 points, the S & P is up 20 points, and the U.S Dollar Index is down $.86, all of which should help to support a higher open and trade in U.S. cattle futures markets. For the balance of this week, providing the Dow Jones doesn’t collapse, I think we can target the $89-$90 area for both December and February live cattle futures and the $94 area for January feeder cattle futures. Idea of a higher cash fed cattle market and the futures being extremely oversold would back up this type of trade. If the market is any good at all, we should be able to hold $84 in the Dec live, $85 in the Feb live, and $90 in the Jan feeders. Look for a $.10-$.20 higher open to live and feeder cattle futures and you could probably buy any $.25 break in the market today and risk the above mentioned support areas. Trade Well!!!
Any one wanting a more detailed report on the cattle and beef markets including fundamental, chart and technical analysis, plus spec/hedge recommendations for packers, processors, producers, and meat buyers feel free to contact me by phone or e-mail to set up a free trial.
There is risk in trading futures and options.
Have a Good Day,
Troy Vetterkind
Vetterkind Cattle Brokerage, LLC
Chicago Board of Trade
141 West Jackson Blvd.
Suite 1220A
Chicago, IL 60604
1-888-299-1477 Toll Free
1-312-896-2068 Direct
1-708-224-5985 Mobile
tvetterkind@linngroup.com
Reproduction or rebroadcast of any portion of this information is strictly prohibited without the written permission of the Linn Group, Inc. the information reflected herein is derived from sources believed to be reliable; however, this information is not guaranteed as to its accuracy or completeness. Opinions expressed are subject to change without notice. This material and any view expressed herein are provided for informational purposes only and should not be construed in any way as an inducement to buy or sell commodity futures or options contracts. The Linn Group and its officers, directors, employees and affiliates may take positions for their own accounts in contracts referred to herein. Trading futures involves risk of loss. Past performance is not indicative of future results.
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