Vetterkind Cattle Marketing
2012-02-23T09:07

February 23, 2012



Cash Cattle Situation and Outlook:

Cash cattle markets were not tested yesterday although a handful of cattle did sell in Iowa for $126 live and some Holsteins at $1.96 dressed. The rest of the country was quiet with feedlots resisting packer bids of $126 live and $2.00 dressed. Most yards are priced at $132-$134 live and $2.08 plus dressed. We could see a little dressed business develop in the north today but assume that the bulk of cash business will wait until tomorrow and possibly not until after the release of the cattle on feed report. The kill is running 15,000 head below last week’s pace as packers continue to keep the breaks on production. There were 19 new deliveries against the Feb last night with no stoppers, which has the futures under pressure coming into this morning. Smaller showists and higher boxed beef markets should mean that cash fed cattle trade at least another dollar or two higher this week. Cash feeder cattle markets were mostly $1-$3 higher yesterday with slaughter cows taking on more of a steadier tone.

Cash Beef Situation and Outlook:
             
Boxed beef markets were higher again yesterday pretty much across the board on everything. Albeit though, on light spot volume. We are approaching all-time highs on the choice cutout at this $1.98 area so again it will be interesting to see how we handle this area. The beef markets are moving higher but it is certainly a forced trade that takes deep production cuts to do so. Cold storage numbers were released yesterday with beef stocks estimated at 482.070 mil lbs which would be 4% above the previous month and 5% above a year ago. Beef exports for the week of February 3-9, 2012 are as follows:

Beef:  Net sales of 13,200 MT for delivery in 2012 were primarily for Japan (3,600 MT), South Korea (2,900 MT), Mexico (1,500 MT), Canada (1,400 MT), and Vietnam (900 MT). Exports of 8,000 MT were mainly to South Korea (2,000 MT), Japan (1,200 MT), Mexico (1,200 MT), Canada (1,100 MT), and Vietnam (700 MT).

Futures Market Situation and Outlook:

Futures settled mixed yesterday in another low volume tired trade. Futures are lower coming into this morning due to the build in beef stocks in the cold storage report and 19 new deliveries against the February live contract. RJO and ADM delivered the 19 loads all in Worthing, SD with another RJO account receiving 13 loads, FC Stone receiving 2 loads, Stone Traders receiving 3 loads, and Penson receiving 1 load. There is no strong stopper here and assume that all 19 loads get redelivered tonight and then possibly demanded for at a dollar back. The spreads aren’t acting all that great this morning either so we’ll see if we can come back from a lower open today. Funds have a lot of long open interest in the cattle market, and in terms of the feeder cattle market almost half of the long open interest, so need to be careful of some long liquidation here. Keep an eye on your support areas to let the market tell you what it wants to do. That support comes in at $130 in April live and $157 in March feeders. Below that is $128 in April live and $155 in March feeders. A close below those lower support levels would be bearish in my opinion and could lead to a hefty round of long liquidation. Look for a $.25-$.50 lower open to cattle futures this morning. Trade Well!!!


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


Reproduction or rebroadcast of any portion of this information is strictly prohibited without the written permission of Vetterkind Cattle Brokerage, LLC. 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. Vetterkind Cattle Brokerage, LLC 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.










2012-02-22T08:53

February 22, 2012



Cash Cattle Situation and Outlook:

Cash fed cattle trading was at a standstill yesterday with the exception of the auction market trade and a few hundred head of cattle selling in Iowa for $127 live on the English cattle and $1.94-$1.96 dressed on some Holsteins. Cattle selling around the auction markets of the Corn Belt were bringing higher money with last week’s feedlot trade. The beef cattle topped out at $129-$130 and the Holsteins topped out at $119-$120. There were no packer bids being put out yesterday with bullish minded feedlot managers pricing cattle at $132-$134 live and $2.08 plus dressed. Another late week trade is expected as packer try to hold out for a break in the futures to at least buy cattle steady with last week. Smaller showlists this week and higher boxed beef prices has the market leaning towards another higher cash fed cattle trade. Whether that comes to fruition or not is still yet to be seen, packers do have a little inventory around them from last week and there is talk of cutting kills back to 605,000 head this week, which would be 10,000 head below last week. I think though they need to deliver on beef orders for the first of March, which means they may not get the opportunity to buy cattle cheaper and they may not cut kills as much as expected. Regardless, it takes a break in the futures in order for them to buy cattle cheaper this week and as long as April live stays above $130 that seems unlikely. Cash feeder cattle remain higher this week as do slaughter cows; however there were a few instances of a steadier cow market yesterday.

Cash Beef Situation and Outlook:
             
Beef markets were higher across the board yesterday as packer raise offering prices throughout the entire carcass to compensate for higher front-end live cattle costs. Items that weren’t performing the best last week like end meats and ground beef are improving the first part of this week, albeit on a little lighter volume. Middle meats are still the driving force in the boxed beef market with strong gains noted on most all loin cuts yesterday and mostly steady rib cuts. Boneless beef markets continue to move higher both domestic and imported as limited availability of domestic cows continues to push lean grinding beef prices higher. Export sales and forward domestic sales continued strong last week and that should remain the case at least for the first half of this week. So far the weekly kill is running 17,000 head behind last week’s pace and this should remain the case for most of the week.

Futures Market Situation and Outlook:

The cattle futures trade was rather subdued yesterday trading in a tight $.60-$.70 range in both front month live and feeder cattle as the market searches for direction at all-time highs. There were no deliveries against the February live contract last night. Estimates for the cattle on feed report were released this morning. The market is expecting on feed at 102.5%, placed during January at 98.8%, and marketed during January at 100.3%. The placement number will be the wild card in the report as estimates range from 97%-101%. I did hear that there was another pretty good migration of Mexican feeder cattle that came north during January.

Coming into this morning, outside markets are just a little lower as are grain markets. There is no other real market moving news around although weather forecasts show a major snow event will develop in western Nebraska/eastern Wyoming over the weekend and move northeast into Wisconsin/Michigan that could nip some of the cattle feeding areas of eastern Nebraska/western Iowa. The market felt a little tired yesterday and perhaps today is the day we go and test some downside support in futures until more is known about the outcome of this week’s cash cattle trade. Most in the industry are expecting a no worse than steady trade this week, but if we were to get a big flush in the futures that theory could get altered. For today there is minor resistance in April live cattle at $131.25-$131.50 and in March feeder cattle at $159. First levels of support show at $130 in April live cattle and below that stronger support at $128. As long as April live cattle hold above $128 it keeps the topside open to $133.50-$135. March feeder cattle support shows at $157 and below that $155 where a close below $155 would be considered bearish. Look for a $.20-$.30 lower open to live and feeder cattle futures this morning. Trade Well!!!

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


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.















2012-02-21T09:03

February 21, 2012



Cash Cattle Situation and Outlook:

  We left last week with a cash fed cattle market that trades very strong at $5-$6 higher on active movement. Cattle sold in TX for mostly $129-$129.50, in KS at mostly $128, in CO for $128-$129, and in NE/IA for mostly $127-$129.50/$2.02-$2.03. Packers bought increased supply in every feeding region except for KS. For the week, cash feeder cattle were mostly $2-$4 higher and slaughter cows were $3-$6 higher on limited receipts coming to market. We ended the week with a 616,000 head kill. Looking into this week, showlists are said to be smaller again in most feeding regions, which will be viewed as positive by the market for this week’s cash trade. There is no sense in bringing up packer margins because they obviously have forward beef orders as well as export orders to kill for coming into the first of March. They certainly need to kill for middle meats right now and this is likely to trump all. It does sound though like kills this week will be cut back to 605,000 head, so with the increase in numbers they bought last week maybe they can hold the market steady this week. Again, it will all depend on the futures because without a break in the futures market the cash market isn’t going to break. The futures are dictating price direction now not the cash. As long as April futures can hold above $128 by Thursday/Friday of this week the cash markets remain in a positive mode. Keep in mind Feb futures go off the board Wednesday. Cash feeder cattle markets are beginning the week stronger with Oklahoma City and Joplin, MO calling their respective markets $2-$4 higher. Slaughter cow markets were another $2-$3 higher yesterday and probably stay that way for most of the week.

Cash Beef Situation and Outlook:
             
Last week the boxed beef market was $3.88 higher on the choice cutout and $3.21 higher on the select cutout. Weekly sales volumes declined 5% with 998 total loads of beef sold through Thursday. The market is being supported right now by middle meat sales as a lot of the domestic retail buyers are trying to get an early jump on spring/summer grilling needs ahead of what many talk as a shortage of cattle towards the end of March/first of April. This along with lighter kills and continued active export business keeps beef cutouts trending higher even with record high retail beef prices. Last week’s beef production was 3% higher at 482.8 mil lbs due to the increased kill and higher trending carcass weights. Beef markets started the week higher again yesterday with the choice cutout up $1.36 at $191.81 and the select cutout up $2.48 at $188.38. Trade volumes were a little light with 181 loads of beef sold yesterday. If we see packers cut production back 10,000 head this week that should be supportive to beef prices given what is going on in the demand side of the market right now.

Futures Market Situation and Outlook:

Cattle futures blasted into new all-time record highs Friday on technical buying and higher cash markets. There were no deliveries posted against the Feb live contract on Friday. Futures have moved into some near term price targets and resistance levels basis April live in the lower $130’s and March feeders in the lower $160’s price levels. The April/June live cattle spread also got into near term price targets at $2.50 on Friday. This doesn’t mean that the market is over with; in fact we can still move another $2-$3 higher to the next resistance levels at $134-$135 in April live and $162-$165 in the March feeder cattle. We could possibly open a little lower this morning simply on profit taking from last week’s strong rally. First areas of support come into play at $130 in the April live contract and below that $128. If $128 can’t hold by late in the week the market could be setting up for a deeper correction down to the mid-lower $120’s. In the feeders, your first sign of weakness would be a trade under $157. And if we start to close the market back under $155 then we might have put some highs in for a while. Look for a $.20-$.30 lower open to live and feeder cattle futures this morning. Trade Well!!!

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


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.








2012-02-15T08:56

February 15, 2012



Cash Cattle Situation and Outlook:

There was no reported cash fed cattle trade yesterday with the exception of a few cattle that sold in Iowa for $123/$1.95, not enough volume thought for an accurate market test. Futures continue to move higher bolstered by smaller showlists and ideas beef business will develop for the first of March that packers will have to kill for. Offering prices on this week’s showlists have moved higher in the wake of the higher futures board to $127 plus live and $2.04 plus dressed. There is a lot of talk this week about how showlists could be smaller given the last couple weeks of lighter kills and increasing carcass weights. Which is a valid point, but are there cattle being held back and hedged in April at a $3 premium to be marketed in March? Certainly the incentive would be there for two weeks. Regardless, unless the board falls apart on Thursday or Friday, like it has the last two week’s it certainly looks as though packers are going to have to pay a couple dollars higher for cattle this week whether they like it or not. Feeder cattle and slaughter cow markets remain mostly $2 higher on limited receipts across the country.

Cash Beef Situation and Outlook:
             
Boxed beef markets were higher again yesterday on moderate trade volumes. Middle meats are in demand right now with both the loin and the rib primal leading the gains in the cutout. End meats held mostly to higher yesterday. Boneless markets were mixed to slightly lower as was ground beef. We talked yesterday about imported boneless beef pricing into grinding formulations better than domestic product given the lack of slaughter cows in the U.S. This had domestic boneless markets trading steady to instances of lower and it was said there were a few more offerings of imported beef in the market place yesterday. Look for further gains in the boxed beef market going into the first of March as retailers book middles for grilling season earlier than normal this year and we see a little business being done for first of March feature ads of end meats.

Futures Market Situation and Outlook:

Cattle futures continued higher yesterday on ideas of higher fed cattle markets this week due to smaller showlists. Gains in the boxed beef market helped as well. Spreads act well with April/June settling at $1.37 yesterday. As mentioned above though, with Feb cattle trading at almost a $3 discount to April with two weeks before expiration there is incentive to keep cattle off showlists and hedge them in April for March delivery. This could be a spread to watch as if we continue this discount in the Feb it could be awful supportive to the cash market this week and next. Either that or Feb could gain hard on April in the next couple of weeks. Regardless, the technical continue to point higher with April live holding above $128 and March feeders holding above $154. The door is certainly open for a trade up to the lower $130’s basis April if we can get above old highs at $129.75. So we’re going to continue to chop around up at these price levels until we can either break out to the topside or we start to break down below support. Again, with April live cattle above $128 you’re doing positive things in the market and keep an eye on the April/June live spread for flat price direction. As long as that spread is trading above $1.00 it keeps topside to the market open. Producers, keep using near term strength in the futures to get your May-Dec marketing’s hedged via put options or put/call strategies. I put a chart in today of August feeder cattle vs. December live cattle below. This could be a big trade at some point in time as the economics of feeders vs. fats doesn’t work and at some point this has to correct, maybe not now but at some point it will. We’ll try to keep you posted. Look for a $.10-$.20 higher open to live and feeder cattle this morning. Trade Well!!!

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


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.
2012-02-14T08:39

February 14, 2012



Cash Cattle Situation and Outlook:

The cash fed cattle market was pretty quiet yesterday with the exception of a few clean up deals in Iowa at $123 live and $1.96 dressed. Showlists are coming in smaller this week in all major feeding states. The Texas list is said to be down 6,000 head, Kansas down 9,000 head, Colorado down 500 head, and Nebraska down 5,500 head. This was the main reason for the futures rally today along with higher boxed beef markets. There were no packer bids being published yesterday with feedlots beginning the week pricing cattle at $126 plus and $2.04 plus with another late week trade expected. Estimates for this week’s slaughter are running around 610,000 head. Packers did buy a few more cattle in KS and NE last week but bought less numbers in TX/CO/IA. The way the futures acted yesterday, talk of higher beef markets for most of the week, and smaller showlists expectations are for a steady/higher cash fed cattle trade for this week. And I would probably have to agree, numbers of fed cattle available to the market are really light in the north, especially in the Midwest where fat cattle auctions were extremely light yesterday. And I think there is a little beef business around that packers have to kill for. Certainly export business has been robust the last week or so but also I think they will have to kill cattle to fill domestic beef orders that need to deliver for the first of March. So for now we’ll look for a firmer market until something comes along to suggest otherwise. Cash feeder cattle perked up a bit yesterday with most of the major auctions in Oklahoma City and Joplin, MO calling their sales $1-$2 higher yesterday on good demand. Sales were a little light in OKC/Joplin yesterday because of some snow that moved through the area Sunday night. I would probably look for a firmer trend to the cash feeder market for most of the week. Slaughter cow markets continue to trade at higher money on very limited supplies of cows coming to market. This has most cows selling at auction bringing $1.60-$1.70 dressed across the country. Look for this to continue for the balance of the week as well.

Cash Beef Situation and Outlook:
             
Boxed beef markets were higher across the board yesterday. Middle meats continue to be the driving force here with all grades of ribs and loins trading at higher money yesterday. End meats firmed up a little though as well yesterday on some renewed domestic buying after fairly decent beef clearance over the weekend. Boneless beef markets were firmer yesterday on both domestic and imported product. One thing to note here is that the recent rally in domestic cow 90’s has imported 90’s working into grinding formulations better coming into this week. In all there appears to be a little beef business around and with the last couple weeks of lighter kills this should keep beef markets trading steady/higher for most of this week.

Futures Market Situation and Outlook:

Cattle futures came storming right back yesterday erasing all of the losses from the late sell off on Friday. We talked about April live cattle having some support at $125-$126 last week and apparently the low on Friday of $126.62 was good enough. Futures rallied yesterday on talk of lower showists and ideas of better beef business in the coming weeks. Pretty choppy volatile trade in this $126-$129 basis the April live cattle contract, up a dollar one day, down a dollar the next day, etc. Makes it hard to keep a position on for more than a day and forces you to be more and more of a short term trader if trying to protect equity. Regardless, the futures market looks positive from a technical standpoint with April live closing back above $128 and March feeder cattle above $154. As outlined above, numbers of fat cattle available for sale this week are light, especially in the auction market trade and this is probably going to be the main driving force for a steady/higher cash trade this week. Packers did buy a few more cash cattle last week, but took in less contract/formula cattle. There are plans to expand this week’s kill a little to 610,000 head but if they were to want or need to kill more than that the market could get pretty explosive, so we’ll have to keep an eye on daily kills. For now, you’re trading the market from a positive perspective on trade above $128 in April live and $154 in March feeders. If by chance we can break April live cattle out of the recent range above $129.75 I think we see a pretty quick move up to $131-$132 and possibly higher. As mentioned previously, we’re likely going to make some sort of spring high in the market within the next 6-8 weeks. It is my opinion, and my opinion only, that the highs we make this spring will be the highs for probably the rest of the year and very likely a long time to come. Producers will want to continue to use any near term strength in the futures market during that time to get hedge protection on expected production from spring through the balance of the year via option strategies. Call or email for ideas. Look for a $.10-$.20 higher open to live and feeder cattle futures. Trade Well!!!

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


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.

2012-02-10T08:13

February 10, 2012



Cash Cattle Situation and Outlook:

Slaughter Cattle Markets- Fed Cattle (feedlots)

Region
Negotiated Cash Price
Daily Volume
WTD Volume
Last Week Negotiated Cash
Basis
Last Week Cash Volume
Last week Contract/Formula Volume
Texas/Oklahoma/
New Mexico
None

1,822
WTD/$123
Even/Negative $1-$2
18,710
+3,058
63,003
+5,966
Kansas
None

93
WTD/$123
$1.98

Even/Negative $1-$2
34,339
+10,790
52,525
+1,983
Colorado
None



WTD/$123
$1.99
Even/Negative $1-$2
8,452
+4,894

Nebraska
WTD/$1.99

897
WTD/$123-$124
$1.98
Even/Negative $1-$2
44,274
+13,804

45,453
+9,925
Iowa/Minnesota
$122/$1.95
WTD/$124
$1.95

664
3,602
WTD/$123-$124
$1.96-$1.98

Even/Positive $1-$2
36,774
+26,527

Holsteins
$1.86 IA


$1.86 IA
$112-$113 KS
$115 TX





Slaughter Cattle Markets-slaughter cows/fed cattle (auctions)

Market/Date
Cow-Canner/Cutter
Cow-Boners
Cows-Breakers
Cows-  Premium White
Bulls
Fat Cattle
Choice/Select
Holstein Fats
Central Direct-plant delivered 2.9.12
$1.50-$1.70 dressed


$1.48-$1.67 dressed
$1.36-$1.55 dressed
$1.43-$1.70
dressed
$1.54-$1.77
dressed


East Coast Direct-plant delivered 2.9.12
$1.48-$1.63 dressed


$1.44-$1.61 dressed
1.30-$1.52 dressed
$1.54-$1.57
$1.54-$1.75 dressed


Zumbrota, MN 2.6.12
$69-$75
$76-$86


$82-$95
$117-$124
$112.75-$120
Lexington, KY 2.6.12
$67-$72
$73-$78
$73-$76

$91-$99


Amarillo, TX 2.7.12
$74-$76.50
$80-$85
$81.50

$86.50-$91


Bloomington, WI 2.7.11
$65-$74
$75-$85


$90-$100
$123.50-$127.50
$114-$118
Worthing, SD
2.8.12
$67-$75
$75-$83
$77-$83

$88
$121-$123.50
$113.60-$115
Tama, IA
2.8.12
$42.50-$55
$56-$64.50
$65-$69
$70-$74.50
$79-$88
$121-$130

$109.50-$119.75
San Angelo, TX 2.9.11

$69-$78
$78-$84.50

$90-$93


 Sheldon, IA 2.9.11





$119-$122
$112-$115




The only reported fed cattle trade yesterday was approximately 600 head of fats that reportedly sold in Iowa for $122 live and $1.95 dressed. The rest of feedlot country was at a standoff as packer bids of $121 live and $1.95 dressed failed to generate any interest from bullish feedlot managers offering cattle at $126-$127 live and $2.03-$2.04 dressed. Volatility continued in the futures market yesterday as early strength gave way to a sharp selloff late in the session, which keeps confusion in the marketplace on how cattle should be priced this week. That said, even with the break in futures yesterday spot February’s settlement would still suggest a steady/higher trade with last week’s $123/$1.98 market. The boxed beef market settled a little lower again yesterday, which isn’t helping packer margins much but with the kill still running 6,000 head above last week’s pace there may be some export business packers are killing for. I would say that if the futures hold right around where they settled yesterday we should be able to see a higher market today, if not then perhaps packers get by purchasing cattle at mostly steady. Yesterday’s feeder cattle market was mostly steady to instances of higher depending on what auction you were at. There is still some good demand for feeder cattle, however the market isn’t as hot as it was back in the middle of January. We saw cattle feeders come back from the holidays with a strong appetite for owning cattle and January feedlot placements are said to be up 1%-2% vs. last January and I think we are just seeing cattle feeders not chasing the market so hard right now. Slaughter cow markets were mostly steady/higher yesterday as cow runs have tightened up recently.
        


Cash Beef Situation and Outlook:


The boxed beef market settled mixed to lower yesterday as we saw more of a steadier trend come into the middle meats markets as opposed to higher earlier in the week. Here too, I don’t think this is a sign of a big break coming in beef prices, rather steadier weighted averages on rib/loin cuts were being factored into the cutout as opposed to higher early in the week. Chuck and round meat continue to trade steady to instances of lower on limited purchases from domestic buyers. Demand from the retail/wholesale sector of the domestic beef market remains rather lackluster, but I think export business is picking up some of this slack. We did see export sales and shipments pick up considerably last week with sales of 20,300 MT and shipments of 22,300 MT, the latter of which was a record high for this week in history. Japan and Mexico accounted for the biggest brunt of this business. Boneless beef markets were mostly higher yesterday on both domestic and imported product and I would look for this to continue into next week.

   Futures Market Situation and Outlook:



Cattle Options:

CME Feeder Cattle Index: (if having trouble viewing this or any part of this document increase the magnification on your browser above)

Live/Feeder Cattle Spreads:




Live Cattle Deliveries:

Cattle futures held pretty strong all day yesterday until about noon when a meltdown in the grain complex triggered a moderate selloff in the cattle trade. We had a monthly USDA supply/demand report released by the government yesterday, which actually came in pretty neutral to the grain markets. USDA came up with an 11/12 corn ending stocks number of 801 mil bu. vs estimates of 797 mil, bean carryout was 275 mil bu vs estimates of 269 mil, and wheat ending stocks came in at 845 mil bu vs estimates of 868 mil. As expected South American bean production was lowered about 2 MMT in both Brazil and Argentina with Brazilian corn production left unch at 61 MMT and Argentine corn production was lowered 4 MMT to 22 MMT, a little deeper than expected.

In the meat numbers, USDA raised 2012 beef production 150 mil lbs to 25.225 bil on larger first quarter cow slaughter and heavier fed cattle carcass weights. Imports were left unchanged at 2.090 bil lbs with exports lowered 10 mil to 2.765 bil lbs. Pork production was raised 45 mil to 23.254 bil lbs with imports unch at 785 mil and exports unch at 5.115 bil. Total poultry production was lowered 386 mil to 42.006 bil mainly due to lower broiler production because of lower bird weights and continued year over year decreases in egg sets. Poultry exports were raised 60 mil to 7.800 bil.

In all the S&D numbers were a non-event for all markets yesterday, but we did rally pretty sharp in the grains early before collapsing late, which is partly why I think the cattle broke late. But by the closing bell of the pit trade at 1:00 pm the cattle did what they were supposed to and closed above $128 in April live, $155 in March feeders, and the April/June live spread closed above $1.00. Europe is melting down again this morning over the Greece soap opera and this has the outside markets lower with follow through weakness in the overnight grain markets and cattle/hogs showing just moderate losses as of 7 am.

So we can probably open a little lower this morning but whether or not we stay lower is yet to be seen as the cattle market doesn’t really show any signs of rolling over yet. Yea, there is some talk around about lighter kills backing up cattle with heavier carcass weights, but I don’t think it is a serious problem yet. We talked late last week about breaking down under $128 would open the door for a quick test of $125-$126 support and that would still be valid but I think a $125-$126 trade in April live cattle would be a worst case scenario for the time being. And we maybe need to shell the market out quick to clean up some weak longs, but it’s very likely we haven’t seen the highs in the market for the year yet. That said, I think the highs in the market are going to come sometime between the first of March to the end of April, and then I think that’s it for the rest of the year. So this is why I would encourage producers to get a plan in place for when we do rally into a spring high to use that futures price strength to get the balance of your yearly production hedged. You can use futures or options, I have strategies or both but as I keep mentioning, the options are still relatively cheap volatility wise and by rights you should have your hedges in the options right now. Especially if you had to hedge cattle right now for spring/summer delivery because most breakevens are above where futures are trading so in that scenario you would almost need to use options so as to not lock in a loss. Look for a $.25-$.50 lower open in cattle futures this morning. Trade Well!!!













































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


Reproduction or rebroadcast of any portion of this information is strictly prohibited without the written permission of Vetterkind Cattle Brokerage, LLC. 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. Vetterkind Cattle Brokerage, LLC 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.
2012-02-09T09:00

February 9, 2012



Cash Cattle Situation and Outlook:

Cash fed cattle trading remains at a standstill with the best bids of $121 live going unmatched against feeder offering prices of $126-$127 live and $2.03-$2.05. Futures are pricing a dollar higher cash market for this week but packers are going to try to avoid this. Yesterday’s kill was estimated at 120,000 head, which would be 4,000 head below the same day a week ago but the week-to-date kill is still running 8,000 head above last week’s wtd. This either means that kills are going to get cut back towards the end of the week or there is some business around that packers have to kill for, which would justify a higher cash trade. The beef has been higher all week but spot sales volumes remain light and probably won’t pick up until late in the week. Unless the futures break hard today or tomorrow, which seems unlikely at this point, it looks like a steady/higher cash fed cattle trade is in the cards for this week. Cash feeder cattle markets are steady higher coming into midweek. Demand for feeders is still strong, however buyers do seem like they are wanting to take it easy and trying to buy cattle a little more in line with breakevens. Slaughter cow markets are trading higher on limited cow runs.

Cash Beef Situation and Outlook:
             
The beef market was higher yesterday with the reoccurring theme of stronger middle meats dictating price action. Spot sales volumes remain a little on the light side, but it does seem like there is some business being done forward. The undertone for end meats is a little sloppy yet as retail buyers don’t want to take on any extra inventory at current price levels. Boneless beef markets are mixed with higher cow 90’s and lower fed cattle 50’s. The 90’s are higher on lighter cow kills and the 50’s are steady/softer on lighter grinding demand. I would still look for a firmer tone to the cash beef market going into next week with middle meat procurement coming into center stage. Beef exports for the week of January 27-February 2, 2012 are as follows:

Beef:  Net sales of 20,300 MT for delivery in 2012 were primarily for Mexico (4,600 MT), Russia (3,300 MT), South Korea (3,300 MT), Canada (2,600 MT), and Egypt (1,800 MT).  Exports of 22,300 MT were mainly to Mexico (5,000 MT), South Korea (3,100 MT), Japan (3,000 MT), Canada (2,500 MT), and Egypt (1,800 MT).

Futures Market Situation and Outlook:

Cattle futures settled mixed yesterday but with a bullish bias. The bull spreads were performers yesterday with Feb/April and April/June leading the charge higher on good volume. Reasons for the advance include a cattle kill running 8,000 head above last week, no deliveries last night, and ideas of beef business being done. Last week’s export sales rebounded to over 20,000 MT. Packer margins are still in tough shape, but I don’t think that is going to matter as the market or “powers that be” smell the blood in the water and any hint that there is beef business being done whether it’s here or abroad and these guys are going to persistently run the futures higher and hurt those that are not hedged or don’t have coverage in the cash. So with that said, you have to view the futures market from the long side providing April live cattle hold above $128 and the April/June live spread holds above $1.00. It seems like the feeder market has calmed down a little bit in the cash and this is likely going to temper gains in the futures. We maybe just trade sideways in the feeder futures for a minute as opposed to rallying very hard or breaking very hard. That said a March feeder cattle contract above $154 is still a positive market. Look for a mixed open this morning (i.e. $.10 higher/$.10 lower). Trade Well!!!

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


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.
2012-02-08T09:12

February 8, 2012



Cash Cattle Situation and Outlook:

Running way behind this morning, so comments will be short and sweet. No cash cattle trade yesterday with no packer bids and feedlots offering cattle at $125-$126/$2.00-$2.03. Watch the kill this week, so far it’s running 12,000 head above last week at 251,000 head. Talk Monday was for a 600,000 head kill but if it starts coming in better than that it’s an indication packers need cattle to fill beef orders, although they did buy a bit more inventory last week. The bigger kill and deliveries being stopped were the reasons for the futures rally yesterday and if we hold those gains today and tomorrow you can make a case for a steady/higher trade late in the week. Cash feeders are steady/higher with slaughter cows fully $2 higher as of yesterday.

Cash Beef Situation and Outlook:
             
The beef market was higher yesterday albeit on lighter trade volumes. Buyers contend that consumer demand isn’t enough to go chase beef yet and most still buy for their most immediate needs. The question could be if there is some export business around that packers need to kill for and that is why it will be important to keep an eye on daily slaughters. Boneless beef markets are higher on limited cow kills and lower fed cattle slaughters. Look for steady/higher boxed beef trade going into the end of the week.

Futures Market Situation and Outlook:

Cattle futures rallied yesterday on stronger kills and deliveries being stopped. Of the 15 cattle deliveries on Monday, RJO stopped 8 Monday night, FC Stone retendered 7 loads, which were demanded for by ADM. Regardless, this is why the market rallied and from a technical standpoint the market looks good again with April back above $128 and March feeders above $155. We need to hold these levels by the close today and tomorrow in order to see a higher cash trade and keep the door open for further gains to $132 in April live and $160 in March feeders. Keep an eye on the $128 level in April live and $155 in March feeders plus watch the April/June live spread. It acted really good yesterday as it made a low of $.22 and closed at $.62. If you we continue to see follow through buying in the spread today it would indicate further strength in flat price. Look for a $.20-$.30 higher open to live and feeder futures this morning. Trade Well!!!

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


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.

2012-02-07T09:04

February 7, 2012



Cash Cattle Situation and Outlook:

Fed cattle trading was confined to a few clean up deals from last week in Iowa where 800 head of cattle sold for $124 live and $1.94 dressed. The rest of cattle feeding country spent the day putting showlists together with bids and offers on this week’s business poorly defined. Numbers of cattle being offered for sale this week are a little smaller in all feeding states. Last week’s cattle kill, while light, was revised higher to 592,000 head. The way it sounds we’re looking at a 600,000 head kill for this week. So unless packers feel the need to step up production hours, they won’t need just a whole lot of cattle this week as they bought a little extra inventory last week. I tend to think they are going to keep the brakes on production for another week or two until they have to start delivering on forward sales that they are making this week. I believe I saw somewhere yesterday that Tyson was only going to kill 32 hours for the balance of this month. Unless we get another run up in futures prices late this week packers may have a chance to buy cattle at steady money. Look for packers to start out bidding $118-$119 live and $1.92-$1.94 dressed with feeders offering cattle at $125/$2.00 plus. Cash feeder cattle markets were mostly steady yesterday. Slaughter cow markets were steady higher.

Cash Beef Situation and Outlook:
             

Pretty much everything was higher in the cash beef complex yesterday as a combination of lighter kills along with a little better retail clearance of beef over the weekend gave packers the ability to sell beef higher. I would probably look for further gains in the beef market for the balance of the week. As mentioned last week, middle meat sales are improving as buyers are securing inventory ahead of spring grilling needs. The lighter kills and improving domestic demand along with increased export interest towards the end of the month should be supportive to end meats.

Futures Market Situation and Outlook:

Futures settled mixed yesterday, higher in the live cattle and lower in the feeder cattle. Futures tried to rally throughout the middle of the day on talk of lower showlists, however settled off those highs going into the close on talk of possible deliveries against the Feb live contract. Last night the CME reported 15 deliveries against the Feb contract, 10 in Dodge City, KS and 5 in Tulia, TX. R. J. O’Brien delivered all 15 loads with another RJO account receiving 8 loads and FC Stone receiving 7 loads. We are likely going to spend the next couple of day’s chopping around at these price levels in the futures until more is known about this week’s cash fed cattle outcome. That said, the minor technical breakdown in the market late last week would suggest we could move a little lower to relieve over bought conditions in the market. I would expect April live cattle to find very good buyer support at $125-$126 and March feeder cattle to have good support at $151-$152 on any type of near term break in the market. It would take a close back above $128 in April live cattle and $155 in March feeder cattle to negate some of last week’s bearishness. Look for a mixed open (i.e. $.10 higher/$.10 lower) in cattle futures this morning. Trade Well!!!

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


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.
2012-02-03T09:05

February 3, 2012



Cash Cattle Situation and Outlook:

The cash fed cattle trade remained light as of yesterday. There were a few cattle reportedly sold in Iowa yesterday in a range of $123-$127, which would be steady/higher with last week. There are a few bids in TX this morning at $122-$123, which leads me to believe the cash trade will be no worse than steady this week, and probably a dollar higher. Look for trade to develop this morning in all feeding areas at that type of money. Cash feeder cattle remain higher as do slaughter cows and this should carry into next week.

Cash Beef Situation and Outlook:
             

  The beef trade was mostly higher yesterday as steady/higher middle meats offset slight losses in the end meats. It appears as though there is a few accounts beginning to shop for their spring steak needs and this along with lighter kills should support boxed beef prices going into next week. Boneless beef markets are higher with lighter cow runs said to be supporting that market despite a slightly softer demand scenario from the foodservice sector. Look for higher beef markets early next week.

Futures Market Situation and Outlook:

Cattle futures continue to be supported by fund buying, technical considerations, ideas of higher cash cattle markets for this week, and a winter storm rolling through CO/KS/NE this morning. Support for April live cattle remains at $128 and in March feeder cattle at $154. I don’t see us breaking that support today. Topside to the market shows at $132 in April live cattle and $160 in March feeder cattle, so as long as we hold the above mentioned support levels trade it that way. April/June live cattle spread is looking good at the $.50 level basis the April and you can buy that spread risking a close under even money, looking for a trade up to $2.50. As mentioned previously, we are likely going to price a spring high in the market within the next 4-5 weeks. Producers, use this strength in the futures to get put options bought on production for the balance of the year. Look for a $.10-$.20 higher open to cattle futures. Trade Well!!!

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


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.

2012-01-31T09:00

January 31, 2012



Cash Cattle Situation and Outlook:

  The cash fed cattle market was typically slow for a Monday with bids and offers poorly defined. In fact there were no packer bids published yesterday with a few feedlots pricing cattle at $125-$127 live and $2.03-$2.05 dressed. Showlists are coming in slightly larger compared to last week, however not as large as one would expect given the slow feedlots sales volumes last week. Packers continue to keep slaughter schedules curtailed with yesterday’s 114,000 kill with most of the industry looking for a weekly slaughter around 610,000 head.  I probably wouldn’t expect to see much business until Thursday at the earliest, however packers would find themselves short bought should they need to increase production schedules by the end of the week. Much would depend on late week beef demand in that regard, as that market continues to exhibit sloppy undertones as of yesterday. Beef markets were lower on light volumes and demand yesterday. As of right now, I would look for packers to try and save some money this week by buying fed cattle another dollar cheaper this week. The cash feeder cattle market was mixed yesterday, however a continued firm tone exists. Oklahoma City was calling their yearling feeder steer market a little lower, however calves were still called higher as well as most all other feeder markets. Slaughter cow markets were mixed as well, with some sales $1-$2 higher and some sales $1-$2 lower depending on what part of the country you were in.


Cash Beef Situation and Outlook:
             

The cash beef market began the week under some pressure again with weekend meat clearance and demand to start the week described as light. Choice rib, round, and loin primals all needed some sort of discounting yesterday as did ground beef and boneless cow beef. To help offset some of this was slightly higher pricing on select/no-roll middle meats as well as 50% fed cattle trim. 50’s are finding some support from the lower fed cattle kills. There remains a lot of talk and concern about higher priced beef shutting off some domestic retail demand. The lower kills should start to stabilize the cutout trade by the middle of the week.

Futures Market Situation and Outlook:

Results of USDA’s Cattle Inventory Report:

             USDA's                                                                Average        Range
               estimates                                                            of analysts'  of analysts'
                                                                                            estimates     estimates
Total US Cattle Inventory Jan 1 At 90.769 M Head
Total US Jan 1 Cattle Inventory 98% of 2011                       98.5       97.4- 99.1
2011 Calf Crop 35.313 M Head; 99% of 2010                      99.1       98.4- 99.5
39.112 M Cows/Heifers Calved; 98% of 2011                      98.1       96.4- 99.2
29.883 M Beef Cows/Heifers Calved; 97% of 2011             97.5       95.5- 98.8
9.230 M Dairy Cows/Heifers Calved; 101% of 2011          100.2       98.8-100.9
Inventory Of Heifers 500 Pounds/Over 99% of 2011           99.6       98.3-101.1
5.212 M Heifers For Beef Cow Replacement; 101% of '11   97.8       96.0- 99.8
4.527 M Heifers For Milk Cow Replacement; 99% of '11   101.8      100.7-103.1
9.649 M Other Heifers Kept for Feeding; 98% of '11            99.4       96.8-101.8
Inventory Of Steers 500 Pounds/Over 98% of 2011              98.7       97.7- 99.4
Inventory Of Bulls 500 Pounds/Over 95% of 2011               97.5       95.2- 99.4
Inventory Of Calves Under 500 Pounds 97% of 2011          97.9       97.2- 99.3


Cattle futures settled lower yesterday in response to the lower outside markets and lower cash fed cattle markets last week. Coming into this morning we see a turnaround in the outside as well as the grain markets, which is helping to support a higher cattle futures trade early today. Whether or not we can hold onto a higher opening trade is still in question as near term cash beef and fat cattle markets are carrying somewhat of a negative tone. $127.50 will be a big support area for April live cattle again today. We went down and tested that price area early yesterday morning before rebounding into the afternoon. If we start to trade below $127.50 again today and close below it I think that would be bearish for trade for the balance of the week and we could finally see a correction lower in the market. These same support areas hold true for March feeder cattle at $153.50 today. Look for a $.10-$.20 higher open to live and feeder cattle this morning. Trade Well!!!

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


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.
2012-01-30T09:01

January 30, 2012



Cash Cattle Situation and Outlook:


A light fed cattle trade developed late Friday afternoon at $2 lower money. TX/OK/KS feedlots sold cattle for $124 live and in the north cattle sold in NE/IA for mostly $124 live and $1.98-$2.00 dressed. Because of the late nature of the trade the USDA didn’t catch the market in their afternoon report, so we’ll have to wait until everything is counted and reported this morning to get a handle on trade volumes, but suffice it to say volumes were light. Packers are getting serious about cutting kills with last week’s production coming in at 608,000 head, which would be 20,000 head below the previous week. I would look for lighter kills and a lower market again this week as packers get their margins back in line. For the week cash feeder cattle were mainly $2-$4 higher, but we could see the market take on more of a steadier tone if the cash fed cattle market trades lower again this week. Slaughter cow markets were mostly $2 higher last week and I would expect that type of market this week.

Cash Beef Situation and Outlook:
             
For the week choice boxed beef gained $3.17 and select boxed beef gained $4.63 on very light spot sales volumes. The market started out firmer to begin the week, however beef prices did start to show signs of weakness again towards the end of the week as buyers are very reluctant to take on extra inventory at these historically high price levels. Those that need to do business do so on a “hand to mouth” basis and I would look for a similar trading scenario again this week. Lighter kills should help to keep some support under the boxed beef trade; however I would continue to look for a softer undertone to the market with light volumes again.


Futures Market Situation and Outlook:

               USDA's                                                                Average        Range
               estimates                                                            of analysts'  of analysts'
                                                                                            estimates     estimates
Total US Cattle Inventory Jan 1 At 90.769 M Head
Total US Jan 1 Cattle Inventory 98% of 2011                       98.5       97.4- 99.1
2011 Calf Crop 35.313 M Head; 99% of 2010                      99.1       98.4- 99.5
39.112 M Cows/Heifers Calved; 98% of 2011                      98.1       96.4- 99.2
29.883 M Beef Cows/Heifers Calved; 97% of 2011             97.5       95.5- 98.8
9.230 M Dairy Cows/Heifers Calved; 101% of 2011          100.2       98.8-100.9
Inventory Of Heifers 500 Pounds/Over 99% of 2011           99.6       98.3-101.1
5.212 M Heifers For Beef Cow Replacement; 101% of '11   97.8       96.0- 99.8
4.527 M Heifers For Milk Cow Replacement; 99% of '11   101.8      100.7-103.1
9.649 M Other Heifers Kept for Feeding; 98% of '11            99.4       96.8-101.8
Inventory Of Steers 500 Pounds/Over 98% of 2011              98.7       97.7- 99.4
Inventory Of Bulls 500 Pounds/Over 95% of 2011               97.5       95.2- 99.4
Inventory Of Calves Under 500 Pounds 97% of 2011          97.9       97.2- 99.3



Cattle futures are going to start out lower this morning in response to lower outside markets and last week’s lower cash trade. The cattle inventory report released on Friday came in pretty much as expected with one surprise being the number of beef heifer replacements coming in at 5.212 mil head, which was 101% of a year ago with analysts expecting a 98% number. It shows that the industry is in the beginning fazes of rebuilding the nations cow herd, and while it won’t have much of an impact this year it will next year. For the balance of this year we still have to deal with the lowest cattle inventory since 1952. Beef cow numbers were off 3% from last year due to the southern drought forcing ranchers to liquidate and the number of feeder cattle outside feedlots available for placement was off 4%, all of which is going to be very supply friendly for the balance of this year. In the near term though, packers are going to work very hard to get their margins back in line and that means buying cattle cheaper for a couple weeks and that will be the overriding factor to the futures this week and likely next. Look for at least a $.25-$.50 lower open this morning and I would expect to see further price erosion for the balance of the trading week. Trade Well!!!


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


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.
2012-01-27T09:01

January 27, 2012



Cash Cattle Situation and Outlook:


There was no reported fed cattle trading yesterday as the standoff between packers bidding $121-$122 live and $1.98-$2.00 dressed and feedlots priced at $128-$120 live and $2.06-$2.05 dressed continues. We should at least see some moderate business develop today as packers line up near term kill needs for next week. There was a lot of talk from beef processors yesterday about cutting kills further due to imploding margins and that they will have enough cattle around them going into February to fund those light production schedules. This was a big factor in the collapse in cattle futures yesterday. Also the beef market started to look a little tired again yesterday so all of this combined may mean that a steady at best cash trade may be in the cards for this week. It’s all about the futures, so if see further erosion on the board today it will take some pressure off the packer. If packers are truly going to get serious about cutting kills and closing some plants for a couple day’s we’re probably going to see a break in cash prices for a couple weeks. The cash feeder cattle market was mostly higher again yesterday, however there were a few instances where we saw a couple auction markets calling their yearling feeder steer market a little lower. This would be some of the first lower quotes in the cash feeder cattle market we have seen in several weeks. Again, if by chance we see packers get their margins back in line by buying fat cattle cheaper for a week or two we could very easily see the cash feeder cattle market take a breather from recent gains. The slaughter cow market remained higher yesterday by $2-$4 cwt.

Cash Beef Situation and Outlook:
             
Boxed beef markets turned mixed yesterday as spot domestic demand remains slow. Packers once again had to discount meat by the end of the day in order to pique buyer interest. Some of this discounting started to show back up in the round complex as well as the chuck and the rib of choice quality grades. Ground beef and select grades of middles and end meats held together better than choice beef. It feels as though the beef market could be steady/lower going into the first half of next week.


Futures Market Situation and Outlook:

Estimates for the cattle inventory report are as follows:
                    Average           Range 
                                       of estimates    of estimates

  All cattle & calves                      98.5         97.4- 99.1
  Annual calf crop                         99.1         98.4- 99.5

 Total cows/heifers that have calved       98.1         96.4- 99.2
  beef cows/heifers that have calved       97.5         95.5- 98.8
  milk cows/heifers that have calved      100.2         98.8-100.9
 Heifers 500 pounds and over               99.6         98.3-101.1
  beef replacement heifers                 97.8         96.0- 99.8
  milk replacement heifers                101.8        100.7-103.1
  other heifers                            99.4         96.8-101.8
 Steers 500 pounds and over                98.7         97.7- 99.4
 Bulls 500 pounds and over                 97.5         95.2- 99.4
 Calves under 500 pounds                   97.9         97.2- 99.3


                                        All cattle        Annual
                                        and calves       calf crop

   Allendale Inc                           98.7            98.6
   Cattle Hedging                          97.4            99.3
   Frontier Risk Management                99.1            99.5
   Linn Group                              98.4            98.4
   Livestock Marketing Info Center         98.4            99.1
   Ron Plain, University Of Missouri       98.7            99.2
   Vaught Futures Insights                 98.8            99.5



Cattle futures settled sharply lower yesterday on talk from beef packers about cutting kills further and that they would have enough contract/formula around them to fund the lighter production schedules. So this along with some profit taking after the recent run up in the futures market helped to fuel the selloff yesterday. It will be interesting to see if we see follow through to the downside again today. Accounts will be getting positions squared up ahead of tonight’s cattle inventory report, too which the estimates are above. Providing there are no surprises in the report, which normally on inventory reports there are none, we should have a lot of the report already priced in for the time being. Again, $125 will be a big number for February live cattle today as a weekly close above that level is bullish for the market going into next week and a close below would be considered negative in my opinion. If yesterday was nothing more than a correction in a continuing bull run in cattle futures, than we should be able to see Feb live close above $125, April live close above $128, and March feeder cattle close above $154 today. If we can’t do that we could be in store for further downside in the market starting next week. Look for a mixed open to cattle futures today, either side of unchanged. Trade Well!!!

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


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.
2012-01-26T09:10

January 26, 2012



Cash Cattle Situation and Outlook:

The cash fed cattle market was dormant in the feedlots yesterday with the only trades reported to the USDA was a load of Holsteins in Iowa for $1.96 dressed. In the auction markets fed cattle sold steady to $.50-$1 higher with cattle in Yankton and Worthing, SD bringing $124-$126 live and in Tama, IA $125-$130, with tops of $133. Most of the feeder cattle auctions yesterday like Dodge City, KS, Kearney, NE, and El Reno, OK saw their markets trade $4-$6 higher on the cattle weighing under 600 lbs and the cattle weighing over 600 lbs bringing steady-$4 higher. Slaughter cow markets were mostly another $2 higher yesterday as well.

With the futures continuing to exhibit strength the cash feedlot trade looks to be no worse than steady with last week’s $126 live and $2.02-$2.05 dressed. The beef market has been trading higher this week helping packer margins, albeit on light trade volumes. Packers are having to kill cattle to fill domestic beef orders coming into the first of February as well as an increase in export orders. This morning’s export sales report showed sales of 19,600 MT for the week of Jan 13-19, which is a pretty decent increase from the past couple of weeks. In all I would look for a steady/firm tone to the entire cash cattle complex, fats, feeders, and cows for the balance of the week.


Cash Beef Situation and Outlook:
             
The boxed beef market showed some solid gains yesterday as business for quick ship of product picked up yesterday. End meats led the charge higher with ribs holding steady and strips showing a little strength. Ground beef continues to be purchased for Super Bowl features but it was said that foodservice demand was a little light. Load counts picked up yesterday to 255 loads, which is somewhat encouraging. Beef export sales for the week of January 13-19, 2012 are as follows:

Beef:  Net sales of 19,600 MT for delivery in 2012 were primarily for Mexico (5,100 MT), Japan (3,000 MT), Canada (3,000 MT), Vietnam (2,500 MT), and South Korea (1,800 MT).  Exports of 15,100 MT were mainly to Mexico (3,000 MT), South Korea (2,700 MT), Japan (2,200 MT), Canada (2,200 MT), and Vietnam (2,100 MT).


Futures Market Situation and Outlook:

Estimates for the cattle inventory report are as follows:
                    Average           Range 
                                       of estimates    of estimates

  All cattle & calves                      98.5         97.4- 99.1
  Annual calf crop                         99.1         98.4- 99.5

 Total cows/heifers that have calved       98.1         96.4- 99.2
  beef cows/heifers that have calved       97.5         95.5- 98.8
  milk cows/heifers that have calved      100.2         98.8-100.9
 Heifers 500 pounds and over               99.6         98.3-101.1
  beef replacement heifers                 97.8         96.0- 99.8
  milk replacement heifers                101.8        100.7-103.1
  other heifers                            99.4         96.8-101.8
 Steers 500 pounds and over                98.7         97.7- 99.4
 Bulls 500 pounds and over                 97.5         95.2- 99.4
 Calves under 500 pounds                   97.9         97.2- 99.3


                                        All cattle        Annual
                                        and calves       calf crop

   Allendale Inc                           98.7            98.6
   Cattle Hedging                          97.4            99.3
   Frontier Risk Management                99.1            99.5
   Linn Group                              98.4            98.4
   Livestock Marketing Info Center         98.4            99.1
   Ron Plain, University Of Missouri       98.7            99.2
   Vaught Futures Insights                 98.8            99.5



Cattle futures settled steady/higher yesterday after a lower initial start. There remains buying underneath the market on any type of break this week, likely linked to fund buying ahead of the cattle inventory due out tomorrow. Estimates for the report are above and certainly paint a friendly supply picture going forward. Keep in mind though that the report has been widely publicized  and there has been a lot of buying going into it so one maybe needs to be careful of a “buy the rumor/sell the fact” type scenario early next week after the report is released. In the meantime, I wouldn’t expect to see too big of a break in the futures until we get the numbers behind us and if anything we could rally more. It’s my opinion that Feb live should hold $125, April live should hold $128, and March feeders should hold $153 by tomorrow if the market is any good. April live will find some resistance at contract highs of $129.75. March feeders closed on a new contract high of $155 yesterday, which is not bearish. Look for a $.20-$.30 lower open this morning with buying likely to surface again on any small break. Trade Well!!!

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


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.

2012-01-25T09:09

January 25, 2012



Cash Cattle Situation and Outlook:

The cash fed cattle market was at a complete standstill yesterday with no packer bids being published and feedlots pricing a slightly larger showlist offering at $128/$2.06-$2.08. Trade isn’t expected until late in the week as packers work from last week’s buy and hope for a break in the futures to try to buy cattle at steady/lower money compared to last week. The latter may be hard to come by as futures continue to show strength and rally due to fund buying ahead of what is expected to be a bullish cattle inventory report on Friday. In the meantime expect kills to remain cut back as beef processors try to manage margins from the supply side. So far this week, the kill is running 14,000 head below last week’s pace with most of the industry looking for a 625,000 head production week and some even talking lighter than that. While the beef market has been trading higher since the first of the week, spot sales volumes are disappointing so packers will be killing only what they need to cover previously booked forward sales and whatever export business is around. It will be all about the futures market in terms of the cash trade this week, if we can get a break, which right now doesn’t seem likely, we could be mostly steady, if not look for a steady/higher trade. Yesterday’s auction market action saw mostly $2-$4 higher on both feeder cattle and slaughter cows on good demand and light offering’s. Most of the northern plains 700 lbs. feeder steers were bringing from the mid-$150’s to lower $160’s and the 800 lbs. steers bringing from the mid-upper $140’s to lower $150’s. A lot of the slaughter cows I saw yesterday brought from the upper $70’s to lower $80’s, which equates to $1.56-$1.60 dressed standing in the ring.

Cash Beef Situation and Outlook:
             
Boxed beef cutouts increased in value yesterday albeit on light trade volumes. Most all primal sections of the beef carcass were higher yesterday with the exception of choice ribs and choice/select briskets and plates. End meats and ground beef were the best performers for the beef packer yesterday as demand for these items was said to have improved going into the first of February and the Super Bowl. Overall though spot demand remains rather lackluster and packers are mostly killing for beef orders that were sold back towards the first of the month. With kill begin cutback and some moderate export business around I would still expect to see cutout values advance for the balance of this week but sales volumes will likely remain light.

Futures Market Situation and Outlook:

Cattle futures had another strong day yesterday on renewed fund buying ahead of Friday’s cattle inventory report. Estimates for the report are as follows:
                    Average           Range 
                                       of estimates    of estimates

  All cattle & calves                      98.5         97.4- 99.1
  Annual calf crop                         99.1         98.4- 99.5

 Total cows/heifers that have calved       98.1         96.4- 99.2
  beef cows/heifers that have calved       97.5         95.5- 98.8
  milk cows/heifers that have calved      100.2         98.8-100.9
 Heifers 500 pounds and over               99.6         98.3-101.1
  beef replacement heifers                 97.8         96.0- 99.8
  milk replacement heifers                101.8        100.7-103.1
  other heifers                            99.4         96.8-101.8
 Steers 500 pounds and over                98.7         97.7- 99.4
 Bulls 500 pounds and over                 97.5         95.2- 99.4
 Calves under 500 pounds                   97.9         97.2- 99.3


                                        All cattle        Annual
                                        and calves       calf crop

   Allendale Inc                           98.7            98.6
   Cattle Hedging                          97.4            99.3
   Frontier Risk Management                99.1            99.5
   Linn Group                              98.4            98.4
   Livestock Marketing Info Center         98.4            99.1
   Ron Plain, University Of Missouri       98.7            99.2
   Vaught Futures Insights                 98.8            99.5

Clearly the report will be considered friendly from a supply standpoint, however it has been well publicized and there shouldn’t be too many surprises. But I think this is the main catalyst behind the last couple weeks of futures trade as funds load up on long positions ahead of the report. There was certainly buying around the market yesterday and that carried into the overnight trade, where at one point around 7:30 pm there was 300 stuff offered in Feb live cattle at $125.80-$125.82 with another 150 at $125.90 and another 100 at $126.00. By 8:00 pm all of the 300 at 80-82 had been taken out at which point they cancelled the 90’s and the evens. Point being, someone had no problem buying the futures on the overnight at new all-time highs, which leads me to believe that there will be buying underneath the market until we get past this report. Again, as I have been talking all week, option volatility remains very cheap considering the price levels we are at in both live and feeder cattle futures and I strongly suggest producers take advantage of this scenario to establish a floor price under estimated production all the way out to the end of the year. I don’t care if you’re bullish or bearish option premium shouldn’t be this cheap considering the price level we are at in live and feeder cattle futures. Look for a $.10-$.20 lower open to cattle futures this morning. Trade Well!!!

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


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.


2012-01-24T09:08

January 24, 2012



Cash Cattle Situation and Outlook:


It was a typically slow Monday in the cattle business yesterday with showlist distribution the main feature of the day. Numbers of fed cattle being offered for sale this week look to be a little larger around the country with the exception of Nebraska. Overall though showlists aren’t that burdensome. There were no packer bids as of yesterday with feedlots priced at $128 live and $2.06-$2.08 dressed. Kill look like they are going to get cut back to around 625,000 head this week as packer attempt to once again mend their worst margin scenario in several years. The beef market was higher yesterday on moderate movement, which will help packers to a certain degree but they need to put a lot more money on the cutout than what we saw yesterday. The futures were soft early in the session yesterday, however managed to recover going into the close yesterday and continue to exhibit strength coming into this morning, which if this keeps up would paint the picture for another round of steady/higher cash trades this week. I wouldn’t expect to see much business until Thursday or Friday with the futures being the main determining factor in this week’s cash fed cattle market. Cash feeder cattle began the week higher yesterday with most all the major sales like Joplin, MO, Oklahoma City, and the Missouri sales calling their markets $2-$4 higher. Slaughter cow markets were mostly $1-$2 higher yesterday as well. Look for this cash strength to continue for the balance of the week.

Cash Beef Situation and Outlook:
             
Boxed beef markets were higher yesterday as packers raised offering prices sharply to compensate for higher front end costs of live cattle. Gains were posted throughout the entire beef carcass yesterday with those needing to do business to start the week having no choice but to pay the higher market. Weekend beef clearance was rated as average, which led to moderate fill-in business. There is some domestic forward business from the last couple of weeks that packers have to deliver on coming into the first of February and this is likely one reason they have to chase the fat cattle market right now. That and there is likely some export business around as well. I would look for a mostly higher boxed beef trade for the balance of this week.

Futures Market Situation and Outlook:

The cattle futures trade acted soft all day yesterday until the last 15 minutes of trade when someone came in and bought the market. This strength is still prevalent coming into this morning as we saw the cattle and hogs start to firm up around 4:00 am this morning after European markets opened up. This leads me to believe that its fund buying pushing the market higher. In the last three week’s you can’t pick up a newspaper, watch a television news broadcast, or read a newswire like Dow Jones, Reuters, etc. without someone talking about cattle numbers and how short we are going to be this year and how high beef prices are going to go. And I think this is going to be the main driving force behind how the futures market will perform going forward into spring. Right now it won’t matter about how much money packers are losing or how much money feeder cattle lose being placed into forward feeding periods I think the market will be dictated by news stories and technical, all of which have a bullish bias to them. Also supporting futures this week will be position squaring ahead of Friday’s cattle inventory report. The report is expected to show total cattle numbers down 1%, total cow numbers down 1%, calf crop down 2%, and feeder cattle outside feedlots available for placement down 3%.

So we can certainly go higher in the near term even though economics of the market may not dictate. One thing I find very interesting in the marketplace right now is how cheap option volatility is. Most live and feeder cattle volatilities are running 12%-13%, which from a historical perspective is cheap, but when you add in never seen before historically high futures prices, option volatility becomes incredibly cheap in my opinion. Never before have we seen feeder cattle at these price levels, yet I was able to buy feeder puts two strikes out of the money for 11.5%. The point being, whether you are bullish or bearish you should be buying options towards your flat price bias because they are cheap from a historical standpoint. This would especially be true for the producer who has livestock to market in forward time slots as put options are providing an incredibly cheap insurance policy right now.

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


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.






2012-01-23T09:12

January 23, 2012



Cash Cattle Situation and Outlook:

We left last week with a cash fed cattle market that trades $2-$4 higher at $126-$127 live in the south and $126-$128 live and $2.02-$2.05 dressed in the north on moderate sales volumes. Packers were once again forced to pay higher money for near term inventory needs thanks to a higher futures market. It is also reported that one of the major packers is short bought on inventory and doesn’t have much coverage in the futures market and the rest of the group is trying to put a squeeze on him. Another factor that could be pushing cash prices higher despite the worst processing margins in years is that there is some export business  that needs to be covered and packers are trying to get out in front of one another to make sure they have cattle to kill, however can’t confirm this as of late last week. Regardless of what’s going on the market is $5-$6 higher in the last two weeks and it will be interesting to see if we can keep the rally going this week.

The beef market was under pressure all last week until Friday when we finally saw some stabilization. As a result packers pulled hours out of production with the weekly kill coming in at 628,000 head, compared to 653,000 the previous week. We will likely see production kept under wraps this week as packers mend horrible margins of $80-$100 per head losses. As of right now I would expect to see some light carryover of cattle from last week giving us a slightly larger showlist for this week. The beef market should stabilize down here and trade modestly higher for most of the week, however likely not enough to drastically improve margins. I wasn’t very impressed with how the futures closed on Friday and there are no surprises in Friday’s cattle on feed report, which could give us some early week pressure in the futures and take some of the pressure off packers. For right now until more is known about showlists and early week beef demand I’ll call this weeks fed cattle trade steady/lower, but if packers would want to come out and start bidding $121 or $122 for cattle early this week there is probably something up and steady/lower could change to steady/higher.

The cash feeder cattle market remained higher last week by about $3 cwt. Again, I think we are starting to see some light heifer retention around the country that is taking away from an already dwindling supply of feeder. This has a mentality around the cash feeder cattle market of “owning inventory no matter what the cost” as cattle placed last week pencil $40-$60 per head losses depending on feed costs. Don’t see anything in the immediate future to slow the progress of the cash feeder cattle unless we were to see a break in the cash fat cattle market or the futures. Slaughter cow markets were steady/higher last week and should start out that way this week.


Cash Beef Situation and Outlook:
             
For the week choice boxed beef lost $5.21 and select boxed beef lost $1.92 on slightly improved sales volume compared to the week before. Most all primal sections of the beef carcass lost value last week with the exception of select/no-roll ribs and loins as well as choice flanks. The market did seem to start finding some support late in the week though, as packer did a good job the last couple of weeks moving problem inventory began raising offering prices to cover sharply higher front end costs of beef. I would expect most of the major domestic beef buyers to remain “hand to mouth” in their near term procurement, however those that do need to do near term spot business will be met with higher asking prices and subsequent higher markets.

Futures Market Situation and Outlook:

The cattle on feed report Friday is regarded as mostly neutral. On feed Jan 1, was 11.861 mil head or 103% of a year ago with the market expecting 103%. Placements during the month of December were 1.683 mil head or 94% of a year ago with the market expecting 94%. Marketing’s during the month of December came in at 1.796 mil head or 98% or a year ago with the market expecting 97%. If anything the marketing number could be a little positive for the market as it came in 1% above most analysts’ expectations; however I think the market is going to focus more on what the cash fat cattle market does this week as opposed to what the on feed report said.

I wasn’t very impressed with the way the futures closed on Friday, and quite actually if it wasn’t for the cattle on feed report we probably would have closed lower than we did. With a $126-$127 live market in TX/KS Feb live should have closed limit up on Friday if we were to expect another $1-$2 higher in this week’s cash market. Considering no surprises in the cattle on feed report I can’t help but think perhaps we see a small pull back in the cattle futures trade this week. I would look for last week’s highs in the futures market to contain the topside of the trade for a week or two. Look for a $.10-$.20 higher open to cattle futures this morning. Trade Well!!!

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.
2012-01-18T09:02

January 18, 2012



Cash Cattle Situation and Outlook:


Cash cattle markets were quiet yesterday with the exception of a little Holstein business reported to the USDA in TX at $1.86 dressed and in Iowa at $115 live. There were no packer bids published as of yesterday afternoon with most feedlots pricing smaller showlists at $125 live in the south and $2.03-$2.05 dressed in the north. A late week trade is expected at mostly steady/higher money provided futures can hold onto early week gains. Beef markets remain under pressure; however it is thought that prices there could stabilize by the end of the week. The cash feeder cattle market continues to show strength with most markets yesterday being called steady/$2 higher. Demand for feeders remains active as buyers scramble to get inventory around them. Slaughter cow markets are mostly $2 to instances of $4 higher.

Cash Beef Situation and Outlook:
             
Boxed beef markets continued under pressure yesterday as domestic buyer demand is lackluster.  It was reported that many wholesale buyers are more than comfortable with their current inventory positions, especially on end meats and buy only on a hand to mouth basis. This is prompting packers to offer discounts, some deep in nature, to attract buying interest. This, to an extent is working some as total beef load counts approached 300 yesterday. Ground beef markets were a little lower yesterday, which pressured some of the thin meats, but boneless cow beef was higher yesterday. Middle meats continue lower with not much of a story there. One bright note to the beef market is that a lot of the negotiations on end meats in forward delivery slots takes place at higher money than the current spot market. I would probably look for the boxed beef market to show some signs of stabilization towards the end of this week. The weekly kill is running 3,000 head above last week’s pace with the industry looking for a slight pull back in production to the 645,000 head level.

Futures Market Situation and Outlook:

As expected cattle futures opened higher and traded that way most of the session as the market priced in the better than expected cash fed cattle market last week. Feeder cattle opened and traded higher early in the session as well, but ran into some light profit taking going into the close. Technically, we left a gap in the Feb cattle from $122.80-$123.12 that could be filled sometime today or tomorrow, however as long as we can hold Feb live above $122 the market still holds upside potential. Big overhead resistance in Feb live cattle comes into play at $125, which would be highs on the weekly chart from back in November. Taking that out on a weekly closing basis opens the door for a run to $130 in the spot month and $125 in the deferred months, April in particular. In the feeder cattle, solid support shows at $150 basis the March contract. We talked yesterday about a Fibonacci number on the weekly chart at $153.40, that January probably doesn’t go to but the March did yesterday and that happened to be where March rally was capped yesterday. Not saying to get bearish the feeders by any means, but if you’re using technical to trade the feeder market the $153.40 area should be a number to watch in the March contract. Look for a mixed open to the cattle market this morning, a little softer in the fat cattle and a little higher in the feeder cattle. Trade Well!!!

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.
2012-01-13T09:03

January 13, 2012



Cash Cattle Situation and Outlook:

The cash cattle market remained in slow gear yesterday as packer bids of $118 live and $1.91-$1.93 dressed go unmatched against feedlot offering prices of $123 plus live and $1.96-$1.98 dressed. There were a few cattle reportedly sold in Iowa at $1.98 dressed late yesterday but numbers were too light to establish a market. Assume these cattle were high grading and went to one of the regional Omaha packers. Despite slumping beef values and sagging packer margins the futures market actually has been holding together relatively well in terms of spot February and so far this week Feb live is pricing a steady cattle market with last week (i.e. $120-$121 live and $1.96-$1.98 dressed). Showlist are a little smaller around the county and packers seem to want to fund 640,000 head type kills so perhaps this means the cash trade will be no worse than steady this week. I would say that as long as we can hold February live above $120 by the close today that we will see a steady fed cattle market this week. The cash feeder cattle market remains supported coming into the end of the week and that should remain the case going into next week. Slaughter cow markets continue to trade firmer.


Cash Beef Situation and Outlook:
             
The boxed beef market was lower yesterday with the choice cutout closing $2.22 lower at $186.75 and the select cutout closing $1.03 lower to settle at $177.15. Sales volumes picked up with 275 total loads of beef sold. Slow domestic beef demand continues to weigh on the boxed beef market and forces packers to keep discounting meat. This was especially true within the round and the chuck primal yesterday. Ribs and loin were slightly lower yesterday as well and in fact about the only items that did trade steady/higher were plates, flanks, and boneless beef. Ground beef held mostly steady yesterday but there is some demand around for ground product, which supports grinding material. Packers seem to be doing a pretty good job of cleaning up problem inventory this week and I wouldn’t doubt that the recent discounting in the beef complex, end meats in particular attracts some buying interest next week, perhaps from foreign buyers.

Futures Market Situation and Outlook:
Cattle futures settled mixed yesterday with strength noted in the feeder market and weakness in the live market. All of this was directly attributed to the corn trade yesterday after the USDA gave us a bearish crop report. We took premium out of the deferred live cattle months and of course the sharply lower corn trade was supportive to the feeder trade. That said, I thought February live cattle held up quite well yesterday as we spent most of the day trading higher and gaining on the back months, which historically is a little bullish when the fronts gain on the backs. It could have nothing more than unwinding of bear spreads after the last couple of weeks given the recent corn rally, but Feb seems to holding together coming into this morning indicating that we are going to see a mostly steady fed cattle trade this week. Feb live cattle are stuck in a $120-$122 trading range as are March feeder cattle from $150-$152. It takes a close outside of these parameters to extend in the direction of the breakout next week. My idea would be that we breakout to the downside as I still remain a little bearish the fat cattle and beef markets going into the end of the month. Keep in mind the CME will be closed Monday for the MLK holiday. Look for a $.10-$.20 lower open to cattle this morning. Trade Well!!!


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


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.


2012-01-12T08:41

January 12, 2012



Cash Cattle Situation and Outlook:

The cash fed cattle market was pretty much at a standstill again yesterday in the feedlots. The fat cattle that have been selling in the country, all in the auction markets are trading about $2-$3 lower than their respective sales last week, likely keeping pace with the lower feedlot trade. Packer buyers were bidding no better than $118 live in the south and $1.90-$1.91 dressed in the north with feedlots continuing to price lower showlists at $123 plus live and $1.98 plus dressed. The futures market showed some strength around midday yesterday, but failed going into the close as more word of lower beef markets is a concern to the market. The boxed beef market was lower once again yesterday and this keeps packers trying to hold out for a break in the board so they can try to buy cattle cheaper. A steady at best fed cattle trade remains the best call for this week’s market with the lower beef market being the biggest hindrance to the cattle market. Packers are going to ramp the kill back up to around 640,000 head this week and with lower showlists that would be the only positive in the market for this week.

The cash feeder cattle trade remains on fire with sharply higher prices being paid on all types of replacement cattle. As mentioned earlier in the week I think we are seeing producers come in after the first of the year and not only retaining heifers on the ranch but also in the auction markets buying heifers to take back home to make cows out of them and this along extra capacity in the feeding sector is pushing replacement feedlot animals sharply higher. Looking around the country yesterday at the USDA wtd average reports, feeder steers in El Reno, OK weighing 668 lbs brought $154.05, steers in Dodge City, KS weighing 759 lbs brought $148.78, and in Kearny, NE steers weighing 826 lbs brought $147.39. Plugging these cattle into a breakeven calculator and of course there are variations in ration costs from region to region, but trying to be conservative with costs of gain all these cattle breakeven anywhere from $130 to $135 cwt. during midsummer using today’s corn market. We have a major crop production, supply/demand, and stocks report today that could have a huge impact on the price direction of corn for the next several months, which will have to be watched very closely.

Slaughter cow markets firmed up a couple of dollars yesterday on strength in the boneless beef market.


Cash Beef Situation and Outlook:
             
The boxed beef market was lower again yesterday on continued lackluster demand in both the domestic and export markets. Packers had a hard time moving beef during the holiday’s with 540,000 head kills and seem to be having an even harder time selling beef now that kills are going up to 640,000 head. The discounting is prevalent throughout the rib and loin primals as well as the chuck and the round. However, the lower market did attract the attention of some buyers as we saw sales volumes pick up on chuck rolls, knuckles, and inside rounds. There was talk of meat backing up in the coolers earlier in the week, but if packers continue to manage inventory by discounting problem cuts, they may get problem inventory cleaned up by next week, which would help to stabilize the cutout trade. Boneless beef and ground beef markets continue to perform for packers and traded higher yesterday along with many of the thin meat items that are going into the grind. I would continue to look for further weakness in the beef complex until the middle of next week.

Futures Market Situation and Outlook:

It was a typical day in the cattle futures market as we opened lower and traded that way until midsession when we rallied only to break again going into the close. I think the main feature dictating trade since last week is that we see selling come into the market on the open and close because of the Goldman Roll of Feb longs forward, which pressures the market. But most day’s we get a midsession rally as hedge funds come back into the market with first of year buying. Open interest in live cattle has increased 15,638 contracts and in feeder cattle it’s increased 2,865 contracts since the first of the year indicating new money coming into the market. Regardless the futures remain stuck in a $120-$122 range in Feb live and $150-$152 in March feeder cattle. But that could all change today with all eyes on the USDA final crop production report and supply/demand and quarterly grain stocks.

Initial reaction to the USDA reports is bearish. Final corn production for 11/12 is estimated at 12.358 bil bu vs. estimates of 12.265 using a 147.2 yield. This has ending stocks at 846 mil bu vs. estimates of 749 mil. The big number was the quarterly grain stocks number, which came in at 9.642 bil bu vs. estimates of 9.391 bil bu. In the bean numbers, bean production was estimated at 3.056 bil bu vs. estimates of 3.048 bil bu using a yield of 41.5. This puts bean ending stocks at 275 mil bu vs. estimates of 233. Quarterly bean stocks on Dec 1 were 2.366 bil bu vs. estimates of 2.324. Wheat numbers were  a little bearish as well as the government gave us increases in winter wheat seeding and an increase in world wheat ending stocks. South American corn and bean production was lowered slightly due to dry weather but world ending stocks in corn were higher than average estimates by 5 mil tons. Bottom line, the market was expecting a bullish report and came in long, and the numbers are neutral to bearish and I would expect to see a washout today. Early calls are for corn down $.20-$.30 with beans and wheat down $.10-$.20.

A quick look at the beef numbers from the supply/demand report shows the government raising  both 11/12 beef production slightly. 2011 beef production was raised 11 mil to 26.297 bil lbs and 2012 beef production was raised 5 mil to 25.075 bil lbs. 11/12 imports were left unchanged at 2.052 bil  and 2.090 bil respectively. 11/12 exports were left unchanged at 2.779 bil and 2.775 bil lbs respectively. Pork production for both 2011/2012 was raised slightly but poultry production was lowered slightly. In all neutral numbers for the meats.

Early calls on the markets are for a sharply lower trade in the grains, which likely drags live cattle lower and pushes feeders higher at least on the open. We could see a two sided trade in the cattle today, however at the end of the day I think we are going to be lower in the fats because of near term cash beef fundamentals. I think they are going to wash some premium out of deferred live cattle today, which could limit rally potential in the feeder futures despite what could be a limit down day in corn. Trade Well!!!

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


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.

2012-01-11T08:58

January 11, 2012



Cash Cattle Situation and Outlook:

Cash fed cattle markets were slow to develop yesterday with packer bids of $118/$1.90-$1.91 being passed by feedlots offering smaller showlists at $123-$124/$1.98-$2.00. Futures settled higher yesterday, which helped to bolster feedlot attitudes, however the beef market remains on the defensive to the point where some meat is beginning to back up in the coolers and this isn’t giving packer’s much incentive to pay up for cattle this week. That being said, it looks as though packers want to have a 640,000 head kill and they didn’t buy a whole lot of cattle last week, especially in the south where Texas formula numbers were well below a week ago. This could somewhat positive for the market this week, or at least help to hold it steady. Again, if we can hold Feb live cattle above $120 by tomorrow or Friday perhaps we can see a steady cash trade this week, however believe overall the market remains on the defensive until the middle of February. Cash feeder cattle markets remain higher across much of the country with most sales yesterday showing $2-$4 higher. Slaughter cow markets hold mostly steady.


Cash Beef Situation and Outlook:
             
The cash beef trade remains soft with weakness now said to be filtering into the end meats complex. Choice ribs and loins were in need of discounting yesterday, which from seasonal standpoint is expected. The problem beginning to surface in the market is that domestic retail and wholesale buyers are apprehensive to procure end meats as consumer pulls are not dictating such action right now. This was leaving packers no choice but to lower offering prices on chuck and round meat and even at that it was said that meat wasn’t moving and beginning to back up in the coolers. This type of action would also lead one to believe that export business hasn’t showed back up from before the holiday’s as was first thought earlier this week. The bright spot in the cash beef trade is in the boneless beef and ground beef markets where packers report active interest for these items. Probably need to look for more money to come off the boxed beef market by the end of the week.

Futures Market Situation and Outlook:

Cattle futures got a boost yesterday mainly on the backs of higher cash feeder cattle markets, where stronger feeder futures drug live cattle futures higher with them. Again though, with the Goldman Roll going on, the market settled back going into the close only to rally back sharply in the last 30 seconds of trade on MOC buying. Option trade has been very slow since coming back from the holiday’s with volatility leaking lower so no real features there. I am losing my optimism towards the cash fed cattle market coming into this morning, simply because I don’t like what I hear about what is going on in the beef market. I thought earlier this week that perhaps we would see some export business show back up from after the holiday’s and with smaller showlists of cattle this week that this could possibly be supportive to the cash fed cattle trade. But by talking to the guys in the cash beef market it appears that this is not the case and that a steady at best cash cattle market might be a better call. This would especially be true if the $120 support comes out in Feb live cattle today, as I think that would indicate we are going down to $117-$118. I would look for $122 to continue to cap any rally attempts in Feb live cattle for the balance of this week. Feeder cattle futures and cash are in a world of their own right now and would probably leave that market alone, unless you are a producer with cattle to sell in the coming weeks, where I would be buying some put options for risk management. Feeder futures obviously don’t have to break as hard as live cattle, but if we continue to leak lower in the cash fed cattle market feeder rallies may be limited. Look for a $.25-$.50 lower open to live and feeder cattle this morning. Trade Well!!!

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


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.
2012-01-10T09:04

January 10, 2012



Cash Cattle Situation and Outlook:


The cash fed cattle market was pretty much at a standstill yesterday with the exception of one regional packer in the north that was bidding $1.98 dressed for cattle and actually bought a few that way. Showlists are mostly lower across the board to begin the week and that along with some early packer inquiry from some of the regionals is lending some optimism towards this week’s cash trade. On the negative side of the market the futures continue to struggle holding on to any strength and the boxed beef market is trading lower on light domestic demand. That said though, we there could be some export business that surfaced yesterday, which could be one way to explain some of the light $1.98 dressed trade in the north yesterday. Another positive for cattle feeders this week is that packers called on about 20,000 less contract and formula cattle last week, which will leave some in that part of the country a little short on inventory to kill this week. Despite the lower beef trade early this week, if there is some export business resurfacing after the holiday’s and given shorter numbers of fed cattle for sale and as long as Feb live cattle can continue to hold above $120, we may see a steady/higher fed cattle trade this week.

The big story in the cattle market is the explosive feeder trade that started this week and continued yesterday. Many cattle auctions yesterday were calling their respective feeder markets $5-$10 higher. In the northern plains cattle that weigh 650-750 lbs bring from the mid $150’s to the lower $160’s with 800 lbs cattle bringing from the upper $140’s to lower $150’s. Part of this strength can likely be attributed to the ranch community beginning to buy heifers to take home and make cows, which would take away from an already depleted feeder supply. There were replacement heifers on the Northern Video Auction in Montana yesterday that weighed 600 lbs and brought north of $2.00 lbs. Slaughter cow markets were a little firmer around the country yesterday as well.


Cash Beef Situation and Outlook:
             
The boxed beef market started the week on a sour note with many items throughout the rib, chuck, round, and loin needing some sort of discounting. There was light discounting evident in the boneless beef complex, however it was said that there was a little better demand for boneless and ground product. Weekend beef clearance didn’t quite meet expectations and this was said to be the main contributing factor for the lower beef trade. Domestically, demand is going to be a little soft in my opinion until we get into the middle of February but I expect to see export business pick up after the holiday’s and this will be a supportive factor to the cash beef trade.

Futures Market Situation and Outlook:

Two­-sided trade in the cattle futures yesterday with live cattle opening and trading lower early, then rallying midday on lower showlists, only to break once again going into the close as the Goldman’s continue to roll long Feb’s into April/June. Feeders held pretty strong all day as the cash market is exploding higher. We’ll start higher today led by the feeder complex. As outlined above, perhaps the cash fed cattle market can trade steady/higher this week due to smaller showlists and better export demand and this may help live cattle futures to hold onto gains today. While Feb live cattle didn’t close very well yesterday, I think if we can hold $120 today you could make a case for a $1-$2 rally by the end of the week. Spreads are acting alright today in that regard. I wouldn’t get too excited about selling any feeder cattle yet either given what is going on in that cash arena. I would look for a rally today and tomorrow in the cattle complex. Also, may want to start looking at long April/short June spread at even money. 7 out of the last ten years April goes off the board premium to June and I think the reason June has been outperforming April is that estimates are for December feedlot placements to be 10% below last year, which has guys buying June and some of Goldman’s stuff is going into June as well. Look for a $.25-$.50 higher open to live and feeder cattle this morning. Trade Well!!!

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


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.

2012-01-09T09:02

January 9, 2012



Cash Cattle Situation and Outlook:


  We left last week with a cash fed cattle market that trades mostly $1 lower live in the south and $5-$6 lower dressed in the north. It was another late Friday trade that developed at $120-$121 live in TX/OK/KS and $121-$122 live or $1.96-$1.98 dressed in CO/NE/IA. Sales volumes captured by the USDA in their early afternoon report were light with their late afternoon report showing approximately 100,000 head of cattle selling in all trade areas. We will get a better handle on how many cattle were sold today once everything gets counted and reported. Suffice it to say though that overall trade totals likely remained on the light side and I would expect showlist numbers to be even to larger with last week, mainly because there will be more cattle becoming available to the market. This week’s market may be a little too early to call as I would like to see how the futures trade early today, what the showlist is, and see what the beef market looks like. Overall though, I remain a little negative the cash fed cattle and beef markets into the middle of February and it’s not to say we can’t bounce a dollar or two higher from week to week, but I still think we trade cattle down to $116-$118 in the next 4-6 weeks. The cash feeder cattle market was sharply higher last week with cattle weighing under 600 lbs bringing $5-$10 higher and cattle weighing over 600 lbs bringing steady/$5 higher. Feeder’s should find some early support this week as well but if the fed cattle market continues to underperform feeder rallies could be limited.


Cash Beef Situation and Outlook:
             
The choice boxed beef market lost $3.38 while the select boxed beef gained $.37 last week. Sales volumes were slow on light demand. The first half of the week saw seasonal weakness in middle meats drag cutouts lower, however towards the end of the week end meats were starting to trend lower and all of this should continue this week as demand for high priced beef after the holidays is not meeting expectations. Look for lower boxed beef values by the end of the week unless we see some sort of resurgence in export business.

Futures Market Situation and Outlook:

Cattle futures settled the week lower in the fats and higher in the feeders in direct response to what was going on in the respective cash markets. Feb live cattle did manage to hold near term support at $120 late last week and that will be the number to watch early this week. If we can hold it early we could possibly bounce back up to $121-$122 but believe that would be a sell as eventually I think $120 in Feb comes out and we trade down to $116-$117. Feeders are a different story due to last week’s cash strength, however I think everyone knows that the CME index will be higher this week and the futures settled lower on Friday, which could be a red flag. I would say that if feeders can’t take out last week’s highs early we could be in for a small set back there as well. Look for a $.10-$.20 higher open to cattle futures this morning. Trade Well!!!

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


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.

2012-01-06T09:06

January 6, 2012



Cash Cattle Situation and Outlook:


The USDA reported a light fed cattle trade in western Nebraska late yesterday afternoon at $121-$122, which would be a couple dollars below last week’s market. The rest of cattle feeding country was untested with the best packer bids being $119 in the south and $1.93-$1.94 dressed in the north. Trade should turn active sometime today as short bought packers at least cover near term needs for next week. I would look for a cash fed cattle trade that develops at $120-$121 in the south and $1.96-$1.98 dressed in the north. The cash feeder cattle market remains red hot with sharply higher prices being paid on most classes of feedlot replacements. We may see that cool off a little next week if the fed cattle market continues to underperform expectations.


Cash Beef Situation and Outlook:
             
The boxed beef market was lower yesterday on sharply lower rib values that pulled cutout values lower on the choice. End meats were steady/higher and that should remain the case going into next week, however middle meats are going to continue to be a drag on cutout values until the end of February. Beef exports for the week of December 23-29, 2012 are as follows:

Beef:  Net sales of 1,700 MT--a marketing-year low--for delivery in 2011were primarily for Mexico (600 MT), Japan (500 MT), South Korea (500 MT), Canada (300 MT), and Russia (200 MT).  Decreases were reported for Hong Kong (400 MT) and Vietnam (300 MT).  Net sales of 4,200 MT for delivery in 2012 were primarily for Mexico (1,100 MT), Canada (500 MT), Hong Kong (500 MT), and South Korea (500 MT).  Exports of 12,400 MT were reported mainly to South Korea (2,700 MT), Mexico (2,200 MT), Japan (1,500 MT), Canada (1,500 MT), and Vietnam (1,400 MT).

Futures Market Situation and Outlook:

It was another day of mixed settlements in the cattle complex yesterday with lower closes in the fat cattle futures due to lower cash ideas and higher closes in the feeder cattle due to the sharply higher cash trade there. We continue to see longs roll out of February ahead of the Goldman Roll, which officially begins today and this keeps rallies limited in the live cattle futures. As mentioned, earlier in the week I keep a negative bias towards cash fed cattle prices into the middle of February and as such will continue to view any near term rallies in Feb/April/June live cattle as selling opportunities. The cash feeder cattle market remains strong, however if the fed cattle are going work lower in the near term as I expect, it will likely begin to drag the feeders lower as well. I would try to be patient in selling feeder cattle until Tuesday or Wednesday of next week once all of the high priced feeder cattle from this week get priced into the CME index. Outside markets have turned lower since early this morning, so I would look for a $.10-$.20 lower open to cattle futures. Trade Well!!!

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


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.

2012-01-05T08:54

January 5, 2012



Cash Cattle Situation and Outlook:



The cash fat cattle market was void of any activity yesterday with only a few packer bids in the south surfacing at $119 live being passed by feedlots trying to sell cattle for $124 live in the south and $2.04 plus dressed in the north. We could see a few shorter bought packers get a bit more interested in doing some business in the north as packers there didn’t buy many cattle last week. Southern packers seem to be fairly well supplied with cattle especially considering we are only going to see a 560,000 head kill for this week. The remains concern about the lack of business being done in the beef market after the last two weeks of production cuts and this keeps rally potential in the futures and probably in the cash limited this week and next. We’ll need to see a substantial rally in the futures today or tomorrow if we are going to see any price strength in the cash fed cattle trade this week and as of right now that seems unlikely. As a matter of fact the cash fed cattle market likely continues to hold some downside risk into the middle/latter part of February, probably back down to the middle “teens” like we have been talking. The only bright spot in the cattle market this week is in the feeder cattle trade, where feedlot replacement buyers come back from two holiday shortened marketing weeks and can’t seem to spend enough money for cattle. Many of the sales canvassed through the first half of this week have cattle anywhere from $5 to as much as $10 cwt. higher compared to the week before Christmas. Deferred feeding margins certainly wouldn’t justify such trading activity given the sharp rally in corn and meeker rally in deferred live cattle futures, but everyone keeps wanting to tout the “supply” story in the cattle market and until some of these cattle start to lose money because “demand” doesn’t live up to expectations expect to see further strength in the cash feeder trade. Regardless, look for another jump in the CME feeder index next week and further strength in the feeder futures. The cow market is holding steady/higher this week.

Cash Beef Situation and Outlook:
             
The boxed beef market held mostly steady yesterday with demand deemed limited. Most domestic buyers seem content with where they are inventory wise and feel there is downside risk to the current price structure of the beef market. There is still some near term interest in ground beef and a few end meats, but middle meats continue to be a drag on the cutout complex and this likely continues going forward. I wouldn’t doubt we see a pickup in export business next week or the week after, which could be supportive to the market but until that happens or weather returns to cattle feeding country I think beef markets will drift lower.

Futures Market Situation and Outlook:

The cattle futures market settled higher yesterday but in terms of the front month live cattle once again well off the highs of earlier in the day. Pre-roll activity and ideas of softening cash fed cattle markets continue to weigh and cap any near term rallies in Feb live cattle, which keeps the rest of the complex under wraps through the spread trade. Deferred live cattle out performed front month cattle due to increases in the corn trade, and that will be an ongoing thing through South Americas growing season, but they put more rain in the forecast for Argentina last night and this has overnight corn trading lower coming into this morning’s trade. Feeder cattle held pretty strong yesterday because of what’s going on in their cash trade but we will probably have the best of that priced in by the middle of next week. I am still overall bearish the entire cattle complex going into the end of February and will still look to sell any near term rally in live cattle. I would be patient about selling any feeder cattle until we get into the middle of next week and get the cattle from this week’s sales priced into the CME feeder index. And if anything you could keep a light long in January feeders until then. Cattle kills are going to pick up again starting next week and if packers are having a hard time selling beef with a 560,000 head kill what are they going to do with beef from a 640,000 head kill. Until we see a healthy resumption of export business, or we see some weather develop in cattle feeding, or we get past some of these fed cattle numbers that are ahead of the market look to sell rallies in the cattle complex.

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


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.