Sorry, you need to enable JavaScript to visit this website.

Mixed day in livestock due to outside markets

Published on: 18:42PM Oct 28, 2008
 
(866) 433-4371         info@ehedger.com
 
 
Live Cattle
Feeder Cattle
Lean Hogs
LCV8
89.75
+0.825
FCV8
95.55
-0.35
LHZ8
58.05
-0.50
LCZ8
88.875
+0.10
FCX8
95.425
-0.125
LHG9
64.45
-0.20
LCG9
90.325
+0.15
FCF9
94.10
-0.60
LHJ9
70.20
-0.25
 
Index
96.41
-0.52
Index
60.65
-0.36
 
Live Cattle: 
¨      FED spurs Record high in Long-term Commercial Paper market
¨      Friday is last trading day for Oct 08 futures
Live cattle closed higher on a surge inspired by the outside markets such as financial and grain markets. Cattle opened higher and caught a bounce as traders focused on buying the October. Fundamental news proved positive with midday boxed beef prices firming with choice at 143.44 up 1.80 and select at 135.66 up 0.41. The slaughter was a strong Tuesday, 127,000. Boxed beef has shown slight improvement to begin the week with solid product movement again today, 293 total loads while adding to Monday’s gains. Outside Markets exploded after the pits closed as FED stepped in to support the “commercial paper” market, which is the cornerstone to adding lending liquidity into the system. This should add solid ground to the charts in an oversold market.
Looking Ahead: Looks like we closed our gap, first step to consolidating the market. We like buying Feb and April against tonight’s close for a bounce going into the end of the month; carry a tight stop loss. COOL labeling may be a real issue leading into the first quarter's export trade and needs to be watched closely.
 
 
Boxed Beef Cutout Values
Choice
Select
Loads
142.95
+1.31
135.41
+0.16
293
Choice/Select spread settled at 7.54 +$1.15
Slaughter
Wk Ago
Yr Ago
WTD
Yr Ago
127,000
127,000
132,000
255,000
260,000
 
Feeder Cattle: 
 
Feeder cattle started relatively strong yet fell apart in the nearby months. Feeders closed lower, but mid range for the day’s trade. The CME index fell 0.52 settling at 96.41, which is disappointing, but not surprising given the fact that Oct feeders are struggling to close higher. The last trading day for October futures is this Thursday, the 30th. The Dow index continues to the #1 indicator of cattle prices at this time. Tonight’s extremely strong close of nearly 900 points higher will lift feeder cattle higher on overnight and early morning trading. Our recommendation to buy near last week's lows has been met and should now be watched closely with stops. New lows last Friday are discouraging and this week will be key if we close today's gap lower. If not, the next support levels will not be found until 92, then 90.
 
 
Lean Hogs: 
Terminal market hogs were steady to $2 lower trading $36-$38.  Direct hog markets were lower with the IA/So.MN direct market at $55.70 down $1.81, Western cornbelt $55.99 down $1.57, Eastern cornbelt $53.10 down $.62 and the National average at $54.85 down $1.11.
 
¨      Canadian Hog Production
o       total inventory down 11%, breeding herd down 8%, pig crop down 2.4%
Lean hogs settled mixed with nearby’s lower off concerns of weaker cutout and strong slaughter. Today’s slaughter was 435,000; WTD 869,000 v. 862,000 LW and 841,000 YA. Volume was active as professional interests renewed their push to re-establish bear spreads, long summer, short nearby. The Idea is current slaughter and softening export market will limit any gains in Dec or Feb, while the differed months work higher off tighter domestic production, cool labeling, and reduced Canadian numbers. Cutout was reported 65.17 up .11; of interest were hams, the latest cold storage report put bone-in hams stocks recorded high, 108,131,000 LBS. Ham cutout reported 54.71 up 1.18 today and up approx. 5.00 off our low. 
Looking Ahead. Cash news still looks negative, and believe it will be a limiting factor as Dec Futures try to test 60.00 given the large slaughter rates. We still like being bear spread long June short Feb and April. If you feel a bottom is forming look to buy Dec and June against selling Feb and April.
 
  
 
Pork Carcass Cutout Values
 
 
Loads
65.17
+0.11
105.1
Slaughter
Wk Ago
Yr Ago
WTD
Yr Ago
435,000
431,000
421,000
869,000
841,000
 
 
Go to www.ehedger.com for a free two-week trial that includes our hedging recommendations, trades of the day, market recaps or to simply open an account. 
 
You can also contact us at 866-433-4371, or by sending us an email to info@ehedger.com
 
 
Regards,
EHedger LLC
141 West Jackson Blvd.
Suite 1520A
Chicago, IL 60604
1-866-433-4371 Office
 
Trading commodity futures involves substantial risk of loss and may not be suitable for all investors. The recommendations express opinions of the author. The information they contain is obtained from sources believed reliable, but is in no way guaranteed. The author may have positions in the markets mentioned including at times positions contrary to the advice quoted herein. Opinions, market data, and recommendations are subject to change at any time.