Meat Market Commentary for 10-28-10

Cattle Market Commentary for 10-28-10 

December cattle closed moderatelylower on the session and pushed to the lowest level since October 14th. Ideas that the total meat supply will be difficult to absorb over the near-term helped to pressure. The market traded in a tight range early in the day but weakness in other livestock markets and long liquidation from specs helped pressure. Weekly U.S. beef export sales for the week ending October 21st came in at 19,500 metric tonnes, compared with the prior 4-week average of 16,525. Cumulative sales for 2010 have reached 576,900 metric tonnes, up 31.9% from last year’s pace. Cash markets are quiet today after trading mostly $100 yesterday, $2.00-$2.50 lower for the week. A firm tone in beef prices and a sharp break in the US dollar plus improved economic news this morning with weekly initial jobless claims hitting the lowest level since November of 2008 helping to support. The upside was seen as limited by weakness in pork and poultry prices and ideas that beef will have a hard time holding recent gains with competitive product prices declining. Weakening packer margins was seen as a negative and talk that next week’s showlist will be lower was seen as a positive. Boxed-beef cut-out values at mid-session came in at $162.32, up 95 cents from yesterday.

10-28-10 -  Hog Market Report 

December hogs closed sharply lower on the session but did managed a recovery bounce from the lows into the close of almost 50 points. The early break pushed the market to the lowest level since prior to the March Hogs and Pigs report. Weakness in the cash market, record weights and a spurt in near-term marketings as producers attempt to become more current with marketings helped to pressure. The sharp drop in hams and other pork product prices late yesterday helped spark additional long liquidation selling from speculators and the premium of December to the cash market added to the negative tone. With pork cut-out down 5% in just one week, traders see a continued downtrend for cash hogs over the near-term.

After reading the cattle and hog review, traders might want to take a peek at the commercial traders momentum.  The Commercial Trader momentum can be tracked by using the Commodity Futures Trading Commission Commitment of Traders reports.  Our idea is that, in a value driven commodity futures market no one knows fair value like the people who produce it or, have to use it.  In fact, it is precisely their sense of value that provides the commodity market’s rhythmic meanderings that swing traders love so much.  Let’s face it, producers know when their product is overvalue and it should be sold just as well as end line users know when they should be stocking up at low prices.  Therefore, trader should be able to incorporate this valuable information into their futures market education.

The daily commentaries provide an analysis of the factors that influenced price activity, a recap of any reports released that day, a recap of each commodity’s traded price activity, and a look ahead at the next day’s schedule.  CME Group provides market commentaries for soybeans, corn, wheat, silver and gold.   The information in the Market Commentaries was obtained from sources believed to be reliable, but we do not guarantee its accuracy. Neither the information nor any opinion expressed therein constitutes a solicitation of the purchase or sale of any futures or options contracts.

This blog is publicized by Andy Waldock.  Andy Waldock is a financial advisor, broker, asset manager, trader, and analystfor Commodity & Derivative Advisors, located in Sandusky, Ohio.  As a result, Andy Waldock may have positions for himself, his family, or his customers in any commodity future market reviewed. The blog is meant for educational purposes and to develop a dialogue among those with an interest in the commodity future markets. The commodity markets employ a high degree of leverage and commodity trading  may not be appropriate for all investors.  There is considerable risk in investing in commodity futures.  If you are interested in reading other circulated articles, commenting  on his writings or subscribing to Andy’s blog, please visit http://blog.commodityandderivativeadv.com, or if you have any questions, please call 1-866-990-0777.

 

Originally posted 2010-10-29 05:46:22.

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