8-30-10 Meat Market Commentary
Cattle Market Review for 8-30-10
October cattle closedlower for the 5th session in a row after spending much of the session higher on the day. Ideas that feedlots are current with marketings and that the hot summer will keep weights down and production low in the weeks ahead helped to provide some early support. Traders see declining beef production into the 4th quarter as a positive force for the market. However, weakness in the stock market and ideas that consumers might resist higher beef prices after Labor Day helped to pressure the market late in the day. The rally fell short of Friday’s highs and traders are a bit concerned with an extreme overbought condition of the speculator basis the recent Commitment-of-Traders report. News of 37 deliveries against the August futures helped drive August cattle sharply lower as these were the first deliveries of the month. Boxed-beef cut-out values at mid-session came in at $163.93, up $.07 on the day. Cash cattle was offered at $102 with a lack of bids after cash cattle traded mostly $99.50 last week.
Hog Market Commentary for 8-30-10
October hogs settled slightly higher on the day but well off of the early highs and close to the lows of the session. Ideas that demand will slip significantly after Labor Day helped to pressure the market late and weakness in the stock market did not help. The market pushed higher and took out Friday’s highs early in the session as packer demand is strong for live inventory due to high profit margins and this helped to provide some underlying support. In addition, ideas that the market was oversold after the sharp break last week helped to support the bounce. Cash markets were steady to $1.00 lower today and are called $.50 to $1.00 lower tomorrow. Traders see a gradual increase in slaughter in the weeks ahead as a negative force. Some see the discount to the cash as a reason to suspect that much of the seasonal decline is already priced.
After reading the cattle and hog analysis, 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 future market education.
This blog is reported by Andy Waldock. Andy Waldock is a financial advisor, trader, analyst, broker and asset managerfor Commodity & Derivative Advisors, located in Sandusky, Ohio. Therefore, Andy Waldock may have positions for himself, his relatives, or his customers in any commodity future market reviewed. The blog is meant to develop a discussion and educate those with an interest in the commodity future markets. The commodity markets employ a high degree of leverage and commodity trading may not be suitable for all investors. Investing in the commodity futures could result in considerable risk. If you are interested in reading other published 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.
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