08-05-10 Meat Market Commentary
Cattle Market Report for 8-5-10
October cattle managed to run higher early in the session and reach new contract highs shortly after the day-session opening before drifting lower to close moderately higher on the day but down near 75 from the highs. Funds were active buyers cattle even with weakness in the stock market and a sharp break in hogs. Weekly U.S. beef export sales came in at 9,300 metric tonnes, compared with the prior 4-week average of 12,400. Cumulative sales for 2010 have reached 415,000 metric tonnes, up 33.1% from last year’s pace. Boxed beef cutout was up $0.20 at midday to $151.47.
Hog Market Report for 8-5-10
The market pushed sharply lower on the session as funds turned active sellers early in the day based on weaker cash markets and fears of a minor bump in near-term supply during a period of weaker demand. Cash markets were lower than expected this morning and there was a perception that the market has become overbought recently. The short-term supply could jump due to sharply higher grain prices and this helped drive the market sharply lower even though corn prices moved from sharply higher to lower on the day. August was trading at a significant premium to the cash market and when cash hogs traded steady to $2.00 lower on the day, selling was active. Ideas that the Midwest may be too hot next week to move hogs added to the negative tone as traders see the possibility that producers will move those hogs this week ahead of the heat.
After reading today’s 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.
The daily commentaries provide a recap of each commodity’s traded price activity, an analysis of the factors that influenced price activity, a rundown of any reports released that day, and a look ahead at the next day’s schedule. CME Group provides market commentaries for wheat, soybeans, corn, gold and silver. 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.
Andy Waldock circulates this blog. Andy Waldock is a financial advisor, broker, asset manager, trader, and analystfor Commodity & Derivative Advisors, located in Sandusky, Ohio. For that reason, Andy Waldock may have positions for himself, his customers, or his family in any commodity future market discussed. The blog is meant to develop a dialogue 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. There is considerable risk in investing in commodity futures. If you are interested in reading other published articles, commenting on his publications 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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