Below is a sample of our Daily Commentary. To get this comment, and our daily coverage of 15 additional markets and trade ideas, visit futures-research.com for your free 2 week trial!
With the overbought condition of the market and continued talk that beef prices have topped-out, the market seems to be in a position to see a short-term correction and buyers can wait for the break to buy. The stiff discount of futures to the cash market is keeping producers very current with marketings, while the high cash prices are encouraging producers to move cattle as soon as possible. If beef prices do not pull back too far from this week’s 22-month highs, the cash market could see steady trade near $100 for the next few weeks and this will eventually support June and August cattle. The cattle market closed sharply lower on the session yesterday, as technical selling emerged with talk of the overbought condition. Ideas that we will soon see a near-term peak in beef prices helped to spark the spec selling, with news of record open interest adding to the overbought concerns. Cash traded at $100 yesterday and some traders expected higher trades this week. The estimated cattle slaughter came in at 130,000 head yesterday, which was a bit higher than expected and could be seen as a sign of strong packer demand. This brings the total for the week so far to 388,000 head, up from 381,000 last week at this time and up from 384,000 a year ago. Boxed beef cutout values were up 14 cents at mid-session yesterday, and closed 35 cents lower at $171.05. This was up from $170.61 the prior week. Recent strength in the US dollar also has traders nervous that beef exports will slow and imports bounce. In the USDA supply/demand report this week, 2010 beef production was revised lower by 54 million pounds, while exports were revised higher by 10 million pounds and imports revised lower by 165 million pounds. For comparison purposes, weekly beef production in the US is near 500 million pounds.
TODAY’S GUIDANCE: The overbought condition of the market and some seasonal lull in demand ahead are good reasons to wait for a significant technical correction before entry from the long side.
TODAY’S MARKET IDEAS: Buying support for August cattle comes in at 94.12 and 93.67, with 96.45 and 97.55 as upside objectives.
Cattle Market Commentary – 2010.05.13
by Terry Roggensack on May 13, 2010
Below is a sample of our Daily Commentary. To get this comment, and our daily coverage of 15 additional markets and trade ideas, visit futures-research.com for your free 2 week trial!
With the overbought condition of the market and continued talk that beef prices have topped-out, the market seems to be in a position to see a short-term correction and buyers can wait for the break to buy. The stiff discount of futures to the cash market is keeping producers very current with marketings, while the high cash prices are encouraging producers to move cattle as soon as possible. If beef prices do not pull back too far from this week’s 22-month highs, the cash market could see steady trade near $100 for the next few weeks and this will eventually support June and August cattle. The cattle market closed sharply lower on the session yesterday, as technical selling emerged with talk of the overbought condition. Ideas that we will soon see a near-term peak in beef prices helped to spark the spec selling, with news of record open interest adding to the overbought concerns. Cash traded at $100 yesterday and some traders expected higher trades this week. The estimated cattle slaughter came in at 130,000 head yesterday, which was a bit higher than expected and could be seen as a sign of strong packer demand. This brings the total for the week so far to 388,000 head, up from 381,000 last week at this time and up from 384,000 a year ago. Boxed beef cutout values were up 14 cents at mid-session yesterday, and closed 35 cents lower at $171.05. This was up from $170.61 the prior week. Recent strength in the US dollar also has traders nervous that beef exports will slow and imports bounce. In the USDA supply/demand report this week, 2010 beef production was revised lower by 54 million pounds, while exports were revised higher by 10 million pounds and imports revised lower by 165 million pounds. For comparison purposes, weekly beef production in the US is near 500 million pounds.
TODAY’S GUIDANCE: The overbought condition of the market and some seasonal lull in demand ahead are good reasons to wait for a significant technical correction before entry from the long side.
TODAY’S MARKET IDEAS: Buying support for August cattle comes in at 94.12 and 93.67, with 96.45 and 97.55 as upside objectives.
Tags: Cattle, Livestock
About Terry Roggensack