USM Bloggers

Cattle Market Analysis for 8-17-10 

The market failed to take out yesterday’s contract highs on the early bounce and settled lower on the session with an inside trading day. October castle pushed to the highs of the day early in the session led by a surging stock market and hope for better cash news this week. The market inched higher in choppy trade early as a continued firm tone for beef from retailers has traders discussing the possibility that cash cattle could trade firm this week. Talk of the jump in beef prices as retailers book for Labor Day features along with indications that the showlist may be lower this week helped to trigger talk of a higher cash cattle market this week and this added to the positive tone. A weaker US dollar and a surge higher in the stock market were also seen as positive outside market forces for today. Boxed-beef cut-out values at mid-session were up $1.03 to $156.65.

8-17-10 -  Hog Market Report 

October hogs ended sharply higher on the session and near the highs as positive outside market forces and ideas that the Mexico tariffs will not disrupt trade too much helped to support. The market pushed to the highest level since August 5th. Funds were noted buyers despite the Mexico news as strength in pork product markets late yesterday and a higher appetite for risky trades from fund traders helped support. The market managed to hold above yesterday’s lows on the early set-back and pushed higher on the session into the mid-day. News that Mexico will slap on tariffs for US pork imports was seen as a negative force but some traders believe this will have little impact. Cash hogs were steady to a bit higher at some location and pork cut-out values were sharply higher late yesterday to provide support. In addition, futures are discount to the cash. Declining open interest on the rally has some traders believing that short-covering is the foundation of the current bounce off of the August 9th lows.

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 future market education.

This blog is published by Andy Waldock.  Andy Waldock is a financial advisor, analyst, broker, asset manager and trader for Commodity & Derivative Advisors, located in Sandusky, Ohio.  Therefore, Andy Waldock may have positions for himself, his family, or his customers in any commodity future market reviewed. 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 advisable for all investors.  Investing in the commodity futures could result in considerable risk.  If you are interested in reading other circulated 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.

The daily commentaries provide a recap of any reports released that day, a recap of each commodity’s traded price activity, an analysis of the factors that influenced price activity, and a look ahead at the schedule for the next day.  Market commentaries for soybeans, corn, wheat, gold and silver are provided by CME Group.   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.

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