Hog Market Commentary for 10-15-10
December hogs moved to the lowest level since March 26th before bouncing to close higher on the session but down sharply for the week. Ideas that the market was oversold and a stiff discount of futures to the cash market may have helped slow the selling and may have sparked some short-covering. Cash hogs traded $1.00-$3.00 lower today as the market is absorbing a more active marketing campaign from producers who are attempting to move heavier than normal hogs to the market. Weights are higher than normal and the increased flow of pork is coming at a time when pork exports may be slipping. Monthly exports were released yesterday and showed one of the lowest monthly totals in the past three years at just 302.2 million tonnes. Exports to Japan and especially Hong Kong were down significantly from last year but sales to Mexico were up 5.7% from last year and sales to Canada were up 15.6%.
Cattle Market Recap for 10-15-10
December cattle surged higher today and closed sharply higher on the session and pushed to the highest level since September 21st. Sharply higher trade in the cash market along with continued solid gains in beef prices to the highest level since October 1st sparked aggressive new buying. Cash cattle traded as high as $97.50, up $2.50 on the week and this helped support. On top of strong domestic demand, weekly U.S. beef export sales for the week ending October 7th came in at 11,100 metric tonnes, compared with the prior 4-week average of 12,100. Cumulative sales for 2010 have reached 529,900 metric tonnes, up 26.4% from last year’s pace. For the month of August, beef sales were reported at 199.8 million pounds, up 19.6% from last year. Sales to Mexico were down from last year but South Korea bought 25.9 million pounds, up 163% from last year. Boxed-beef cut-out values were up $1.02 at mid-session to $154.26.
After reading the hog and cattle 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.
This blog is published by Andy Waldock. Andy Waldock is a financial advisor, analyst, broker, asset manager and traderfor Commodity & Derivative Advisors, located in Sandusky, Ohio. As a result, Andy Waldock may have positions for himself, his relatives, or his customers in any commodity future market discussed. The blog is meant for educational purposes and to develop a discussion 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 suitable for all investors. Investing in the commodity futures could result in substantial 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 rundown of each commodity’s traded price activity, an analysis of the factors that influenced price activity, a recap of any reports released that day, and a look ahead at the next day’s schedule. Market commentaries for soybeans, corn, wheat, silver and gold 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.