This summer we may face $5.00 gasoline and gold over $2,000. So how much will Sirloin, Porterhouse, and New York Strip steaks cost for the BBQ season? Are you hedged?
Last week April Live Cattle opened at $130.65 and closed the week at $129.50. The previous week, April Live Cattle opened at $127.025 and closed the week at $130.90 on news that the U.S. cattle herd now was at 90.8 million head, which is the lowest level since 1952. Keep in mind that in 1952 the U.S. population was 157 million and is now more than 311 million. The drop this past week was caused by bearish Cold Storage figures, Slaughter numbers, and a Cattle on Feed report released last week. See the reports below.
On the daily April Live Cattle chart below, you can see ADX at 25.8 and dropping, showing strength of trend. +DI looks to be getting ready to cross down below –DI. MACD has dropped divergence and is looking to cross down below the signal line, and Stochastics are correcting from overbought territory.
Proceed to Page 2 for the latest COT Data...
COT Data
On the weekly April Live Cattle chart below, ADX shows a weak trend and Stochastics are overbought. In the Legacy COT we see Commercials adding to their net shorts, going from -28,467 contracts net short the previous week to -31,409 contracts net short this past week. Looking at the more transparent Disaggregated COT, we see Producers (True Commercials) net short -123,027 contracts net short, Swap Dealers are net long 91,618 contracts, and Managed Money are 86,135 contracts net long.
On the daily Feeder Cattle chart below, you can see that ADX, while dropping, still shows a strong uptrend at 39. +DI and –DI are converging. MACD is dropping divergence and is looking to cross the signal line down, and Stochastics are in deep overbought territory. As of Dec. 23, Trends in Futures recommended a long in April Live Cattle and is currently managing $4,487.50 in open trade equity. This will help ease the higher costs of meat this summer.
On the weekly chart of April Feeder, you can see ADX at 71, showing a very strong up-trending market. Weekly Stochastics are deeply overbought. You can see in the COT that “BIG money” has postured for higher prices since the beginning of the year. We also saw them start posturing for higher prices back in September 2011.
Make sure you look at the below reports under Fundamentals. You will see exactly why cattle moved. How long will this continue? My gut feeling here is not too long.
|
Commodity |
12-mo low |
12-mo hi |
24-Feb |
17-Feb |
|
Cattle (feed) |
-2,456 |
5,543 |
-2,456 |
-1,821 |
|
Cattle (live) |
-40,877 |
10,437 |
-31,409 |
-28,467 |
|
Hogs |
-46,574 |
21,270 |
-19,776 |
-20,423 |
|
Corn |
-413,915 |
-36,487 |
-97,465 |
-101,133 |
|
Oats |
-6,189 |
290 |
-1,370 |
-1,280 |
|
Soybeans |
-193,048 |
28,178 |
-71,777 |
-55,948 |
|
Soybean meal |
-76,105 |
32,081 |
-23,270 |
-9,307 |
|
Soybean oil |
-91,150 |
29,745 |
-24,210 |
-8,297 |
|
Wheat |
-11,802 |
87,922 |
72,543 |
72,471 |
|
Orange juice |
-22,341 |
-9,769 |
-12,479 |
-13,977 |
|
Coffee |
-38,622 |
1,153 |
-775 |
-1,908 |
|
Cocoa |
-41,808 |
13,302 |
9,342 |
13,302 |
|
Sugar |
-208,312 |
-25,626 |
-103,606 |
-73,985 |
|
Cotton |
-40,143 |
-2,152 |
-13,751 |
-14,643 |
|
British pound |
-56,162 |
88,682 |
37,994 |
49,164 |
|
Canada dollar |
-115,190 |
25,942 |
-32,518 |
-24,625 |
|
Euro FX |
-124,855 |
197,616 |
169,534 |
175,133 |
|
Japanese yen |
-64,864 |
76,983 |
6,396 |
-14,399 |
|
Swiss franc |
-42,387 |
26,491 |
22,801 |
21,223 |
|
US dollar index |
-53,158 |
14,003 |
-35,640 |
-34,861 |
|
Mexican Peso |
-140,414 |
39,901 |
-52,052 |
-43,492 |
|
Australian dollar |
-110,025 |
479 |
-87,468 |
-87,442 |
|
S&P 500 |
-77,473 |
73,398 |
-22,051 |
-24,873 |
|
T-note -10 yr |
-49,750 |
216,140 |
110,234 |
78,754 |
|
T-bond -30 yr |
-20,389 |
88,803 |
32,055 |
18,505 |
|
Eurodollar |
-408,407 |
1,126,194 |
-72,146 |
-105,875 |
|
Crude oil |
-319,669 |
-114,385 |
-261,678 |
-231,813 |
|
Heating oil |
-54,606 |
-4,204 |
-54,606 |
-48,988 |
|
RBOB Gasoline |
-105,309 |
-38,417 |
-105,309 |
-101,926 |
|
Natural gas |
100,801 |
228,910 |
100,801 |
102,831 |
|
Copper |
-35,687 |
14,419 |
-7,019 |
-8,714 |
|
Gold |
-287,634 |
-159,153 |
-229,302 |
-209,408 |
|
Platinum |
-35,249 |
-18,670 |
-32,955 |
-32,436 |
|
Silver |
-56,460 |
-14,132 |
-39,188 |
-37,310 |
Commercial Net Tracker instructions: This form tracks the Commitment of Traders (COT) data for the commodity futures market. This form "looks" at the most recent five weeks of COT data and provides visual indications of the data. A) If the current value is at a 12-month low, the cell will display a red/burgundy background. B) If the current value is at a 12-month high, the cell will display a green background. C) If the current value went from net negative to net positive, the cell will display a blue background (indicating a bullish condition). D) If the current value is both a 12-month high and also went from a net negative to a net positive, the background will be green. You should view the data with green backgrounds to determine if they also went from net negative to net positive.
If you need help understanding how to understand how to use the NEW COT report to your benefit get instant access to my new e-book “What Lies Beneath ALL Trends”. It is filled with eye opening information.
Proceed to Page 3 for this week's detailed fundementals...
Fundamentals — Reports released last week (www.usda.gov)
Cold Storage
Total red meat supplies in freezers were up 13% from the previous month and up 7% from last year. Total pounds of beef in freezers were up 5% from the previous month and up 4% from last year. Frozen pork supplies were up 21% from the previous month and up 8% from last year. Stocks of pork bellies were up 29% from last month and up 5% from last year.
Slaughter
Released Feb. 24, 2012, by the National Agricultural Statistics Service(NASS), Agricultural Statistics Board, United States Department of Agriculture (USDA).
January pork production is 5% above last year.
Commercial red meat production for the United States totaled 4.12 billion pounds in January, up 2% from the 4.04 billion pounds produced in January 2011.
Beef production, at 2.11 billion pounds, was slightly below the previous year. Cattle slaughter totaled 2.72 million head, down 1% from January 2011. The average live weight was down 1 pound from the previous year, at 1,300 pounds.
Cattle on Feed
Released Feb. 24, 2012, by the National Agricultural Statistics Service (NASS), Agricultural Statistics Board, United States Department of Agriculture (USDA).
United States Cattle on Feed up 2%.
Cattle and calves on feed for slaughter market in the United States for feedlots with capacity of 1,000 or more head totaled 11.8 million head on Feb. 1, 2012. The inventory was 2% above Feb. 1, 2011.
Placements in feedlots during January totaled 1.85 million, 2% below 2011. Net placements were 1.77 million head. During January, placements of cattle and calves weighing less than 600 pounds were 445,000, 600-699 pounds were 430,000, 700-799 pounds were 525,000, and 800 pounds and greater were 447,000.
Marketing of feed cattle during January totaled 1.82 million, 2% above 2011.
Proceed to Page 4 for this week's detailed charts...
