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| The Cattle Range Weekly Market Summary contains a fairly comprehensive comparison of the past week's prices from around the country in comparison to the previous week, month, 6 months ago, & 1 year ago. The data is compiled from a variety of sources and is organized to give producers additional insight in determining market movement and trends. - "Click Here" to Sign Up A Friend or Associate to receive the Weekly Market Summary. | ||
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| Market Summary for the week ending November 6th: |
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| The Cattle Range 10-Day Market Trend: |
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| An indicator
of overall cattle market strength.
The angle indicates direction & velocity of the trend. |
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| The Trendline
is based on daily market factors for the past 10 days.
The daily factors are weighted calculations of the cumulative Gain/(Loss) of 10 major market factors compared to the previous trading day. |
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| National Feeder & Stocker Cattle Weekly Summary: |
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| Market Summary
& State Averages Unavailable this week.
Sale results for selected Thursday auctions shown below. |
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| Cattleman's
Livestock Auction - Dalhart, TX...
Cattle and Calves: 2,945 Week Ago: 2,424 Year Ago: 2,638 Compared to last week: Feeder steers and heifers under 500 lbs 2.00-4.00 higher, over 500 lbs mostly 2.00 higher, with load lots 4.00 higher. Slaughter cows mostly 2.00 lower, lean cows up to 4.00 lower. Trade active. Demand good. Cattlemens
Livestock Auction - Glenwood, AR...
Farmers &
Ranchers Livestock Commission Co. - Salina, KS...
Joplin Regional
Stockyards - Joplin, MO...
New Cambria
Livestock Auction - New Cambria, MO...
Pratt Livestock
Auction - Pratt, KS...
St. Joseph,
MO Stockyards - St. Joseph, MO...
Sterling
Livestock Commission Co. - Sterling, CO...
Stockman's
Livestock Inc. - Apache, OK...
Bassett Livestock
Auction - Bassett, NE...
Billings
Livestock Commission Co. - Billings, MT...
Centennial
Livestock Auction Co. - Ft. Collins, CO...
Napoleon
Livestock Auction Inc. - Napoleon, ND...
Presho Livestock
Auction - Presho, SD...
Stockmens
Livestock Exchange - Dickinson, ND..
Valentine
Livestock Auction - Valentine, NE...
Blue Grass
South - Stanford KY...
Cullman Livestock
Auction - Cullman, AL...
Decatur Stockyards
- Decatur, AL...
Knoxville
Livestock Center - Knoxville, TN...
Ky-Tenn Livestock
Market - Guthrie, KY...
Toppenish
Livestock - Toppenish, WA...
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| NCBA Says Study Over Air Quality Measurement Is Flawed: |
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| The National
Cattlemen's Beef Association has criticized a review of the National Ambient
Air Quality Standards for Particulate Matter. Conducted by the U.S. Environmental
Protection Agency, the study was done as part of a required review of the
coarse particulate matter standards. In effect, EPA is looking at the impact
of duct. According to a statement from NCBA, coarse particulate matter
is "nothing more than dust kicked up by cars and trucks traveling on dirt
roads, a tractor tilling a field or cattle moving around on dirt," says
Tamara Theis, NCBA's chief environmental council. "Studies do not show
that rural dust is a health problem."
EPA, back in 2006, set a coarse particulate matter standard of 150 micrograms per cubic meter of air, and when reviewing the standard in 2008, determined that the evidence on health effects from this level of dust was inconclusive. However, in July 2009, EPA reinterpreted what NCBA calls "the inconclusive evidence" and made use of what the group calls a flawed study to suggest that there are adverse health effects from dust at leves that are 10 times lower than the current standard. Theis says EPA is suggesting 12 to 15 micrograms of dust per cubic meter of air, which is below the naturally occurring levels of dust through most Western states - including "pristine National Parks," she says. If EPA were to set air standards at this level, much of the country would be over the limit. Cattle producers are concerned because it would limit the ability to raise livestock, but the issue goes beyond agriculture, Theis says. "States would be required to impose extreme control requirements and limitations on many businesses to ensure that the standard is met." The group is urging EPA to reject the study results and refrain from tightening the dust standard further. |
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| Impact of Rains: |
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| The Southern
US has been inundated with rain over the past two months. The Mississippi
River corridor has been particularly hard hit by the excessive rains.
The chart below shows rainfall as a percent of normal for the 60 days ending
on November 2. Note that in parts of the Mid-South and Southeast,
accumulated rainfall over the past 60 days has been as much as four or
five times the normal amount. For row crop producers, this year’s
rainfall event has been devastating, seriously degrading both the quantity
and quality of crops remaining in the field. Soybeans and cotton
have probably suffered the greatest losses due to the fact that October
is generally the principal harvest season for these crops.
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| Cattle Buyer Joke of the Week: |
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| It had been
a tough fall for Bart. It seemed to him that everything had worked
against him -- Including the cattle market and his bank. He was so
depressed and destressed that his wife insisted that he seek psychiactric
help. After an initial consultation, he was required to attend a
joint session with two other patients.
"To help me determine your state of mind," said the psychiatrist to the group, "I'm going to start by asking each of you to answer a question." To the woman
in the group, he asked, "What is the opposite of sadness?"
"And the opposite
of depression?" he asked a young man.
"And you, Sir"
the psychiatrist said Bart, "How about the opposite of woe?"
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| Est. Weekly Meat Production Under Federal Inspection: |
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| Total red meat production under Federal inspection for the week ending Saturday, November 07, 2009 was estimated at 971.6 million lbs. according to the U.S.Department of Agriculture's Marketing Service. This was 1.7 percent lower than a week ago and 1.4 percent higher than a year ago. Cumulative meat production for the year to date was 2.5 percent lower compared to the previous year. |
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| Bullish/Bearish Consensus: |
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The theory
behind the "Bullish/Bearish Consensus" indicator is when the public
reaches a consensus, they are usually wrong:
Conversely, when Public Opinion moves below the green dotted line, then the public is too pessimistic about the commodity's prospects for further gains compared to their opinion over the past year. Looking for absolute readings under 20% (or especially 10%) often indicates an upturn in the market. |
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| Economic News: |
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| Cattle Outlook:
Glenn Grimes & Ron Plain - University of Missouri |
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| Beef production
for January-September was down 3.2 percent. The number of cattle slaughtered
during this nine month period was down 4.2 percent. Therefore, cattle weights
were one percent heavier than for this time in 2008.
Due to smaller exports beef consumption per capita was only down 2.7 percent for January-September 2009 compared to 12 months earlier. Beef demand at the consumer level was down 2.3 percent, pork demand at consumer level was up four percent, broiler demand at the consumer level was down 2.9 percent and turkey demand at the consumer level was up 2.9 percent for January-September compared to a year earlier. Live fed cattle demand was sharply below a year earlier with a loss of 8.5 percent from 12 months earlier. The reason why live fed cattle demand was down much more than consumer demand was less exports and a very weak hotel and restaurant trade. |
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| Looking Ahead: |
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| Representative Sales of Cow & Pairs - This Week: |
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| Representative Sales of Cow & Pairs - Last Week |
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| Feedyard Closeouts: |
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| Slaughter Cattle: |
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| Negotiated
cash trade was limited on light demand in all feeding regions Friday. Not
enough sales to establish an adequate market trend. On Thursday live sales
sold from 87.00 to 87.50 in Kansas and dressed sales at 140.00. In Nebraska
live sales sold from 85.00 to 86.00 and dressed sales at 134.00. In Colorado
live sales sold at 85.00. In the Western Cornbelt live sales sold at 84.00
and dressed sales at 134.00. Last week in the Texas Panhandle live sales
sold from 87.00 to 88.00.
The average live weight of cattle slaughtered in the Texas Panhandle for the week ending 10-31-2009 was 1275 lbs with 42 percent heifers compared to 1281 lbs and 41 percent heifers the previous week and 1281 lbs and 38 percent heifers the same week a year ago. |
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| Market Overview: |
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| Packers picked
along all week on offerings at steady money and on Friday did nothing.
Margins prevented increasing the bids and next week will have to bring
the resolution. The market closed the week with $87 paid in the north,
$87.50 in Kansas and a few early sales at $88 in Texas. Next week will
feature larger slow lists and close bought packer inventories.
Box prices were soft at week's end. Some improvement in exports caused by a weak dollar might stimulate beef demand between now and the end of the year. Choice cuts were quoted at $141 and select at $135 for a $6 spread. Feedlots pulled bids and will reevaluate pricing on feeder cattle over the weekend in light of the crashing futures. A 750# steer was quoted at $94 in the southern plains. |
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| Money Managers Are Introduced to Contango* |
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| With the government
printing money as fast as the presses will run, it seemed apparent to most
money managers the inevitable outcome. Throwing money, as a solution to
every problem faced by a complex economy, will simply devalue the money.
The result will be inflation and few argue this point. One way for the
money managers to combat this likely scenario is create funds, both speculative
and indexed, to purchase commodities. Commodities are generally a safe
haven for dollars trying to avoid the ravaging effect of inflation.
Following last years economic crisis, there emerged many funds allowing investors to participate, in one form or another, in inflation protected funds. When commodity prices start to climb, it's often a sign that inflation will pick up in the months ahead. This allows investors to participate by purchasing commodity price indexes, which are essentially baskets of contract prices for future delivery of oil, metals, livestock, and other goods. Goldman Sachs has managed the largest of these funds for years and they have been popular with corporations interested in laying off the risk of rising prices. Investments into these funds skyrocketed as savvy investors sought a path to participate in the government runaway inflation train. But as will happen, things didn't work out like expected. The futures prices of the deferred contracts on commodities already carried large premiums to the current cash prices -- called Contango. Every time a fund purchased the futures, they set a benchmark too far above the current prices to allow them a profit. During the summer months, natural gas was selling for $2.80 a thousand BTU. December futures were trading for $5.50 almost double the price. Investors in funds with a basket of futures including natural gas found themselves locked into a loser when natural gas prices rose from $2.80 to $4.50 but they were in at $5.50. Investors interested in playing the meats can purchase an index fund called COW. The fund managers simply purchase deferred contracts of cattle and pork contracts to offset the new money rolling into the funds. Many of those purchases last summer put the investor into cattle contracts for October and December above $90. These were large premiums to the cash and as time clicked off, the Contango sunk the ship. Many of the funds and investors in those funds are learning about Contango the hard way. Many investors believed they were purchasing funds with positions at the low cash prices that existed when they bought. As investors and speculators took a hit, they have started to pull out of the funds. The WSJ reported last week that on a quarterly basis, inflows into commodity investments have fallen from about $22 billion in the first quarter to $17 billion in the second and $11 billion in the third. Many of the funds have also found they are too big for the market. Traders in cattle futures have watched with amazement as funds move in and out of the market moving futures dollars on days when little fundamental changes are known by the market. One needs to only look at the volumes in cattle contracts to see the impact of $50 million dollars, bet long or short, on the market. One of the great puzzles of the past two years has been the resilience of feeder prices in light of the large losses in cattle feeding. Probably the most reasonable explanation would be the index and speculative longs that have propped up the deferred months in the live cattle contracts. We might be seeing less of them in the future. *Contango is a term used in the futures market to describe an upward sloping forward curve (as in the normal yield curve). Such a forward curve is said to be "in contango." Formally, it is the situation where, and the amount by which, the price of a commodity for future delivery is higher than the spot price, or a far future delivery price higher than a nearer future delivery. |
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| National Grain Summary: |
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| For the Week:
Grain and soybean bids were lower again due to favorable weather.
The weather looks dry into the weekend allowing wheat planting and harvest
to advance. There is rain in the forecast for next week. The
lower energy markets also contributed to the losses posted in corn and
soybeans.
Corn prices fell after the recent rally in which hedge funds pushed the December contract back over $4. Warm open weather may allow the harvest to be completed without additional interference and the crop is big. Corn is now trading a 35 cent premium basis to the September contract in the southern plains. A large spread is developing north of the Canadian River compared to south. Southern plains feeders are paying premiums until the northern harvest is completed and repeater trains resume normal trade. Corn is now pricing into most rations at $7.60 cwt. |
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| Although the information contained in this Market Summary is from sources believed to be accurate and timely, THE CATTLE RANGE EXPRESSLY DISCLAIMS ALL WARRANTIES, EXPRESSED OR IMPLIED, AS TO THE ACCURACY OF ANY OF THE CONTENT PROVIDED, OR AS TO THE FITNESS OF THE INFORMATION FOR ANY PURPOSE. |
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