Hog Market Report for 8-5-10

October hogs collapsed to close sharply lower for the second day in a row and also closed near the lows. Late selling drove the market to reach a low of 74.20 as compared with Monday's high of 80.07. The market pushed to the lowest level since July 14th. Weakness in the cash market and follow-through technical selling from the weak technical action yesterday helped spark another round of active long liquidation selling from fund traders. Weakness in the pork product market late yesterday had traders talking about the potential for weaker pork demand after the recent surge in pork values. Cash was $1.00 lower today after slipping $2.00 yesterday. Slaughter came in at 398,000 for today and 20,000 for Saturday.

Cattle Market Report for 8-5-10

The market pushed lower on the session led mostly by profit-taking from speculators after futures pushed to contract highs yesterday and due to weakness in the outside markets, especially the stock market. October cattle posted the lows of the day shortly after the opening before a recovery bounce to just moderately lower into the mid-session. Weakness in the stock market and demand concerns helped to drive the market lower but news that cash traded steady on the week at $93.00 may have helped provide some support. Boxed beef cutout values were up $0.03 at midday to $150.72, just off of yesterday's lows which were the lowest since mid-March. Traders noted a jump in open interest on the rally on Thursday suggesting that new buying helped support. Slaughter came in at just 117,000 head.   

After reading the hog and cattle recap, 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, asset manager, trader, analyst and brokerfor Commodity & Derivative Advisors, located in Sandusky, Ohio.  For that reason, 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 discussion 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 suitable for all investors.  Investing in the commodity futures could result in considerable risk.  If you are interested in reading other published 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 an analysis of the factors that influenced price activity, a recap of any reports released that day, a review of each commodity’s traded price activity, and a look ahead at the schedule for the next day.  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.