DTN Cattle Six Factors

TREND: The trend in April live cattle is steady/somewhat lower.     

NONCOMMERCIAL OUTLOOK: Noncommercial traders held a net-long futures position of 85,939 contracts in live cattle for the week ended Jan. 13 an increase of 5,213, as traders continued to be keenly aware of the market’s long-term bullish outlook, but were subject to some turmoil this past week when rumors circulated and everyone was reminded just how volatile the cattle complex can be.  

COMMERCIAL OUTLOOK: On the futures board, commercials remain moderately short in live cattle as of Jan. 13, likely hedged positions. It was assumed that fed cash cattle prices would trade higher this week, but instead the week’s trend was steady — most likely because of the board’s chaos on Friday.

SEASONAL INDEX: Cash cattle prices tend to peak in March and bottom in October.

PRICE PROBABILITY: The most active futures contract (April) fell one point to the 88th percentile as traders were concerned about over doing the market’s technical position and were concerned about lingering NWS rumors ahead of the long weekend.

VOLATILITY: The three-month price volatility for April live cattle fell to 6% (down one point) as traders recognize the technical vulnerability in the market but are still acknowledging the market’s positive fundamental outlook from a long-term perspective.