DTN Cattle Six Factors

TREND: The trend in February live cattle is steady.

NONCOMMERCIAL OUTLOOK: Noncommercial traders held a net long futures position of 78,794 contracts in live cattle for the week ending Dec. 23 as traders continued to be keenly aware of the market’s long-term bullish outlook, all while understanding the level of risk and volatility that’s embedded at the market at these prices points.

COMMERCIAL OUTLOOK: On the futures board, commercials remain moderately short in live cattle as of Dec. 23, likely hedged positions. The cash cattle market didn’t see much interest this week as packers ran a holiday-shortened kill schedule.

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

PRICE PROBABILITY: The most active futures contract (February) rose 5 points to the 91st percentile as traders pushed prices higher through the week.

VOLATILITY: The three-month price volatility for February live cattle remained steady at 7% as traders recognize the technical vulnerability in the market but are still acknowledging the market’s positive fundamental outlook from a long-term perspective.