DTN Cattle Six Factors

TREND: The trend in February live cattle is steady/higher.

NONCOMMERCIAL OUTLOOK: Noncommercial traders held a net-long futures position of 84,055 contracts in live cattle for the week ending Dec. 9. Traders continue 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. 9, likely hedged positions. Packers ended up paying more money in this week’s fed cash cattle market to ensure they have enough supply over the long holiday run.

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

PRICE PROBABILITY: The most active futures contract (February) gained one point to the 86th percentile, as traders note the positive uptick in the fed cash cattle market.

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