DTN Cattle Six Factors

TREND: The trend in February live cattle is steady.     

NONCOMMERCIAL OUTLOOK: Noncommercial traders held a net-long futures position of 75,391 contracts in live cattle for the week ending Dec. 16. 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. 16, 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) fell one point to the 86th percentile as traders held the market merely steady through the shortened holiday week.  

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.