DTN Cattle Six Factors

TREND: The trend in February live cattle is steady.     

NONCOMMERCIAL OUTLOOK: Noncommercial traders held a net long futures position of 80,726 contracts in live cattle for the week ending Jan. 6 an increase of 2,539. 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 Jan. 6, likely hedged positions. At the time of this writing only cattle had traded in the North, but prices were higher than the previous week and it’s assumed that Southern cattle will trade higher as well.    

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

PRICE PROBABILITY: The most active futures contract (February) fell two points to the 89th percentile as traders were concerned about over doing the market’s technical position.  

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.