Longs Keep Leaving; Cattle Futures Try to Find Footing Posted on 01/21/2015 by The Beef By Cassie Fish, CassandraFish After another brisk volume flush yesterday that peeled away more open interest, CME cattle futures are attempting to hold yesterday’s lows today. Indeed, live cattle futures OI dipped to the lowest level yesterday since October 2009 and is only 57k above the economic melt-down low made that same year. OI now stands over 120k below the high and 90k below a year ago. And there’s nothing to support the theory that long speculators will be headed our way again soon. Today’s action feels very anticlimactic after yesterday’s dramatic limit down move followed by a triple digit rally. Futures are oversold so pressing down here carries extra risk. Still a forecast for 5-7 inches of snow in the next 24 hours or so in the Texas Panhandle area can’t give this market a boost either, leaving traders wondering if a corrective rally can be staged from here or another flush is imminent. Cash Values Soft The news in the cash markets is pretty much as expected. A few cattle traded $3-5 lower already and boxed beef prices printed lower as expected. Last week’s negotiated cattle trade volume was unimpressive, returning to the suppressed levels seen in December and seemingly inadequate, though packers do own big forward contract numbers for February and will likely sidestep their way through the rest of January attempting to keep pressure on fed cattle prices and margins black as they go. With margins black, this week’s slaughter is estimated in the 550,000-560,000 head range. Lallemand BannerBoxed beef volumes last week were also light with only formula sales well above year ago and the 5 year average and all other categories the opposite, below a year ago and well below the 5 year average, as end user purchases slowed as wholesale beef prices rose and futures fell. Bull Spreads Continue to Work On the positive side, Feb and Apr LC are gaining on just about all other cattle contracts except Mar FC. A push above today’s highs made on the opening would go a long way to spark short-covering and set up a look at yesterday’s highs, which if taken out, would cinch a short-term low had been made. The Beef is published by Consolidated Beef Producers…for more info click here. Disclaimer: The Beef, CBP nor Cassie Fish shall not be liable for decisions or actions taken based on the data/information/opinions.
Posted on: Thu, 22 Jan 2015 00:29:56 +0000
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