Live cattle call
Last week February 2010 live cattle opened at 85.62½ and closed the week at 83.20. You can see from the technicals on the daily and weekly charts below that the downtrend is still solidly in tact. You will want to watch ADX very closely to see when this trend weakens. Also keep an eye on the MACD divergence. You should be aware of Stochastics oversold condition, but a trend this strong could stay oversold for some time. Looking at the weekly technical chart we could have a 1-2-3 bottom formation also. Looking at the COT report, we see the Commercials net long 3619 contracts. I mentioned a number of times before that I have been reviewing the new disaggregated COT report where the CFTC removes the Swap Dealers form the Commercials. This puts the information in a much better light with “true Commercials (Producer/Merchant/Processor/User)” actually net short -77,079 contracts and the Swap Dealers are net long 80,698. (For a complete report on using the COT report, the changes being made, and information on what are Swap Dealers send me an email to Gary@crbtrader.com with COT in the subject line). While I have been short this market for some time, I am watching very closely for a change. My favorite fundamental below is the dropping cold storage figure.
Charts below provided by www.pricecharts.com. 30-day trial click here!
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The numbers below represent the Commercial Net Traders positions taken from the weekly Commitment of Traders (COT) report released by the Commodity Futures Trading Commission each Friday. You will find a 12-month high and low with the past 2 weeks of data. To see the past 52 weeks of commercial data please visit www.pricecharts.com. Simply open Analysis under the Resource category at the top of the screen and click on the Commercial Tracker on the left side selection menu. You will find this to be a very interesting presentation of the commercial COT information.
Commercial Net Tracker instructions
This form tracks the Commitment of Traders (COT) data for the commodity futures market. This form "looks" at the most recent five weeks of COT data and provides visual indications of the data. A. If the current value is at a 12-month low, the cell will display a red/burgundy background. B. If the current value is at a 12-month high, the cell will display a green background. C. If the current value went from net negative to net positive, the cell will display a blue background (indicating a bullish condition). D. If the current value is both a 12-month high and also went from a net negative to a net positive, the background will be green. You should view the data with green backgrounds to determine if they also went from net negative to net positive.
| Commodity | 12-mo low | 12-mo hi | 4-Dec | 30-Nov |
| Cattle (feed) | -3,350 | 5,139 | 3,509 | 2,484 |
| Cattle (live) | -9,974 | 30,346 | 3,619 | 4,217 |
| Hogs | -15,376 | 35,452 | -15,376 | -7,709 |
| Corn | -113,201 | 81,644 | -91,193 | -58,662 |
| Oats | -4,372 | 2,198 | -4,372 | -3,981 |
| Soybeans | -112,075 | 16,898 | -88,183 | -79,935 |
| Soybean meal | -82,472 | -1,533 | -53,024 | -50,054 |
| Soybean oil | -53,692 | 20,995 | -53,692 | -51,608 |
| Wheat | -1,318 | 57,345 | 17,351 | 23,395 |
| Orange juice | -17,748 | 1,627 | -16,624 | -14,964 |
| Coffee | -37,958 | 12,520 | -29,637 | -24,876 |
| Cocoa | -44,572 | -11,214 | -44,572 | -41,626 |
| Sugar | -249,405 | -72,825 | -190,453 | -179,156 |
| Cotton | -57,834 | 16,051 | -55,848 | -57,834 |
| British pound | -1,717 | 76,698 | 8,996 | 7,575 |
| Canada dollar | -67,971 | 20,555 | -53,573 | -42,880 |
| Euro FX | -75,540 | 19,432 | -45,274 | -36,580 |
| Japanese yen | -67,682 | 20,214 | -66,127 | -59,060 |
| Swiss franc | -37,877 | 19,095 | -37,855 | -32,707 |
| US dollar index | -16,242 | 14,351 | -4,645 | -1,587 |
| Mexican Peso | -104,660 | 21,127 | -104,660 | -92,681 |
| Australian dollar | -74,823 | 6,549 | -67,523 | -63,184 |
| S&P 500 | -100,460 | -23,326 | -73,037 | -66,023 |
| T-note -10 yr | 15,365 | 230,176 | 15,365 | 73,520 |
| T-bond -30 yr | 38,327 | 163,627 | 65,325 | 102,886 |
| Eurodollar | -971,110 | -222,700 | -780,259 | -808,717 |
| Crude oil | -116,119 | 7,089 | -96,123 | -105,336 |
| Heating oil | -68,934 | -4,419 | -44,102 | -41,856 |
| Unleaded gas | -82,087 | -26,770 | -65,496 | -63,496 |
| Natural gas | 71,144 | 135,642 | 131,427 | 128,210 |
| Copper | -13,039 | 29,085 | -11,644 | -13,039 |
| Gold | -308,231 | -94,872 | -308,231 | -306,104 |
| Platinum | -27,079 | -6,629 | -27,079 | -26,164 |
| Silver | -66,004 | -24,751 | -63,824 | -64,445 |
To view the entire year of commercial data please visit www.pricecharts.com.
Fundamental:
CATTLE — Feb live cattle prices are trading on a weak note, near the bottom of their 11-month nine-cent range. Bearish factors include (1) a +1.5% rise in the overall U.S. feedlot herd as of Nov. 1 y/y, the second straight monthly increase as cheaper feed prices prompt herd expansion, and (2) demand concerns after U.S. Sep beef exports tumbled 20% y/y. Bullish factors include (1) speculation that demand will improve after the S&P 500 Index rose a 14-month high, and (2) optimism that the weak dollar will boost prospects for U.S. beef exports. Large specs as of Nov. 24 cut their large long position to 22,597. The Cattle on Feed report (Nov. 20) was neutral as cattle on feed Nov. 1 was 102% of the year-earlier level, while cattle placed on feed in October fell to 102% of the year-earlier level vs. Sep’s 106%. The Oct Cold Storage report (Nov. 20) was bullish with beef supplies in cold storage falling -9.5% y/y vs. -5.6% y/y in Sep.
Legend:
CC - consecutive closes
UTL - uptrend line
DTL - downtrend line
Charts provided by www.pricecharts.com
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