Summer cattle call on tap

Market Pulse: Feb 27, 2012

COT Data

On the weekly April Live Cattle chart below, ADX shows a weak trend and Stochastics are overbought. In the Legacy COT we see Commercials adding to their net shorts, going from -28,467 contracts net short the previous week to -31,409 contracts net short this past week. Looking at the more transparent Disaggregated COT, we see Producers (True Commercials) net short -123,027 contracts net short, Swap Dealers are net long 91,618 contracts, and Managed Money are 86,135 contracts net long.

On the daily Feeder Cattle chart below, you can see that ADX, while dropping, still shows a strong uptrend at 39. +DI and –DI are converging. MACD is dropping divergence and is looking to cross the signal line down, and Stochastics are in deep overbought territory. As of Dec. 23, Trends in Futures recommended a long in April Live Cattle and is currently managing $4,487.50 in open trade equity. This will help ease the higher costs of meat this summer.

On the weekly chart of April Feeder, you can see ADX at 71, showing a very strong up-trending market. Weekly Stochastics are deeply overbought. You can see in the COT that “BIG money” has postured for higher prices since the beginning of the year. We also saw them start posturing for higher prices back in September 2011.

Make sure you look at the below reports under Fundamentals. You will see exactly why cattle moved. How long will this continue? My gut feeling here is not too long.

Commodity

12-mo low

12-mo hi

24-Feb

17-Feb

Cattle (feed)

-2,456

5,543

-2,456

-1,821

Cattle (live)

-40,877

10,437

-31,409

-28,467

Hogs

-46,574

21,270

-19,776

-20,423

Corn

-413,915

-36,487

-97,465

-101,133

Oats

-6,189

290

-1,370

-1,280

Soybeans

-193,048

28,178

-71,777

-55,948

Soybean meal

-76,105

32,081

-23,270

-9,307

Soybean oil

-91,150

29,745

-24,210

-8,297

Wheat

-11,802

87,922

72,543

72,471

Orange juice

-22,341

-9,769

-12,479

-13,977

Coffee

-38,622

1,153

-775

-1,908

Cocoa

-41,808

13,302

9,342

13,302

Sugar

-208,312

-25,626

-103,606

-73,985

Cotton

-40,143

-2,152

-13,751

-14,643

British pound

-56,162

88,682

37,994

49,164

Canada dollar

-115,190

25,942

-32,518

-24,625

Euro FX

-124,855

197,616

169,534

175,133

Japanese yen

-64,864

76,983

6,396

-14,399

Swiss franc

-42,387

26,491

22,801

21,223

US dollar index

-53,158

14,003

-35,640

-34,861

Mexican Peso

-140,414

39,901

-52,052

-43,492

Australian dollar

-110,025

479

-87,468

-87,442

S&P 500

-77,473

73,398

-22,051

-24,873

T-note -10 yr

-49,750

216,140

110,234

78,754

T-bond -30 yr

-20,389

88,803

32,055

18,505

Eurodollar

-408,407

1,126,194

-72,146

-105,875

Crude oil

-319,669

-114,385

-261,678

-231,813

Heating oil

-54,606

-4,204

-54,606

-48,988

RBOB Gasoline

-105,309

-38,417

-105,309

-101,926

Natural gas

100,801

228,910

100,801

102,831

Copper

-35,687

14,419

-7,019

-8,714

Gold

-287,634

-159,153

-229,302

-209,408

Platinum

-35,249

-18,670

-32,955

-32,436

Silver

-56,460

-14,132

-39,188

-37,310

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.

If you need help understanding how to understand how to use the NEW COT report to your benefit get instant access to my new e-book “What Lies Beneath ALL Trends”. It is filled with eye opening information.

Proceed to Page 3 for this week's detailed fundementals...

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