On the weekly charts for both Live Cattle and Feeder Cattle you see that on the COT Legacy report Commercials are now at a 12-month high in their net positions. On the more transparent Disaggregated report on the weekly chart of Live Cattle you can see Producers liquidating net shorts and Managed Money liquidating net longs. This past week we saw a slight increase in Swap Dealer net longs. Now look back to the end of 2009, you can see live cattle was trading round $80.000. On the disaggregated report you can see what happened with increased buying and selling in “big” money. Looking at the liquidation between April-June 2011 you see the price action reached below $105. Then you see the next increase in buying and selling pushed the market to the high of $130.000. Take a real good look now, where will prices be pushed up to when we see increased buying and selling with the lows at $115.000. Will we see $145.000 in Live Cattle? If so, when? You know what to watch for now, so do not miss it.
In Feeder Cattle Producers and Swap Dealers are both net long reflecting at this time “big” money is not posturing for higher prices.
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.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.
Proceed to Page 3 for this week's detailed fundementals...