Long Liquidation Pressures Cattle as Rumors Swirl
Rumors of a boarder reopening led to long liquidation in Thursday’s trade. More pressure to come or a buying opportunity.
Feeder Cattle (March)
Feeder cattle futures are feeling a little wobbly with a very lopsided fund position. The market was sharply lower yesterday morning as rumors of 200-300k head of cattle ready to cross the border when the Mexico border reopens on March 1st. We haven’t seen anything definitive from US or Mexico authorities but see where this story was published from news outlet in Arizona:
“Mexico says the border should be reopening for cattle exports to the U.S. soon. It’s been closed for more than a month, after a flesh-eating worm parasite was reported in a cow in southern Mexico. The state of Sonora’s agriculture secretary said the U.S. Department of Agriculture has finished its inspection of the cattle border crossings between Arizona and Mexico. Mexico is now making changes at the Agua Prieta and Nogales crossings, which it said will be done in a week.
After that, U.S. authorities will reinspect and decide whether to re-open the crossings. The United States closed its southwest border to cattle imports in November, after a New World Screwworm case was detected in a cow in the south of Mexico. The parasitic fly larvae burrow into the flesh of warm-blooded animals and can often be fatal. They were eradicated from the United States in 1966.”
Resistance: 270.05-271.00*
Pivot: 266.75-267.75
Support: 263.00-263.27**, 260.075-260.70****
Seasonal Tendency Update
(updated 1.13.25)
Below is a look at historical price averages for March futures on a 5, 10, 15, 20, and 30 year time frames (Past performance is not necessarily indicative of future results).
Commitment of Traders Report
(Updated on 1.14.25)
Monday’s Commitment of Traders report showed Funds were net buyers of about 4,500 contracts, expanding their net long position to a record 26,384. Nobody knows when the party ends, but I think we all have a good idea of how it ends.
Lean Hogs (February)
February lean hogs retreated yesterday as sellers took the recent rally in prices as an opportunity to exit a very large net long position. The market settled right near our pivot pocket from 82.05-82.27. A failure here and we could see lower lows in the not too distant future. Important to note that volume is shifting out to the April contract.
Resistance: 83.97-84.30***, 86.50-87.00****
Pivot: 82.05-82.27
Support: 80.75-81.20**, 78.90-79.20****
Seasonal Tendency Update
(updated 1.13.25)
Below is a look at historical price averages for February futures on a 5, 10, 15, 20, and 30 year time frames (Past performance is not necessarily indicative of future results).
Commitment of Traders Report
(Updated on 1.14.25)
Monday’s Commitment of Traders report showed Funds continued to liquidate long positions about 12k contracts. Their net long position drops down to 97,190, which is still historically lofty.
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