Yeah, that cattle spread has held together despite the volatility today. Knocked off around $9.40 though. Should be interesting to see what happens next week.
I'm wondering if that sept/dec wheat trade is going to come back closer to carry again. Feeder/Live cattle I am watching both April and August to see if it will pullback some from this recent run up.
Here's an excerpt from a cattle update, take it for what it is: CATTLE - Cattle trade waited until Friday to get going as packers resisted paying up for cattle and feedlots held for higher money. By the end of the day, it looked like trade was very light at mostly steady money in the south, and steady to up $1.00 in the north. Volumes were light enough in all locations that we hesitate to even call a trend. Only about 5 thsd head traded in the south at mostly $161.00 live. In the north, live trade ranged $161.00-$163.50 live and $258-$260 dressed. With kill/cut margins back in the red, packers were determined not to pay up in most cases. Many feedlots resisted the steady bids; however, noting that cattle numbers are tightening and the best demand of the year is just ahead of the market. Packers reduced slaughter sharply last week after margins fell back down into the red. Slaughter was just 524 thsd head, 13 thsd head fewer than the previous week and down 8.7% from the same week last year. Continued heavy cattle weights resulted in beef production that was down just 5.9% from last year.
-GFQ15/+LEQ15 @ 66.325 This is a paper trade, just following along to learn this spread better. I am thinking it will pullback some from the recent run up There is a decent possibility it will just pullback slightly and explode right on up more though, so we will see.
Yeah, the LEJ/M hit resistance at $9.40 on Friday. The question is whether that $8.20 area will provide some support.
Seriously I don't what I will do with this one... BULL : - It's a retracement on former resistance, hopefully the new support. - Cash is still at 6$ premium compared to around 1$ normally, but I haven't done any statistical research on convergence near expiration( I don't have historical cash cattle prices ). BEAR: - This downward movement was too strong to be a correction. - The spread crashed way more than outrights today( it looks like large positions are rolled )...
Here it is. Scratched( almost ) half of my position here @ 8.150. Now that I am lighter, I will perhaps be able to analyze better ...LOL