I've been following the COT for the cattle complex for a bit and have been following the commercials for a bit. The "funds" , or non commercials, according to my work had a statistically significant reduction in their net long position over the last two COT readings. (this 7/06 release not included yet). It seems to me the commercials took the other side of that trade and seem to have made the right decision as Live Cattle has turned higher as of late. I've been using 15 week moving average on COT positioning as a percentage of open interest for each trader category and a violation of 2 standard deviations of the average reading as a "flag" to signify a statistically significant alteration in positioning. Seems commercials saw Live Cattle bottoming into late June and took advantage of that. We'll see. My last position in Cattle was long a 94/92 put spread in October cattle for 70 pts that I then closed for a scratch when my bearish themes didn't play out. Quite frankly, living in Dallas and seeing all the rain we've got made me seriously reconsider pasture conditions and think of less pressure arising from animals being dumped into feedlots. However, pasture conditions overall in the US aren't that much different from last year considering the drought in the West and Southeast ; and from what I read recently there are more cattle in those regions than in the Panhandle/Southern areas. So - could we see more liquidation and cattle moving into feedlots ? Should this rally be faded ? Boxed Beef prices haven't turned around that dramatically either. Today from reading the news it seems the market turned higher on bullish export data. But is it really meaningful? Anyway, it seems a bit early in the season to get all bullish on Live Cattle but with an absence of drought conditions in the Panhandle maybe not... What caught my eye were Feeder's today. Corn was up but given its recent massacre perhaps the market feels that in general feeding cost pressures have diminished a bit and Feeder's looked cheap to Live Cattle. Does one buy Live Cattle here and short Feeders expecting better feedlot profitability going into Fall ? Any views appreciated.