Morning Livestock Report, 11/18/2015

Wednesday, November 18, 2015

The cattle markets maintained their volatile ways yesterday, with most-active Feb live and Jan feeder cattle trading in $5 and $6 ranges within the first 25 minutes of the session. Futures settled higher and again did so on large trade volume but barely any change at all in open interest, a combo that has become common in recent weeks. The big volume, small average trade size, and nary a change in open interest sure gives the look of a market dominated by high frequency traders, many of which are in and out in the same session. Maybe not coincidentally, the CFTC has just announced an open meeting on Nov 24th to discuss “automated trading” regulations, perhaps finally acknowledging the HFT’s role in our markets. Lost in the volatility and limit moves of late has been a continued improvement in forward crush margins as the feeder-fat spread continues to correct lower. Several forward crush spreads have moved $100/head since the first of August. A rebuilding herd and increased feeder cattle availability should help support crush spreads and forward feeding margins well into 2016.

Unless otherwise noted, the posts on this blog should be construed as market commentary, merely observing economic, political and/or market conditions, and not intended to refer to any particular trading strategy, promotional element or quality of service provided by INTL FCStone Inc. or its subsidiaries. INTL FCStone Inc. is not responsible for any trading decisions taken by persons viewing this material. Information contained herein was obtained from sources believed to be reliable, but is not guaranteed as to its accuracy. These materials represent the opinions and viewpoints of the author, and do not necessarily reflect the viewpoints and trading strategies employed by INTL FCStone Inc. or its subsidiaries. Reproduction without authorization is prohibited. All rights reserved.

Market Intelligence Free Trial