This analysis is making an assumption the Cash Indexes reflect the actual cash markets. Something I’m not sure of at this time.
Live Cattle (Cash Index): The Index took out its previous 4-month low of $224 during November, on its way to a monthly low and settlement of $215. This was down $23 (9.7%) and confirmed a new major (long-term) downtrend. The Index is in position for a possible bearish gap down during December. Theoretical Positions: Long-term investors likely shorted cattle on the move to a new 4-month low during November, putting the position at roughly $223.
Feeder Cattle (Cash Index): The cash index extended its major downtrend to a low of $329.88 during November before closing at that price, down $13.45 (3.9%) for the month. Recall the index completed a bearish key reversal at the end of October telling us the major trend had turned down. Theoretical Positions: Long-term investors likely sold the market near the October settlement of $343.33 based on the completed bearish key reversal.
Lean Hogs (Cash Index): The Index extended its major downtrend during November, hitting at closing at the low of $82.27, down $8.71 (9.6%) for the month. Theoretical Positions: Long-term investors may have shorted hogs near the new 4-month low of $96.30 during October, but are most likely on the sidelines at this time.
