Live Cattle futures spreads: Neutral-Bullish

  • The April-June closed February at $3.075
    • as compared to the end of January settlement at $5.075
    • with the previous 5-year average weekly close for the last week of February at $4.095
  • The June-August closed February at $1.35
    • as compared to the end of January settlement at $2.75
    • with the previous 5-year high weekly close for the last week at February at $1.30
  • The August-October closed February at $0.575
    • as compared to the end of January settlement of $0.675
    • with the previous 5-year high weekly close for the last week of February at (-$2.225)
  • Bottom Line: While futures spreads showed some light commercial selling during February, the monthly settlement continued to show a longer-term bullish fundamental outlook. The August-October spread stood out given it closed February $3.00 over its previous 5-year high monthly close. We’ll see if this changes during March.

Feeder Cattle futures spreads: Bullish

  • The March-April closed February at $4.225
    • as compared to the end of January settlement at $2.00
    • with the previous 5-year high weekly close for the last week of January at $1.00
  • The April-May closed February at $4.00
    • as compared to the end of January settlement at $3.15
    • with the previous 5-year high weekly close for the last week of February at $1.875
  • Bottom Line: Commercial traders continued to support the feeder cattle market both short-term (March-April) and longer-term (April-May).

Lean Hogs futures spreads: Neutral

  • The April-June closed February at (-$13.825)
    • as compared to the end of January settlement at (-$12.775)
    • with the previous 5-year average weekly close for the last week of February at (-$11.35)
  • The June-August closed February at (-$1.025)
    • as compared to the end of January settlement at (-$0.15)
    • with the previous 5-year average weekly close for the last week of February at (-$0.025)
  • The August-October closed February at $17.675
    • as compared to the end of January settlement at $17.075
    • and the previous 5-year average weekly close for the last week of January at $16.925
  • Bottom Line: Lean hogs saw some commercial selling in both the April-June and June-August futures spreads, though not enough to change the short-term and intermediate-term neutral readings on supply and demand. The longer-term August-October spread grew more bullish during February.