<\/p>\n<\/a>Livestock<\/u> –
\nIf it felt yesterday that I was picking on cattle hedgers for being short as the market went higher, I apologize.\u00a0 Today I want to present the spec positioning as shown on the latest COT report.\u00a0 The attached chart shows the percentage of open interest that MM and index traders comprise in cattle.\u00a0 As you can see, this is near its highest level since the previously mentioned 2014 futures rally.\u00a0 Intuitively, it makes complete sense that a large hedge position from the feeder would likely be offset to a large degree by a large spec long position.\u00a0 Still I think it is worth noting how big the position is.\u00a0 If I chose to produce a chart showing just the total MM and index trader net position, the total would be larger than what we saw in 2014 (larger aggregate open interest keeps the % lower).<\/p>\n
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So while in 2014 it was the feeder that ended up being squeezed (higher) it doesn\u2019t necessarily have to end up that way this time.\u00a0 Placement data certainly indicates summer supplies will be increasing and it sounds like early estimates for March placement figures are impressive.\u00a0 So, to repeat, just because positioning is set up similarly to 2014, it doesn\u2019t mean the market action will be the same.<\/p>\n
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