Aug Feeder Cattle.

Anyone have an idea of why December live cattle was up .42 while October was down .32 ? I guess June was up on live cash trade expectations which happened around 83-4 last week.

Any color as to the interrelationships of the months based on fundamental cash themes appreciated.
 
Other than spreading by locals I am not really sure. There may have been some option action that helped the move. I know some feedlots that are moving hedges from August into the fall months and quite a few light cattle are being consigned and placed on feed to be fat against the fall contracts.
 
The above description of conditions in the Cattle and FC pits is a key to the riddle how the Junior Senator from NY (back at the time when her husband was the governor of Arkansas) made 100K in Cattle futures starting with 1K.

No paper trail, brokers switching orders, upstairs crooked allocations, slipping good trades to certain parties and the loosing side to Joe Public. The CFTC looked into this
and they have not found anything improper because they have not asked even one person who new how the business operates.

I remember my wife giving me a hard time that I was not making the kind of as fantastic returns in trading as a full time trader as the wife of the Governor did. When she was asked how she parlayed 1K into 100K she said she read the WSJ almost daily (LOL)
 
Some of that is certainly is true although it is far better than in the past. There used to be many bad brokers, there are less today. You can work directly with a floor broker if you have a good broker or trade a large account or are a commercial (we are) at a brokerage that specializes in cattle.

When I hear about someone daytrading cattle I just laugh and say its not possible with the pit structure.
 
i read stuff about a"prominent feeder cattle trader" buying/selling large amounts on certain days. so i was wondering,what is considered a large order for the feeder pits?:)
 
Quote from battle river:

i read stuff about a"prominent feeder cattle trader" buying/selling large amounts on certain days. so i was wondering,what is considered a large order for the feeder pits?:)
More...

Well most days volume is only a few thousand contracts and there is one prominent local that is often the volume trader. I am guessing that one could trade a couple hundred contracts if they worked with this local to get the order filled.
 
very confused to see the mixed price action in different months in live cattle:

june july down and october december up. i keep on reading that the october december spread is a "battleground" in the pit. i have no clue why this is such a popular spread.

everyone now thinks cattle should be shorted, seasonals, robust supplies blah blah, but others feel may placings where low which could boost cattle.

other dumb question. what is "dressed" cattle?

also from the commercials on the board, why feeders for oct and nov get whacked harder today?
 
The most likely reason for the heavy trading in the oct/decs spread is the influence of long only commodity index funds. They are long August and October and will be rolling positions to October and December when the time comes. There are also some large fund accounts that are long Oct. short December that are adding to the mix.

There really is no July contract but the nearby contracts have been lower due to cash market dissapointment. Placements have actually been much higher and in addition the placements of lighter weight feeder cattle have been higher due to dry conditions in the central and souther plains and the strength of the deferred contracts.

cattle sold as dressed versus live means they are bought or priced based upon the finished carcass weight. Dressed carcass weights are generally .63 that of Live Cattle so they sell for a higher amount per pound to equalize the two methods of selling fat cattle.

Feeder cattle were probably down due to the strength in December corn or hedging action from commercials or crush trades put on by commercials.

Remember, a lot of the day to day action in the cattle market is just spreading by locals and is sometimes tought to gauge.

Quote from criveratrading:

very confused to see the mixed price action in different months in live cattle:

june july down and october december up. i keep on reading that the october december spread is a "battleground" in the pit. i have no clue why this is such a popular spread.

everyone now thinks cattle should be shorted, seasonals, robust supplies blah blah, but others feel may placings where low which could boost cattle.

other dumb question. what is "dressed" cattle?

also from the commercials on the board, why feeders for oct and nov get whacked harder today?
More...
 
Def. don't use a market order w/ a pit traded comdt under any circumstances. An old trick alot of brokers/locals use is to go 'half and half' on 'em....i.e. you wanna buy 100 at market, local wants to sell at 10, broker wants to pay 5....they do half the order at each price as a compromise. Against the exchange rules, cause its an arranged trade, but it happens all the time and the customer gets the bad fill.

You gotta determine w/ your strategy whats important...if your playing small moves/tight stops then getting a fill at a price might be the difference between the trade happening or not. If your in it for bigger moves maybe its just you wanna get long below a certain price.

I can tell you though, by the way these guys trade, alot of what would appear as S/R on charts are the locals leaning on big paper orders. Example...paper (bank/fund/whatever) has to sell maybe 10,000 at 10....another has to pay 5 on 10,000....the locals know these paper orders and lean on them...they will buy 5's and sell 10's all day, all week, whatever, untill their lean starts 'coming down' or gets filled.
 
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