Can bearish COF help cattle spreads?

By | April 26, 2015

I’ve been short a cattle spread (LE V5 – LE G6) for a little over a week and it’s been a tale of two extremes.

I picked a beautiful entry at parity and immediately saw it move my way. However in the last few days it’s really retraced on what looks like a little bit of short covering.

On Friday we got the cattle on feed report and that proved to be bearish versus expectations with placements coming in higher.

cattle-on-feed-placements-usda-john-otte-farm-futures-march

I’ve moved my stop to breakeven so Monday looks like a make or break session for this spread.

LE