MLK Holiday Leaves Limited Trading Opportunities

Even though it is a Federal holiday today with banks, schools, state and federal offices, the Post Office, stock, bond and commodity markets are closed, there are a few electronic markets that will be open for certifiable traders to get their fix.\r\n   The CME Group’s stock index futures will opened at 6:00 pm ET Sunday and will pause at 11:30 am ET today, reopening at 6:00 pm tonight.\r\n   Metals and energy futures on the CME also opened at 6:00 pm ET Sunday and will pause at 1:15 pm ET today, reopening at 6:00 pm ET tonight.\r\n   CME currency and Treasury futures opened at 6:00 pm ET on Sunday.  They are to pause at 1:00 pm ET today and reopen at 6:00 pm ET.\r\n   US ICE Dollar Index futures opened at 8:00 pm last night but will close early, at 1:00 pm ET today.  They are to reopen at 8:00 pm ET tonight.\r\n   Brent crude on ICE Futures Europe will trade regular hours.\r\n   CME Globex grains and soybeans open at 8:00 pm ET tonight, and livestock markets open at 10:05 ET on Tuesday.\r\n   Hedge funds last week took profits on short positions in grains and increased bullish positions in live cattle to a three-year high while managed money also increased its net long futures positions in agricultural commodities, according to the Commitments of Traders report from the Commodity Futures Trading Commission.  \r\n pointed out that managed money cut its net short in Chicago wheat after realizing a 20% profit since mid-October.  The switch in positions was mainly the result of short covering, although the funds did buy some new long positions as well.\r\n   What’s more, the short covering came when the markets were still moving lower and just before wheat got a shot in the arm with a sale to Egypt.  The sale wasn’t huge, but it was a sale to Egypt, the world’s largest wheat importer and tended to bolster trader attitudes about the chances for more export sales since it showed that US delivered prices now are competitive with Black Sea and EU wheat.\r\n   Managed money also cut its corn short positions last week as well after the USDA surprised traders with an estimated decrease in corn yield and production rather than the increase traders expected.  The funds remain net short; they just aren’t as short as they were.\r\n   At the same time, speculators increased their net long positions in live cattle futures, taking their most bullish position since October of 2010, said.  Bullish feelings about cattle are being fueled by tightening feedlot numbers as fall placements declined amid better pasture availability and high feedlot feed costs.\r\n   And continuing declines in the US herd suggest feedlot supplies likely will remain tight for some time.\r\n   Live cattle traded sharply higher last week as beef prices shot up and packer margins improved, market analysts said.  Cattle traded from $141 per cwt on a live basis up to $144 later in the week, for a weekly gain of $2 to $4.  On a dressed basis, cattle traded at $228 to $229, up $7 to $8 from the previous week.\r\n   The USDA reported boxed-beef cutout values were record high again on Friday with choice rising $2.92 per cwt on the day to $231.71 and select jumping $3.81 to $229.32.  The choice/select spread narrowed to $2.38, and with beef prices at record highs, the spread could narrow even more as buyers seek the cheaper select product over the choice.\r\n   For the week, the choice cutout was up $16.73, and the select cutout was up $17.74.\r\n   However, Friday’s gains were done on very little spot volume.  The USDA reported only 66 loads of fabricated cuts were sold into the spot market.\r\n   The CME Feeder cattle index for the seven days ending Thursday was $171.32 per cwt, down $0.02 on the day.  By contrast, the Jan Feeder Cattle futures contract settled Friday at $170.00, up $0.20.\r\n   ADMIS reported that some traders may expect to see a seasonal top in live cattle this week.  The market continues to hold a bullish tone with the beef and cash markets rocketing to new highs, but futures now are pricing in a lower cash price for this week, which may be psychologically damaging.\r\n