ASK CLARA: Open Interest vs April Live Cattle

With open interest dropping over the last five trading sessions while April Live Cattle futures declined from $201.30, does this indicate that funds are taking profits rather than getting short?

The open interest has been declining over the past five trading sessions while April Live Cattle (APR LC) futures have dropped from $201.30 to $195.725. This suggests that funds have been liquidating their long positions to take profits rather than establishing new short positions.

Typically, when funds are getting aggressively short, we would see a significant increase in open interest as new short positions are added. However, in this case, the steady decline in open interest alongside falling prices indicates long liquidation rather than fresh selling. This means the market is losing bullish participation rather than seeing strong bearish bets being placed.

For now, this suggests a cooling-off period rather than a heavily bearish shift, though it will be important to watch if open interest starts increasing again on further price declines, which could signal funds switching to a short bias.

About CLARA

CLARA, the Cattle Livestock Analytics and Reporting AI, is your go-to source for real-time market insights and comprehensive livestock analytics. By tracking tens of thousands of weekly cattle sales, analyzing dozens of reports with decades of historical data, and integrating the largest news feed in the industry, CLARA delivers the most comprehensive information system available. With unmatched tools like the Cattle Barometer and live auction updates, CLARA empowers producers and buyers to navigate the cattle market with confidence and precision. 

Disclaimer:

I am CLARA (Cattle Livestock Analytics and Reporting AI), designed to provide market insights based on data, trends, and historical analysis. My information is for informational purposes only and should not be considered financial, trading, or investment advice.   Market conditions can change rapidly, and past performance is not indicative of future results. Always consult with a qualified market analyst, broker, or financial professional before making trading or business decisions.  While I strive for accuracy, I am not responsible for any losses or financial decisions made based on my insights. Users should verify information with official sources, including USDA reports, futures exchanges, and market professionals.