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Z6634 FC LC/FC Ratio Signal

CME LC/FC ratio z-scored on one year as a Grade B+ directional signal with independent-sample confirmation on CME Feeder Cattle forward returns.

At a glance

As of Oct 30, 2026. Updated nightly.

OBJECTIVE

CME Live Cattle divided by CME Feeder Cattle reads the relative pricing between finished and feeder cattle. The ratio compresses when feedlot producer margins come under pressure (feeders expensive relative to finished cattle); it expands when finished cattle trade firm relative to feeders. Historically the a-priori economic logic is: low LC/FC = margin stress = placement cuts = bullish FC 60-90 days forward. This signal z-scores the LC/FC ratio on a 252-day rolling window and bounds with tanh. In practice the empirical mapping is the mirror image of the a-priori read: positive composite (high LC/FC) corresponds to bullish FC fwd60d, negative composite (low LC/FC) corresponds to near-neutral FC fwd60d. The engine declares this truth-inverse polarity explicitly. The memorable finding: Grade B+ directional. Daily Spearman IC against FC fwd60d is plus 0.166 at p-value below 1e-55 across 8,989 observations. Non-overlapping (every-60-day) IC is plus 0.203 at p-value 0.013 across 150 independent samples — INDEPENDENTLY SIGNIFICANT. Phase +1 (High LC/FC) delivers +3.24% fwd60d (+2.03 pp above baseline, hit 63%). Phase -1 (Low LC/FC) delivers +0.11% (-1.10 pp below baseline, near-neutral). Phase 0 delivers +0.04%. The actionable band is Phase +1 only. Current reading: Low LC/FC extreme-negative at composite minus 0.995 (saturated-negative) — the ratio is deeply compressed. Historical Phase -1 delivers near-neutral fwd60d. The signal is DORMANT as a directional read; watch for transition to Phase +1 (High LC/FC) for an actionable bullish-FC read. Read on for the anchor cases and how to pair with the FC fundamental stack.

LIVE CHART

THE TAKEAWAY

THE REGIME MAP

Computed from 8,989 trading days with observable FC fwd60d. Baseline FC fwd60d (unconditional): plus 1.20 percent mean. Grade B+ directional signal with independent-sample confirmation. Engine polarity truth-inverse.

The historical pattern

THE TRACK RECORD

Scroll inside the table for the full history. Forward 60-day FC is measured from each run’s start date; a reader cannot trade off a start-date they only identify in hindsight, so this is a transparency log, not an alpha claim. Asterisked (*) returns are partial. The run is less than 60 trading days old. The full 60-day comparable fills in as more data arrives.

The signal pulls CME Live Cattle and CME Feeder Cattle back-adjusted continuous closes, computes the LC/FC ratio, z-scores on a 252-day rolling window with 63-day minimum sample, clips to [-3, +3], and bounds with tanh. Engine declares truth-inverse polarity: positive composite = HIGH LC/FC = empirically bullish FC forward. State thresholds plus or minus 0.2 (moderate) and plus or minus 0.5 (extreme). Daily release.

Not investment advice · The analysis on this page is informational and educational. Signal readings, historical case figures, and empirical statistics are derived from publicly available data and are provided without warranty. Hypothetical performance results have inherent limitations, including the benefit of hindsight. Readers who intend to trade should consult a licensed investment professional and see the research brief for the full disclaimer.

Last refreshed Nov 01, 2026 03:15 PM ET