Live cattle futures trading took on a more bearish tone during the week ended Tuesday as large commodity investment firms, known as managed money, and commercial traders, those who own the cattle, took on larger net short positions.
The data came from the Commodity Futures Trading Commission’s weekly Commitments of Traders report Friday.
That data showed that managed money’s new collective net short position in live cattle futures amounted to 5,336 contracts, up 3,462, or 184.7%, from being short by 1,874 contracts the week before. It was their largest net short position since Sep. 24 when it was short by 9,189 contracts.
At the same time, the collective net short position of all cattle owners, called commercials, who mostly are hedgers, came to 84,359 contracts, up 2,785, or 3.41%, from 81,574 the previous week. It was their first gain in their net short position since the week ended Jan. 21.
The CFTC said managed money arrived at its new net short cattle position by liquidating 9,387 long positions, covering 5,925 short positions and unwinding 14,903 spread positions. This left their position representing 15.3% of total long open interest, 17.2% of total short open interest and 11.0% of total spread open interest.
Commercials got to their new short cattle position by adding 133 long positions and 2,918 short positions, leaving them in charge of 18.8% of total long open interest and 49.4% of total short open interest.
The CME Group said total live cattle open interest as of Tuesday was 275,694 contracts, down from 299,434 the previous Tuesday.
CME data also showed that the most-active Jun live cattle futures contract’s price rose $7.27 per cwt, or 8.10%, during the CFTC reporting week to $97.02 per cwt from $89.75. It has since set a swing top of $99.77 on Wednesday and then fell away to close Friday at $89.42.
FUNDS ALSO SHORT CORN
During the CFTC week, managed money also took on a larger net short position in Chicago corn futures, ending Tuesday with a net short position of 112,225 contracts, up 18,386, or 19.6%, from 93,839 the previous week. It was their largest net short position since Dec. 10 when it was short by 118,449 contracts.
Commercials, on the other hand, got even less short, taking on a net short position Tuesday of 164,048 contracts, compared with 196,616 the week before, a decline of 32,568, or 16.6%. It was their smallest net short position since May 14 when it was short by 21,856 contracts.
The CFTC said managed money arrived at its new corn position by liquidating 18,394 long positions, covering eight and unwinding 41,263 spread positions. This left their short position representing 10.0% of total long open interest 18.1% of total short open interest and 12.8% of total spread open interest.
Commercials got to their new position by adding 18,028 long positions and covering 14,540 short positions, leaving them with 31.8% of total long open interest and 43.7% of total short open interest.
CATTLE, BEEF RECAP
Cash cattle traded in the Plains last week at $118 to $120 per cwt on a live basis, up $6 to $7 from the previous week, and at mostly $190 on a dressed basis, up $5 to $10.
The USDA choice cutout Friday was down $0.73 per cwt at $252.84, while select was up $0.21 at $242.38. The choice/select spread narrowed to $10.46 from $11.40 with 83 loads of fabricated product sold into the spot market.
The CME Feeder Cattle index for the seven days ended Thursday was $130.44 per cwt, up $1.94. This compares with Friday’s Apr contract settlement of $120.60, down $4.50.