Large commodity funds, or managed money, increased their net long live cattle futures position during the week ended Tuesday to its largest in more than two months while commercial traders upped the ante on their net short positions.
During the week ended Tuesday, managed money’s net long live cattle position jumped 18,856 contracts, or 83.6%, to 34,815 from 18,959 the previous week, according to the Commodity Futures Trading Commission’s weekly Commitments Of Traders report Friday.
At the same time, commercial traders, those who theoretically can make or take delivery of a futures contract, boosted their net short position by 13,623 contracts, or 21.4%, to 77,418 from 63,795. This is their largest net short position since the week ended March 29 when it was 78,048.
The CFTC said managed money arrived at its new net long position by adding 3,648 long positions and liquidating 12,208 short positions while unwinding 5,820 spreads. This left them representing 24.7% of total long open interest and 11.8% of total short open interest.
Commercial traders got to their new positions by liquidating 6,795 long positions and adding 6,828 short positions, leaving them in control of 14.4% of total long open interest and 43.3% of total short open interest.
Total live cattle open interest during the latest CFTC reporting week declined 6,057 contracts, or 2.21%, to 268,300 from 274,357, the CME Group said.
The most-active Aug futures contract spent most of its time during the latest week in a narrow trading range at the top of its latest rally attempt, gaining only $0.03 per cwt to end at $119.80, compared with $119.77 the previous week.
FUNDS ANTE UP ON CORN
During the latest week, the CFTC said managed money upped the ante on their net long corn futures positions to 54,077 contracts from 35,554, a gain of 18,523, or 52.1%.
At the same time, commercial traders raised their net short position during the week by 17,791 contracts, or 5.20%, to 359,920 from 342,129.
The CFTC said managed money arrived at its new net long corn position by adding 8,610 new long positions and covering 9,913 short positions while unwinding 1,256 spread positions. This left them representing 15.2% of total long open interest and 11.2% of total short open interest.
Commercial traders got to their new net short position by adding 9,669 long positions and covering 26,460 short positions, leaving them in control of 25.1% of total long open interest and 51.7% of total short open interest.
The CME Group said total corn open interest during the latest CFTC week rose 27,789 contracts, or 2.10%, to 1.353 million from 1.325 million.
The most-active Jul futures contract price rose sharply during the week to close at $3.97 a bushel from $3.81 a week earlier. The contract hit its nearby bottom on Tuesday, May 10, and only rallied for one more day past the CFTC week’s rally before topping out.
CASH CATTLE MARKET $1 TO $3 LOWER
Cash cattle markets last week were $1 to $3 per cwt lower at mostly $130 to $132 on a live basis. All showlist cattle did not appear to trade, however, as feedlots were asking $136 to $137 live. In dressed markets, cattle sold around $204 to $206. Bids were posted at $205 to $206 against asking prices of $215.
The USDA’s choice cutout Friday was $1.20 per cwt lower at $225.96 per cwt, while select was off $2.73 at $208.42. The choice/select spread widened to $17.54 from $16.01 with 62 loads of fabricated product sold into the spot market.
The CME Feeder Cattle Index for the seven days ended Thursday was $148.53 per cwt, up $0.24. This compares with the May settlement Friday of $148.62, up $0.35.
IN OUR OPINION
–The USDA’s April Cattle-On-Feed report Friday likely will be considered bearish to futures prices this morning. Early calls are for futures to open $0.50 lower to limit down. Deferred contract months likely will receive the lion’s share of the pressure since placements were well above the average of trade estimates.
–Economic data point to a sooner-rather-than-later bump in the Federal Funds interest rate. The Consumer Price Index is close to the Fed’s target, and existing home sales were better than expected.
–The downside to higher interest rates is the resulting strength of the US dollar, which cuts into the competitiveness of US products in overseas markets.