Funds Continue Liquidating Cattle Futures 2-8-16 – Large commodity funds continued liquidating long live cattle positions in the week ended Tuesday, indicating loss of confidence in a sustained rally. The new net long position of 13,124 contracts, reported Friday by the Commodity Futures Trading Commission, was the lowest by those funds, since the week ended Dec. 23 when it was 12,571 contracts. The funds’ new paosition also was down 3,079 contracts, or 19.0%, from 16,203 the previous week and down 9,935 contracts, or 43.1%, from the latest peak of 23,059 contracts set the week ended Jan. 12. Commercial traders, those who theoretically could make or take delivery of a futures contract, had a net short position of 38,029 contracts in the latest CFTC reporting week, virtually unchanged from 38,034 the previous week. It was their largest net short position since the week ended Sep. 8 when it was 42,928 contracts. The funds arrived at their new net long position by liquidating 139 long positions and adding 2,940 short positions while unwinding 2,409 spreads, the CFTC said. This left them representing 18.0% of total long open interest and 13.3% of total short open interest. The CFTC also said commercials arrived at their new position by liquidating 4,045 long positions and covering 4,050 short positions, leaving them in control of 22.7% of total long open interest and 36.5% of total short open interest. Total live cattle open interest during the latest reporting week declined 610 contracts, or 0.22%, to 276,555 from 266,165, the CME Group said. The CME also reported the most-active Apr live cattle futures contract rose to settle at $135.72 per cwt from $133.02 the previous week, a gain of $2.70, or 2.03%. FUNDS SLASH NET SHORT CORN POSITION During the week ended Tuesday, large commodity funds sliced their net short corn position by 28,141 contracts, or 30.6%, to 63,788 from 91,929. This was on top of the 71,224-contract, or 43.7%, cut made the previous week and takes these funds to their lowest net short position since the week ended Dec. 15 when it was 42,942 contracts. Commercial traders, however, added to their net short positions in the latest CFTC week. Their new position was short by 248,342 contracts, up 33,979, or 15.9%, from 214,363 the previous week. Total corn open interest during the week rose to 1.369 million contracts from 1.362 million, the CME reported, a gain of 6,527, or 0.48%. Funds arrived at their new net short corn position by adding 20,831 long positions and covering 7,310 shorts while unwinding 22,956 spreads, the CFTC said. This left them representing 12.6% of total long open interest and 17.3% of total short open interest. Commercial traders arrived at their new net short corn position by liquidating 89,984 long positions and adding 24,995 shorts, leaving them in control of 23.8% of total long open interest and 42.0% of total short open interest, the CFTC reported. During the latest week, the most-active Mar corn contract moved in a sideways channel, settling Tuesday at $3.72 ½ a bushel, compared with $3.69 ¼, the previous week. In between, the contract touched a low of $3.65 and a high of $3.73 ¾. CASH CATTLE QUIET Most cash-market trade last week took place late Friday or early Saturday. Reported trades were mostly at $136 per cwt on a live basis, down about $2 from the bulk of the previous week’s action. Dressed-basis trading was thin, with some action reported in Nebraska at $210, steady to down about $2 from the previous week. However, many sellers chose not to participate in last week’s trading. Packer bids rose to $138 live at one point but dropped back to $136, leaving many holding their showlists over until this week. The USDA reported lower wholesale beef prices Friday, with choice down $2.43 per cwt at $220.60, and select off $1.97 at $216.51. The choice/select spread narrowed to $4.09 from $4.55, and there were 73 loads of fabricated product sold into the spot market. The CME Feeder Cattle Index for the seven days ended Thursday was $159.67 per cwt, down $0.01. This compares with Mar’s Friday settlement of $153.82, down $2.70. IN OUR OPINION –Macro traders likely will keep a close eye on the direction of crude oil this week along with the actions of European banks and any tidbits from the US Federal Reserve. Many traders apparently now think further US interest rate hikes are unlikely. –Corn markets were said to be looking for direction. Usually, this means a slow grind downward as traders increasingly move to the sidelines to await something to move prices.

Lester Aldrich

Large commodity funds continued liquidating long live cattle positions in the week ended Tuesday, indicating loss of confidence in a sustained rally.

The new net long position of 13,124 contracts, reported Friday by the Commodity Futures Trading Commission, was the lowest by those funds, since the week ended Dec. 23 when it was 12,571 contracts.

The funds’ new paosition also was down 3,079 contracts, or 19.0%, from 16,203 the previous week and down 9,935 contracts, or 43.1%, from the latest peak of 23,059 contracts set the week ended Jan. 12.

Commercial traders, those who theoretically could make or take delivery of a futures contract, had a net short position of 38,029 contracts in the latest CFTC reporting week, virtually unchanged from 38,034 the previous week.  It was their largest net short position since the week ended Sep. 8 when it was 42,928 contracts.

The funds arrived at their new net long position by liquidating 139 long positions and adding 2,940 short positions while unwinding 2,409 spreads, the CFTC said.  This left them representing 18.0% of total long open interest and 13.3% of total short open interest.

The CFTC also said commercials arrived at their new position by liquidating 4,045 long positions and covering 4,050 short positions, leaving them in control of 22.7% of total long open interest and 36.5% of total short open interest.

Total live cattle open interest during the latest reporting week declined 610 contracts, or 0.22%, to 276,555 from 266,165, the CME Group said.

The CME also reported the most-active Apr live cattle futures contract rose to settle at $135.72 per cwt from $133.02 the previous week, a gain of $2.70, or 2.03%.

 

FUNDS SLASH NET SHORT CORN POSITION

 

During the week ended Tuesday, large commodity funds sliced their net short corn position by 28,141 contracts, or 30.6%, to 63,788 from 91,929.  This was on top of the 71,224-contract, or 43.7%, cut made the previous week and takes these funds to their lowest net short position since the week ended Dec. 15 when it was 42,942 contracts.

Commercial traders, however, added to their net short positions in the latest CFTC week.  Their new position was short by 248,342 contracts, up 33,979, or 15.9%, from 214,363 the previous week.

Total corn open interest during the week rose to 1.369 million contracts from 1.362 million, the CME reported, a gain of 6,527, or 0.48%.

Funds arrived at their new net short corn position by adding 20,831 long positions and covering 7,310 shorts while unwinding 22,956 spreads, the CFTC said.  This left them representing 12.6% of total long open interest and 17.3% of total short open interest.

Commercial traders arrived at their new net short corn position by liquidating 89,984 long positions and adding 24,995 shorts, leaving them in control of 23.8% of total long open interest and 42.0% of total short open interest, the CFTC reported.

During the latest week, the most-active Mar corn contract moved in a sideways channel, settling Tuesday at $3.72 ½ a bushel, compared with $3.69 ¼, the previous week.  In between, the contract touched a low of $3.65 and a high of $3.73 ¾.

 

CASH CATTLE QUIET

 

Most cash-market trade last week took place late Friday or early Saturday.  Reported trades were mostly at $136 per cwt on a live basis, down about $2 from the bulk of the previous week’s action.

Dressed-basis trading was thin, with some action reported in Nebraska at $210, steady to down about $2 from the previous week.

However, many sellers chose not to participate in last week’s trading.  Packer bids rose to $138 live at one point but dropped back to $136, leaving many holding their showlists over until this week.

The USDA reported lower wholesale beef prices Friday, with choice down $2.43 per cwt at $220.60, and select off $1.97 at $216.51.  The choice/select spread narrowed to $4.09 from $4.55, and there were 73 loads of fabricated product sold into the spot market.

The CME Feeder Cattle Index for the seven days ended Thursday was $159.67 per cwt, down $0.01.  This compares with Mar’s Friday settlement of $153.82, down $2.70.