Funds Cut Live Cattle Positions Again 7-12-21 – For the second straight week, large commodity investment funds, known as managed money, cut their collective net long live cattle futures position while hedgers raised their net communal short position. The data came from the Commodity Futures Trading Commission’s weekly Commitments of Traders report Friday listing trading positions as of Tuesday. FUNDS CUT LONG CATTLE POSITIONS The new net long live cattle futures positions of managed money on Tuesday was 58,417 contracts, down 3,377, or 5.46%, from 61,794 a week earlier. It was their smallest net long position since June 8 when it was 50,427 contracts. The new net short position of hedgers Tuesday, those who own the cattle at some point and are known as commercial traders, was 151,776 contracts, up 1,283, or 0.85%, from 150,493 a week earlier. The CFTC said managed money arrived at their new cattle position by liquidating 3,379 long positions, covering two short positions and putting on 1,455 spread positions. This left them in control of 27.1% of total long open interest, 7.7% of total short open interest and 11.2% of total spread open interest. Commercial traders got to where they were Tuesday by liquidating 79 long positions and adding 1,204 short positions, leaving with 7.1% of total long open interest and 57.5% of total short open interest. The CME Group said total live cattle open interest Tuesday was 301,276 contracts, up 3,026, or 1.01%, from 298,250 the previous Tuesday. The CME also said the most-active Aug live cattle futures contract had a net weekly gain Tuesday, settling at $122.40 per cwt, compared with $121.92 a week earlier. However, it rose to a high of $123.57 on Thursday and has fallen since then. FUNDS SELL MORE CORN For the fifth straight week, managed money got less long Chicago corn futures, ending Tuesday with 217,410 contracts, down 21,068, or 8.83%, from 238,478 a week earlier and down 72,690, or 25.1%, from the most recent high of 290,100 on June 1. Commercials’ new net short position Tuesday was 540,314 contracts, down 20,151, or 3.60%, from 560,465 and down 125,231, or 18.9%, from the most recent high of 666,545 on June 1. The CFTC said managed money arrived at their new net long corn position by liquidating 6,860 long positions, adding 14,208 short positions and putting on 11,214 new spread positions. This left them holding 17.5% of total long open interest, 3.2% of total short open interest and 11.0% of total spread open interest. Commercials got to where they were by liquidating 2,599 long positions and covering 22,750 short positions, leaving them with 26.4% of total long open interest and 62.1% of short open interest. CATTLE, BEEF RECAP Fed cattle traded last week at $120 to $125 per cwt on a live basis, steady to down $1.50 from the previous week, and at $196 to $202 on a dressed basis, down $1 to $2. The USDA choice cutout Friday was down $3.38 per cwt at $278.59, while select was off $2.65 at $257.41. The choice/select spread narrowed to $21.18 from $21.91 with 80 loads of fabricated product and 29 loads of trimmings and grinds sold into the spot market. The USDA reported Friday that basis bids for corn from livestock feeding operations in the Southern Plains were unchanged at $1.07 to $1.15 a bushel over the Sep futures and for southwest Kansas were unchanged at $0.70 over Sep, which settled at $5.29 1/2 a bushel, down $0.07 1/4. The CME Feeder Cattle Index for the seven days ended Thursday was $152.77 per cwt up $1.22. This compares with Friday’s Aug contract settlement of $159.17 per cwt, up $1.85. IN OUR OPINION –A Reuters survey of market analysts showed they expected a US corn production estimate in today’s WASDE report of 15.115 billion bushels, compared with the USDA’s June estimate of 14.990 billion. They also expected a yield of 178.8 bushels an acre. Considering how volatile the market has been this year, today’s USDA estimates will be very important. –And more market gyrations could come from the stock market. This week kicks off quarterly earnings report time. Analysts expected the reports to show rapid recovery from the COVID-related financial crisis of a year ago. We’ll see. –Hog production in China must have caught up with the African Swine Fever culling. Pig Progress reported that there now is excess pork production there, lowering prices and causing small and medium producers to liquidate. But all may not be so rosy. The same article quotes the Global Agricultural Information Network saying the extra pork supply may be related to a resurgence of ASF, and farmers are liquidating ahead of feared forced culls.

Lester Aldrich

For the second straight week, large commodity investment funds, known as managed money, cut their collective net long live cattle futures position while hedgers raised their net communal short position.

The data came from the Commodity Futures Trading Commission’s weekly Commitments of Traders report Friday listing trading positions as of Tuesday.

 

FUNDS CUT LONG CATTLE POSITIONS

 

The new net long live cattle futures positions of managed money on Tuesday was 58,417 contracts, down 3,377, or 5.46%, from 61,794 a week earlier.  It was their smallest net long position since June 8 when it was 50,427 contracts.

The new net short position of hedgers Tuesday, those who own the cattle at some point and are known as commercial traders, was 151,776 contracts, up 1,283, or 0.85%, from 150,493 a week earlier.

The CFTC said managed money arrived at their new cattle position by liquidating 3,379 long positions, covering two short positions and putting on 1,455 spread positions.  This left them in control of 27.1% of total long open interest, 7.7% of total short open interest and 11.2% of total spread open interest.

Commercial traders got to where they were Tuesday by liquidating 79 long positions and adding 1,204 short positions, leaving with 7.1% of total long open interest and 57.5% of total short open interest.

The CME Group said total live cattle open interest Tuesday was 301,276 contracts, up 3,026, or 1.01%, from 298,250 the previous Tuesday.

The CME also said the most-active Aug live cattle futures contract had a net weekly gain Tuesday, settling at $122.40 per cwt, compared with $121.92 a week earlier.  However, it rose to a high of $123.57 on Thursday and has fallen since then.

 

FUNDS SELL MORE CORN

 

For the fifth straight week, managed money got less long Chicago corn futures, ending Tuesday with 217,410 contracts, down 21,068, or 8.83%, from 238,478 a week earlier and down 72,690, or 25.1%, from the most recent high of 290,100 on June 1.

Commercials’ new net short position Tuesday was 540,314 contracts, down 20,151, or 3.60%, from 560,465 and down 125,231, or 18.9%, from the most recent high of 666,545 on June 1.

The CFTC said managed money arrived at their new net long corn position by liquidating 6,860 long positions, adding 14,208 short positions and putting on 11,214 new spread positions.  This left them holding 17.5% of total long open interest, 3.2% of total short open interest and 11.0% of total spread open interest.

Commercials got to where they were by liquidating 2,599 long positions and covering 22,750 short positions, leaving them with 26.4% of total long open interest and 62.1% of short open interest.

 

CATTLE, BEEF RECAP

 

Fed cattle traded last week at $120 to $125 per cwt on a live basis, steady to down $1.50 from the previous week, and at $196 to $202 on a dressed basis, down $1 to $2.

The USDA choice cutout Friday was down $3.38 per cwt at $278.59, while select was off $2.65 at $257.41.  The choice/select spread narrowed to $21.18 from $21.91 with 80 loads of fabricated product and 29 loads of trimmings and grinds sold into the spot market.

The USDA reported Friday that basis bids for corn from livestock feeding operations in the Southern Plains were unchanged at $1.07 to $1.15 a bushel over the Sep futures and for southwest Kansas were unchanged at $0.70 over Sep, which settled at $5.29 1/2 a bushel, down $0.07 1/4.

The CME Feeder Cattle Index for the seven days ended Thursday was $152.77 per cwt up $1.22.  This compares with Friday’s Aug contract settlement of $159.17 per cwt, up $1.85.