Funds Cut Long Cattle Position

Large commodity investment funds, known as managed money, cut their net long commitment to live cattle futures during the week ended Tuesday, according to data from the Commodity Futures Trading Commission.

The CFTC’s Commitments of Traders report normally is released on Fridays but was delayed to Monday by last week’s New Year’s Day holiday.

The report said managed money’s new collective net long live cattle position as of last Tuesday stood at 79,861 contracts, down 6,597, or 7.63%, from their most recent 86,458 a week earlier.

At the same time, those who own the cattle and primarily use futures as a hedging tool, called commercial traders, cut their collective net short live cattle futures position.  Their new position as of last Tuesday, stood at 154,541 contracts, down 3,738, or 2.36%, from 158,279.  It was their second decline in their net short positions in as many weeks.

The CFTC report showed that managed money arrived at its new cattle position by liquidating 4,654 long positions, adding 1,943 short positions and unwinding 240 spread positions.  This left them representing 29.6% of total long open interest, 8.5% of total short open interest and 14.5% of total spread open interest.

Commercials got to where they were by adding 1,201 long positions and covering 2,537 short positions, leaving them in charge of 10.9% of total long open interest and 51.6% of total short open interest.

The CME Group said total live cattle open interest last Tuesday was 378,966 contracts, down 3,332, or 0.87%, from 382,298 the week before.

CME Group data also showed that the most-active Feb futures contract rose slightly over the week, settling Tuesday at $125.92, compared with $125.82 on Dec. 24.

 

FUNDS TRIM NET SHORT CORN POSITION

 

Meanwhile, managed money trimmed their collective net short position in Chicago corn futures, moving to being short by 85,115 contracts, down 1,602, or 1.85%, from 86,717 a week earlier.  It was the third straight weekly decline in their total short position.

Commercials’ new net short position last Tuesday stood at 266,437 contracts, up 6,753, or 2.60%, from 259,684 a week earlier.  It was their third straight weekly increase in their net short corn position, taking them to their largest short position since Aug. 27 when it was 271,721.

The CFTC said managed money arrived at their new corn position by adding 8,537 long positions, 6,935 short positions and 1,024 spread positions.  This left them in charge of 10.5% of total long open interest, 16.2% of total short open interest and 15.7% of total spread open interest.

Commercials got to their new position by liquidating 759 long positions and adding 5,994 short positions, leaving them with 27.1% of total long open interest and 45.2% of total short open interest.

The CME Group said total corn open interest as of Tuesday was 1.473 million contracts, up 6,789, or 0.46%, from 1.466 million a week earlier.

 

CATTLE, BEEF RECAP

 

Cash cattle trading took place last week at $124 to $125 per cwt on a live basis, up $2 to $3 from the previous week.  Dressed-basis trade happened at $198 to $200 per cwt, up $3 to $4.

The USDA choice cutout Monday was up $1.16 per cwt at $209.65, while select was up $1.41 at $206.80.  The choice/select spread narrowed to $2.85 from $3.10 with 128 loads of fabricated product sold into the spot market.

The CME Feeder Cattle index for the seven days ended Friday was $146.53 per cwt, up $1.66 from the previous day.  This compares with Monday’s Jan contract settlement of $147.42, up $4.07.