After taking their net long live cattle position to the highest level in more than six months, large commodity funds in the week ended Tuesday cut their position by 3,314 contracts, or 14.4%, to 19,745 from 23,059.
The Commodity Futures Trading Commission’s weekly Commitments Of Traders report Friday also said commercial traders, those who theoretically could make or take delivery of a live cattle futures contract, increased their net short position slightly. These traders’ new net short live cattle position was 34,583 contracts, compared with 34,453 the previous week.
Taken together, the new trading positions of the two largest classes of traders shows a belief in the overall bearish tone of the live cattle market.
The CME Group reported total open interest during the period rose only 207 contracts, or 0,08%, to 275,416 from 275,209 the previous week.
The CFTC reported that managed money, a proxy for those large commodity funds, came to their new net long live cattle position by liquidating 721 long positions and adding 2,593 short positions while boosting their spread trades by 1,564. This left them representing 18.5% of total long open interest and 11.4% of total short open interest.
Commercials got to their new positions by liquidating 1,656 long positions and covering 1,526 short positions, leaving them in control of 24.8% of total long open interest and 37.3% of total short open interest.
During the latest CFTC reporting week, the most-active Apr live cattle contract fell $2.30 per cwt, or 1.75%, to close at $129.30 from the previous Tuesday’s close of $131.60. However, along the way, it set what was then a low for the move of $127.55 on Friday, Jan 15. The contract has since set another new swing low of $127.25 before two days of sharp gains.
MANAGED MONEY COVERS SHORT CORN POSITIONS
During the same reporting week, managed money reversed their four-week pattern of shorter and shorter net corn positions, covering 32,185 contracts, or 16.5%, of their positions. This took them to a net short position of 163,153 contracts from 195,338.
Commercial traders also changed course and went from four weeks of short covering to a week of extending their net short positions. Their new net short corn position was 167,018 contracts, up 4,711, or 2.90%, from 162,307 the previous week.
Total open interest for the week rose to 1.394 million contracts from 1.369 million, a gain of 24,617, or 1.80%, the CME Group said.
The CFTC reported that managed money arrived at their new net short corn position by liquidating 970 long positions and covering 33,155 short positions while adding 22,422 spread positions. This left them representing 10.8% of total long open interest and 22.5% of total short open interest.
Commercial traders got to their new position by adding 2,155 long positions and 6,866 new short positions, leaving them in control of 24.9% of total long open interest and 36.9% of total short open interest.
During the latest CFTC reporting week, the most-active Mar contract rose $0.11 a bushel to $3.67 ¾ from $3.56 ¾, a gain of 3.09%. The contract has since put in a new cycle high of $3.72 on Thursday, Jan. 21, where it appears to be consolidating.
CASH CATTLE QUIET
Cash cattle markets Thursday were quiet as futures shot limit up. Scattered bids of $202 per cwt were reported in Nebraska’s dressed-basis market, and at $128 in live-basis markets. However, offers ranged from $208 to $212 dressed and $134 to $135 live.
Cattle trading last week ranged from $132 to mostly $133 to $134 per cwt on a live basis, up $1 from the previous week. On a dressed basis, cattle traded at $209 to $212, down $1 to $2.
The USDA reported lower wholesale beef prices Thursday, with choice down $2.28 per cwt from Wednesday at $227.28, and select off $1.06 at $223.08. The choice/select spread narrowed to $4.59 from $5.81, and there were 97 loads of fabricated product sold into the spot market.
The CME Feeder Cattle Index for the seven days ended Thursday was $157.51 per cwt, down $0.45. This compares with the Jan settlement Friday of $159.42, up $0.75.