Large commodity investment funds, known as managed money, ended a 10-week slide in their collective net long holdings in live cattle futures in the week ended Tuesday.
However, it’s not clear whether this will be the extent of their long liquidation as cattle futures prices have made a decisive turn upward, an analyst said.
Managed money’s new cattle position was revealed by the Commodity Futures Trading Commission Friday in its weekly Commitments of Traders report.
Managed money’s new net long live cattle position Tuesday was 20,961 contracts, up 50, or 0.24%, from 20,911 a week before.
Commercial traders, those who own the cattle and primarily are hedgers, reduced their collective net short position for the 11th straight week in the week ended Tuesday, coming in with a net short position of 120,915 contracts, down 4,915, or 3.91%, from 125,830 a week earlier. It was their lowest net short position since July 9, 2018, when it was short by 117,483 contracts.
The CFTC said managed money arrived at their new net long cattle position by liquidating 869 long positions, covering 919 short positions and unwinding 3,979 spread positions. This left them holding 18.6% of total long open interest, 12.4% of total short open interest and 18.8% of total spread open interest.
Commercials got to their new position by liquidating 667 long positions and covering 5,582 short positions, leaving them with 11.8% of total long open interest and 47.7% of total short open interest.
The CME Group said Tuesday that live cattle open interest totaled 336,501 contracts, down 13,118, or 3.75%, from 349,619 a week before.
CME data also show that the most-active Oct live cattle contract rose in the CFTC week to settle Tuesday at $109.30 per cwt, up from $105.36.
FUNDS INCH LONG CORN POSITION HIGHER
As of Tuesday, managed money had raised their net long Chicago corn futures position higher to 174,318 contracts, compared with 169,425 a week earlier, a gain of 4,893, or 2.89%.
Meanwhile, commercials extended their net short position by 17,368 contracts, or 3.50%, to 513,012 contracts from 495,644 to their largest net short position in more than a year.
The CFTC said managed money attained its new position by adding 2,642 long positions, covering 2,251 short positions and putting on 6,941 spread positions. This left them with 15.7% of total long open interest, 5.9% of total short open interest and 13.6% of total spread open interest.
Commercials got to their new position by liquidating 324 long positions and adding 17,044 short positions, leaving them with 26.5% of total long open interest and 55.4% of total short open interest.
CATTLE, BEEF RECAP
Cash cattle traded in the Plains last week at mostly $111 to $112 per cwt on a live basis with some in Nebraska at $114 to $115. Dressed-basis trading was reported at mostly $182 to $183 per cwt with some early up to $185.
The USDA choice cutout Friday was down $0.97 per cwt at $212.80, while select was off $1.19 at $189.60. The choice/select spread widened to $23.20 from $22.98 with 72 loads of fabricated product sold into the spot market.
The CME Feeder Cattle index for the seven days ended Thursday was $141.08 per cwt, up $1.49 from the previous day. This compares with Friday’s Aug contract settlement of $141.60, down $1.02.
The average purchase price of corn in the Southern Plains last week was $4.84 a bushel, said the Livestock Marketing Information Center. This compares with The Sep futures contract settlement Friday of $4.54 ¼ a bushel, for a basis of a positive $0.29 ¾ and the average Dodge City, Kan., what price of $4.14.