Large commodity index funds increased their collective net short live cattle position during the week ended last Tuesday, while hedgers cut their net short position.
It’s very possible that those large commodity index funds, called managed money, continued to sell cattle short in the week since last Tuesday when the Commodity Futures Trading Commission cut off counting for its weekly Commitments of Traders report, Friday, a market analyst said.
Managed money’s new net short position last Tuesday was short by 2,858 contracts, up 1,013, or 54.9%, from being short by 1,845 contracts the week before. Managed money hasn’t held a position this short since Sep. 24 when it was short by 9,189 contracts.
Meanwhile, those hedgers, called commercials in the trade, cut their collective net short cattle position to 91,427 contracts from 103,220 the week before, a decline of 11,793, or 11.4%. This was their smallest net short position since Sep. 24 when it was short by 91,076 contracts.
The CFTC said managed money arrived at their new cattle position by adding 1,530 long positions, 2,543 short positions and unwinding 5,958 spread positions. This left their position representing 17.4% of total long open interest, 18.3% of total short open interest and 16.8% of total spread open interest.
Commercials got to their new position by adding 5,324 long positions and covering 6,469 short positions, leaving them in charge of 15.8% of total long open interest and 43.2% of total short open interest.
The CME Group said total live cattle open interest last Tuesday was 333,431 contracts, down 15,524, or 4.45%, from 348,955 the week before.
CME data also showed that the most-active Jun futures contract fell during the CFTC reporting week, settling last Tuesday at $99.25 per cwt, down $4.12, or 3.99%, from $103.37 the previous Tuesday. The contract since has continued to fall.
Funds Buy More Corn
During the same week, managed money continued to buy corn, reducing their overall net short Chicago futures position by 24,831 contracts, or 32.2%, to 52,348 contracts from 77,179 the week before.
Commercials, though, sold corn, increasing their net short futures position to 253,173 contracts from 238,212 the week before, a gain of 14,961, or 6.28%.
The CFTC said managed money arrived at its new corn position by liquidating 6,471 long positions, covering 31,302 short positions and unwinding 414 spread positions. This left them in control of 13.5% of total long open interest, 17.1% of total short open interest and 16.7% of total spread open interest.
Commercials got to where they were last Tuesday by liquidating 7,672 long positions and adding 7,289 short positions, leaving them in charge of 25.2% of total long open interest and 42.4% of total short open interest.
The CME Group said total corn open interest last Tuesday was 1.476 million contracts, down from 1.501 million the week before. This was down by 25,034 contracts, or 1.67%.
Corn futures prices also declined in the CFTC reporting week.
CATTLE, BEEF RECAP
A few cast cattle traded in the Plains this week at $105 per cwt on a live basis, down $3 to $5 from last week. Dressed-basis trade last week was at $175 to $176, down $5 to $6.
The USDA choice cutout Monday was up $16.22 per cwt at $224.36, while select was up $14.73 at $216.71. The choice/select spread widened to $7.65 from $6.16 with 228 loads of fabricated product sold into the spot market.
The CME Feeder Cattle index for the seven days ended Friday was $124.67 per cwt, down $3.24 from the previous day. This compares with Monday’s Mar contract settlement of $108.50, down $4.50.