Funds Liquidate Long Cattle Positions

Large commodity investment firms, known as managed money, divested themselves of long live cattle positions during the week ended Tuesday, taking their collective net long position Tuesday to its lowest point in three months.

At the same time, those who own the cattle at some point and theoretically could make or take delivery of a futures contract, known as commercial traders, took their collective net short position to its lowest point in three months.

The data came from the Commodity Futures Trading Commission’s weekly Commitments of Traders report Friday, which chronicles the net positions of various trader types as of the previous Tuesday.




For the third straight week, managed money got less long in their collective net position, going to 50,655 contracts Tuesday, down 16,164, or 24.2%, from 66,819 a week earlier.  It was their smallest net long position since Jan. 26 when it was 143,853 contracts.

Also, as of Tuesday, commercial traders’ new net short position stood at 144,481 contracts, down 8,609, or 5.62%, from 153,090 a week earlier.  It was their smallest net short position since Jan. 26 when it was 143,853 contracts.

The CFTC said managed money arrived at their new cattle position by liquidating 7,390 long positions, adding 8,774 short positions and putting on 789 spread positions.  This left them in control of 26.0% of total long open interest, 10.5% of total short open interest and 12.1% of total spread open interest.

Commercial traders got to where they were Tuesday by adding 1,265 long positions and covering 7,344 short positions, leaving them overseeing 9.0% of total long open interest and 53.3% of total short open interest.

The CME Group said total live cattle open interest Tuesday was 325,889 contracts, up 841, or 0.26%, from 325,048 a week earlier.

The CME also said the most-active Jun contract declined during the week ended Tuesday, settling at $115.85 per cwt, down from $119.20 a week earlier.




Meanwhile, managed money also cut their collective net long Chicago corn futures position during the week ended Tuesday to 362,238 contracts, down 17,845, or 4.70%, from 380,083 a week earlier.

Commercials trimmed their collective net short corn position to 754,309 contracts, down 51, or 0.01%, from 754,360 a week earlier.

Managed money arrived at their new net long corn position by liquidating 17,169 long positions, adding 676 short positions and unwinding 1,815 spread positions.

Commercials liquidated 34,907 long positions and covered 34,958 shorts.




Fed cattle traded last week at $118 to $120 per cwt on a live basis, down $1 to $4 from the previous week.  Dressed-basis trading was at $191 per cwt, down $1 to $4.

The USDA choice cutout Friday was up $2.74 per cwt at $296.50, while select was up $3.26 at $283.05.  The choice/select spread narrowed to $13.45 from $13.97 with 57 loads of fabricated product and 20 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 $1.04 to $1.18 a bushel over the May CBOT futures contract, which settled at $7.40 a bushel, up $0.38.

There were no delivery intentions tenderd against the Apr live cattle futures contract Friday.  Five heifer and 14 steer contracts were retendered at one, and four heifer and 2 steer contracts were retendered at two.  None were demanded or reclaimed.

The CME Feeder Cattle Index for the seven days ended Thursday was $134.13 per cwt down $0.94.  This compares with Friday’s May contract settlement of $133.60 per cwt, down $2.25.