Funds Sell Cattle Futures, Buy Corn

Large commodity investment funds, called managed money, cut their collective net long live cattle futures position in the week ended Tuesday, Sep. 1, according to data from the Commodity Futures Trading Commission Friday.

The data came from the CFTC’s weekly Commitments of Traders report and said managed money’s new net long cattle position Sep. 1 totaled 56,308 contracts, down 4,238, or 7.00%, from 60,546 a week earlier.  It was the first week of a pullback after six straight weeks of net-long position gains.

CFTC data also showed that commercial traders, those who own the cattle and approach the futures market primarily as hedgers, trimmed their collective net short live cattle futures position during the week ended Sep. 1 to 137,008 contracts, down 3,010, or 2.15%, from 140,018 a week before.  It was the first decline in their total net short position in seven weeks.

The CFTC said managed money arrived at their new cattle position by liquidating 359 long positions, adding 3,879 short positions and unwinding 2,678 spread positions.  This left their net long cattle position representing 26.2% of total long open interest, 7.2% of total short open interest and 11.7% of total spread open interest.

Commercials reached their new net short cattle position by liquidating 691 long positions and covering 3,701 short positions, leaving them in charge of 7.5% of total long open interest and 53.7% of total short open interest.

The CME Group said live cattle open interest on Sep. 1 was 296,247 contracts, down 1,938, or 0.65%, from 298,185 the previous Tuesday.

The CME Group also reported that the most-active Oct futures contract declined in value during the week ended Sep. 1 to settle at $105.47 per cwt, compared with $108.77 a week earlier.




During the same CFTC reporting week, managed money bought Chicago corn futures aggressively, taking what had been a net short position for more than a year into net long territory.

Managed money’s corn position on Sep. 1 was net long by a collective 8,361 contracts, compared with being net short by 71,166 contracts a week earlier.

Meanwhile, commercial traders extended their collective net short corn position to 219,280 contracts from 71,166 the previous week, a gain of 148,114, or 108.1%.  It was their third straight week of increasing their net short position and took them to a level not surpassed since March 10 when it was short by 253,173 contracts.

The CFTC said managed money arrived at their new corn position by adding 9,195 long positions, covering 70,332 short positions and putting on 16,216 new spread positions.  This left them in charge of 14.0% of total long open interest, 13.3% of total short open interest and 13.0% of total spread open interest.

Commercials reached their new Sep. 1 net short position by liquidating 45,212 long positions and adding 22,042 shorts, leaving them with 29.6% of long positions and 45.4% of shorts.




Fed cattle trading was reported in the Plains last week at $102.50 to $104 per cwt on a live basis, down $2 to $2.50 from the previous week.  Dressed-trading was done at $163 to $164 per cwt, down $3 to $4.

The USDA choice cutout Tuesday was down $1.03 per cwt at $224.82, while select was off $0.84 at $209.46.  The choice/select spread narrowed to $16.36 from $16.55 with 101 loads of fabricated product and 29 loads of trimmings and grinds sold into the spot market.

The CME Feeder Cattle Index for the seven days ended Friday was at $139.05 per cwt, down $1.15.  This compares with Tuesday’s Sep contract settlement of $138.95 per cwt, up $1.30.