Funds Take Larger Long Cattle Position

Large commodity investment funds, known as managed money, again advanced their net long live cattle futures position to another record in the week ended Tuesday, according to data from the Commodity Futures Trading Commission.

The data came in the CFTC’s weekly Commitments of Traders report Friday.  However, the rapid drop in futures prices since then may indicate some extensive long liquidation by those speculative investors.

The CFTC data for the week ended Tuesday showed managed money’s collective net long live cattle position at that time stood at 155,183 contracts, up 2,590, or 1.70%, from 152,593 the week before.

At the same time, commercial traders, those who own the cattle at some point in their lives and primarily are hedgers, advanced their collective net short position to a record 226,677 contracts, up 2,711, or 1.21%, from 223,966 the previous Tuesday.

The CFTC said managed money arrived at its new net long live cattle position by adding 1,236 long positions, covering 1,354 short positions and putting on 3,971 new spread positions.  This left their position representing 37.3% of total long open interest, 2.9% of total short open interest and 14.1% of total spread open interest.

The CFTC also said commercial traders got to where they were by liquidating 4,272 long positions and covering 1,561 short positions, leaving them holding 5.8% of total long open interest and 56.0% of total short open interest.

The CME Group said total live cattle open interest as of Tuesday stood at 451,696 contracts, up from 448,899 a week before.  This was a gain of 2,797 contracts, or 0.62%.

CME Group data also showed that the most-active Jun cattle futures contract declined during the CFTC reporting week to settle Tuesday at $121.12 per cwt, down from $122.45.  In between, it hit a cycle high of $122.77 per cwt on Wednesday and Thursday.  It has since dropped precipitously and settled Friday at $115.05.




Meanwhile, managed money continued its drive to sell corn futures, taking on its largest net short position in this commodity in more than a year.  The CFTC reported the new net short corn position for managed money totaled 344,185 contracts, up 17,298, or 5.29%, from 326,887 a week earlier.

Commercial traders, though, took on a less-short corn position during the week, ending up being short by only 15,236 contracts, down 18,167, or 54.4%, from 33,403 the previous Tuesday.

The CFTC said managed money arrived at its new net short corn position by adding 2,856 long positions, 20,154 short positions and unwinding 2,056 spread positions.  This left them in control of 10.1% of total long open interest, 28.8% of total short open interest and 12.2% of total spread open interest.

The CME Group said total corn open interest rose during the week to 1.841 million contracts from 1.811 million, a gain of 30,108, or 1.66%.




Cash cattle trading last week in the Plains was reported at $126 to $127 per cwt on a live basis, steady to down $1 from the previous week.  Dressed-basis trading was reported at $205, down $2 to $3.

The USDA choice cutout Friday was up $0.06 per cwt at $232.99, while select was off $0.34 at $219.41.  The choice/select spread widened to $13.58 from $13.18 with 73 loads of fabricated product sold into the spot market.

There were no tenders Friday for deliveries against the Apr futures contract.

The CME Feeder Cattle index for the seven days ended Thursday, was $144.24 per cwt, down $0.72.  This compares with Friday’s May contract settlement of $143.95, up $0.40.