The largest players in live cattle futures moved their net positions toward the short side of the market during the week ended Tuesday, even though the Dec contract was making a two-month cycle high.
The Commodity Futures Trading Commission’s weekly Commitments of Traders report said managed money, or large speculative firms, and commercial traders, those theoretically able to make or take delivery of a futures contract, moved toward the short side of the market during the latest reporting week.
Managed money cut their long positions by 4,012 contracts, or 43.5%, to 5,207 from 9,219 in the previous week, the CFTC reported. The lowest net long position these traders have had came during the week ended Oct 13 when they were net long just 1,209 contracts.
At the same time, commercial traders increased their net short positions by 3,555 contracts, or 13.6%, to 29,609 contracts from 26,054 the previous week. This is their shortest position since the week ended Oct. 12 when it was a net 34,784 contracts short.
To arrive at their new net long position, managed money added 551 long futures positions and 4,563 short positions while advancing their spread positions by 5,274, the CFTC said. This left them in control of 18.9% of total long open interest and 16.9% of total short open interest.
During the latest reporting week, commercial traders, liquidated 2,407 long positions while adding 1,148 short positions. This left them representing 23.2% of total long open interest and 34.3% of total short open interest.
Total open interest during the period rose to 266,660 contracts from 257,044, a gain of 9,616 contracts, or 3.74%.
During the latest CFTC week, the most-active Dec live cattle futures contract went from a low of $136.55 per cwt on Tuesday, Oct. 27, to a two-month cycle high of $142.85 on Friday, Oct. 30. At that point, the market turned bearish and fell away, closing the gap on daily charts that was left on Monday, Oct. 19, at $135.95.
LARGE TRADERS GET SHORTER CORN
Meanwhile, managed money and commercials also moved toward the short side of the market in corn futures, the CFTC reported.
Managed money cut their net long position by 9,155 contracts, or 31.6%, to 19,860 contracts from 29,015 the previous week. This is the lowest position these traders have held since the week ended June 23, when they were net short by 122,968.
During the latest reporting week, commercial traders extended their net short position by 2,945 contracts, or 0.95%, to 312,381 from 309,436 the previous week.
To arrive at their new net long position, managed money liquidated a net 9,356 long contracts and covered 201 short positions while adding 10,027 spread positions. This left them in control of 15.4% of total long open interest and 13.9% of total short open interest.
At the same time, commercial traders bought 10,291 new long positions while selling 13,236 short positions, leaving them in control of 23.3% of total long open interest and 46.4% of total short open interest.
Total open interest during the week expanded 27,257 contracts, or 2.06%, to 1.351 million from 1.324 million as the most-active Dec contract moved in a sideways pattern ranging from a high of $3.87 ½ a bushel on Tuesday Oct. 27 to a low of $3.75 ½ on Thursday, Oct. 29.
CASH FED CATTLE MARKETS LOWER
Plains cash cattle markets traded in a wide range last week but did so lightly. On a live basis, trade ranged mostly $133 to $135 per cwt, while on a dressed basis, prices were mostly $204 to $206.
In the Corn Belt, cattle traded at $130 to mostly $131 live and $205 to $208 dressed.
Wholesale beef prices Friday were lower, with the USDA choice cutout value at $215.66 per cwt, down $3.20 on the day, and its select cutout at $207.25, off $1.40.
The choice/select spread narrowed to $8.41 from $10.21 on Thursday, and there were 77 loads of fabricated product sold into the spot market.
The CME Feeder Cattle Index for the seven days ended Thursday was $190.27 per cwt, down $1.53. This compares with the Nov settlement Friday of $181.62, unchanged.