Managed Money Holds Net Long Position Steady

Managed money virtually maintained its net long position in live cattle futures during the week ended Tuesday as futures prices and open interest rose.

The Commodity Futures Trading Commission Friday released its latest report on the total commitments of traders as of Tuesday.  It shows managed money, or large speculative firms, with a net long position of 92,454 contracts, compared with 92,553 during the week ended June 2, a statistically insignificant decline of 99 contracts.

The latest report also shows managed money has held their net long position nearly steady since the reporting week ended May 19 when it was 92,046 contracts.

During the latest reporting week, commercial traders, those who produce or use the cattle, increased their net short positions to 140,292 contracts from 137,328 the previous week, a change of 2,964, or 2.16%.

The CFTC reported that managed money achieved their new position by adding 2,449 long positions to their portfolios while adding 2,548 short positions and decreasing 3,238 of their spread positions.  This left their total long holding representing 35.9% of total open interest and their short positions representing 5.1%.

At the same time, commercial traders cut 351 contracts from their weekly long position while adding 2,613 short positions, leaving them representing 7.9% of total long open interest and 54.6% of total short open interest.

During the week, the most-active Aug futures contract traded sideways to higher with daily closes and highs holding within a range but daily lows slanting upward.  Both tended to form a pennant on daily bar charts going back to mid-May.  These formations build energy as the pennant narrows, and the upside breakout on Tuesday confirmed the wound-up energy.

Yet without follow-through buying, the rally attempt failed, and the market used its pent-up volatility to drop below the upward-sloping trendline that formed the bottom of the former pennant by Friday.

 

MANAGED MONEY CUTS SHORT CORN POSITION

 

During the latest reporting week, the CFTC reported that managed money cut its net short corn position to 112,254 contracts from 157,993 the previous week, a decline of 45,739, or 29.0%.

At the same time, commercial traders increased their net short positions to 135,537 contracts from 108,235 the previous week for a rise of 27,302, or 25.2%.

The CFTC said managed money arrived at their new positions by adding 2,761 long positions and covering 42,978 short positions.  They also added 7,127 spread positions.  This left them representing 15.5% of total long open interest and 23.2% of total short open interest.

During the latest week, commercial traders cut 11,284 long positions from their portfolios while adding 16,018 short positions.  This left them representing 22.7% of total long open interest and 32.0% of total short open interest.

Total corn open interest as of Tuesday was reported by the Chicago Mercantile Exchange at 1.755 million contracts, up 296,030, or 20.3%, from 1.459 million the previous week.

During the week, the nearby and most active Jul corn contract peaked at $3.68 ½ a bushel, ending a 10-day rally from the June 1 low of $3.48 ¼.  The market now appears to be in a range from $3.48 to $3.69.

 

CASH FED CATTLE MARKETS STEADY-$2 LOWER

 

Cash cattle markets last week were steady to $3 lower at $152 to mostly $155 per cwt on a live basis and at $243 to $245 on a dressed basis.

Beef prices Friday continued to fade, with the USDA choice cutout at $245.72 per cwt, down $1.47, and the select cutout at $240.42, off $0.24.  Volume was very heavy with 197 fabricated loads sold into the spot market.

The CME Feeder Cattle Index for the seven days ended Thursday was $226.40 per cwt, up $0.66.