For all practical purposes, managed money held its net live cattle position steady during the week ended Tuesday. Producers covered some short positions but also held within a sideways range.
All that was done as futures prices put in their latest contract highs and then hovered, waiting for some outside influence to move them along. Total live cattle open interest declined during the week, falling 6,420 contracts, or 2.02%, to 311,090 positions from 317,510 the previous week.
The Commodity Futures Trading Commission’s weekly Commitments of Traders report for the week ended Tuesday put managed money’s position as a net long 110,152 contracts, down 793, or 0.71%, from 110,945 the previous week. The net positions of managed money traders have held in a sideways chart pattern since mid-September.
Producers were short by 148,848 contracts during the latest reporting week, 1,540, or 10.2%, fewer than the 150,388 of the previous week. However, this kept their relative positions since late August more or less on a straight line.
In the short term, market analysts say cattle markets could be in for a little struggle as traders roll out of the Oct position and into other delivery months. Short-run moving averages also are making bearish crosses with longer-term averages, implying that the market is trying to take some long-side profits.
World events, like the rise of Ebola and ISIL, along with questions about worldwide economic stability have some traders nervous about market direction and ready to cash in.
Longer-term, many see continued tight supplies overriding those types of concerns. They see prices hitting new highs next year as a cattle herd in the early phases of rebuilding sucks heifers away from the feedlots for breeding.
INVESTORS EXPAND CORN POSITIONS
During the latest reporting week, managed money raised its net long position in corn futures to 84,165 contracts from 58,274 the previous week, a 44.4% increase from the previous week. This puts then at the highest net long position since the week ended Sep. 16 when it was 87,607 contracts.
At the same time, producers, believing this year’s harvest will be overwhelming, continued to expand their short positions. The CFTC report showed producers were net short by 261,347 contracts, an increase of 7,116, or 2.80%, from 254,231 the previous week.
Producers’ net short position is the largest since the week ended June 24 when it was 269,434 contracts. At that time, producers were covering short positions as prices fell in an attempt to limit losses.
During the latest reporting week, the futures market was fluctuating, with Dec going from a nearby low of $3.30 ½ to a high of $3.53 and back near the middle of the range in just three days.
At the same time, total corn open interest declined 20,000 contracts, or 1.54%, to 1.278 million from 1.298 million.
CASH CATTLE TRADE SIDEWAYS
If cattle traders were looking for direction from the cash cattle market last week, they may have been disappointed. Cash cattle traded at $163 to mostly $164 per cwt on a live basis, about steady to instances $1.00 lower from the previous week. Volume was thought to be higher, however.
Slaughter for the week was estimated at 548,000 head, down 2,000 head, or 0.36%, from 550,000 the previous week and 47,000, or 7.91%, from 594,000 in the year-ago week.
Boxed-beef prices Friday were narrowly mixed with choice up $0.24 per cwt at $249.16 and select down $0.14 at $234.78. The choice/select spread widened to $14.38, but there were only 76 loads of fabricated product sold into the spot market.