Managed money trimmed its net long position in live cattle futures during the week ended Tuesday, despite the beginnings of a steep rally last week.
The Commodity Futures Trading Commission’s weekly Commitments–Of-Traders report Monday for the week ended Dec. 22 showed managed money, a term for large speculative firms, trimmed its net long position by 2,839 contracts, or 18.4%, to 12,571 from 15,410 the previous week.
At the same time, commercial traders, those who theoretically could make or take delivery of a futures contract, pared their net short position 2,719 contracts, or 8.07%, to 30,989 from 33,708 the previous week.
Total live cattle open interest during the week, rose 1,963 contracts, or 0.79%, to 250,921 from 248,958, the CME Group said.
The CFTC said managed money arrived at its new position by liquidating 4,330 long positions and covering 1,491 shorts while spreading 2,038. This left them representing 21.2% of total long open interest and 16.1% of total short open interest.
Commercials, arrived at their new net short position by buying 3,860 new long positions and adding 1,141 new short positions. This left them in control of 24.0% of total long open interest and 36.4% of total short open interest.
During the week, the most-active Feb futures contract put in a new contract low, traded higher and then jumped to leave a wide gap on daily bar charts. Beginning with a close of $120.30 per cwt on Dec. 15, the contract fell to its new low of $116.97 on Friday, only to rocket to the Dec. 22 settlement of $125.60.
MANAGED MONEY ADDS TO NET SHORT CORN POSITION
Meanwhile, managed money added to its net short corn position, taking them to the shortest in four weeks. As of Tuesday, these funds were net short 84,818 contracts, up 41,876, or 97.5%, from 42,942 the week before.
At the same time, commercial traders cut their net short positions by 30,697 contracts, or 10.2%, to 271,238 contracts from 301,935 the previous week to their lowest net short position in four weeks.
Total open interest during the latest CFTC week was 1.285 million contracts, up 20,778, or 1.64%, from 1.264 million the previous week.
The CFTC said managed money arrived at its new net short position by liquidating 11,375 long positions and adding 30,501 short positions and 2,210 spread positions. This left them in control of 12.1% of total long open interest and 18.7% of total short open interest.
Commercial traders got to where they were by adding 21,293 new long positions and covering 9,404 short positions, leaving them representing 23.3% of total long open interest and 44.5% of total short open interest.
During the latest CFTC week, the most-active Mar corn contract had just rounded out its latest cycle high at $3.79 ¾ per bushel on Monday, Dec. 14, following with Tuesday’s high of $3.79 ½. On Tuesday, Dec. 22, the contract dropped sharply to close at $3.66 ¼.
CASH CATTLE TRADE QUIET
Cash cattle trading was quiet Monday after trading last week at $122 to mostly $124 per cwt on a live basis, up $4 to $6 from the previous week. Trading was light to moderate as sellers were asking $125 to $126. In dressed markets, cattle traded at $199 to mostly $200, compared with the previous week’s range of $182 to $184.
Some think product values are in the process of bottoming after two weeks of sharply reduced production. There are ideas of increased beef features in January, which could support the cutout. However, large volumes of trimmings, chucks and rounds in cold storage could provide ample inventory for such features.
The USDA reported sharply higher wholesale beef prices Monday, but the volume was very low. Choice was up $3.46 per cwt from Thursday to $201.09, and select was up $3.73 at $193.20. The choice/select spread narrowed to $7.89 from $8.16 on Thursday, but there were only 64 loads of fabricated product sold into the spot market.
The CME Feeder Cattle Index for the seven days ended Friday was $157.19 per cwt, up $3.62. This compares with the Jan settlement Monday of $162.65, down $0.82.