Commercials Hold Shortest Cattle Position Since August

Commercial traders of live cattle futures established their largest net short position since mid-August during the week ended Tuesday, a position and trend not mirrored by other traders.

The Commodity Futures Trading Commission’s weekly Commitments of Traders report Friday, said the net short position of commercials, those who handle the cattle at some point, had a net short position of 60,462 contracts.  This was up 8,693, or 16.8%, from 51,769 the previous week and was the largest since the week ended Aug. 19 when it was 64,199 contracts.

However, while commercials were busy lengthening their net short positions, all other classes of traders either reduced their net short positions or boosted their net long positions.  Small speculators got less short while managed money and swap dealers upped their net long positions.

Managed money, or large speculative firms, increased their net long position by 6,332 contracts, or 39.9%, to 22,197 from 15,865 the previous week.  This compares with the week ended Jan. 12 when it was 23,059 contracts, which was a high going back to the week ended July 28 when it was 27,843.

The CFTC said commercial traders reached their new position by liquidating 2,148 long positions and adding 6,545 short positions.  This left them representing 19.2% of total long open interest and 40.8% of total short open interest.

Managed money arrived at its new position by adding 4,123 new long positions and covering 2,209 short positions while unwinding 1,242 spreads.  This left them in control of 19.6% of total long open interest and 11.7% of total short open interest.

The CME Group reported total cattle open interest for the week rose to 280,834 contracts from 270,921, a gain of 9,913, or 3.66%.

During the latest reporting week, the most-active Apr contract rose to set a swing high of $139.05 per cwt on Feb. 26 before sliding again.  The high eclipsed three previous peaks near $129.00.




The two most-watched corn trading categories, managed money and commercials, swapped net short positions during the latest reporting week with managed money gaining a larger net short position than commercials.

Managed money’s new net short position was 206,252 contracts, up 68,252, or 49.5%, from 138,000 the previous week.  This is their largest net short position in more than a year.

Commercials, meanwhile, reduced their net short position by 43,668 contracts, or 24.0%, to 138,407 contracts from 182,075 the previous week.  This is the smallest net short position they have had since the week ended June 16 when it was 108,564 contracts.

Managed money arrived at its new position by liquidating 13,796 long positions and adding 54,456 short positions while unwinding 9,209 spreads.  This left them representing 10.9% of total long open interest and 26.4% of total short open interest.

Commercials got to their new positions by liquidating 3,464 long positions and covering 46,132 short positions, leaving them in control of 25.0% of total long open interest and 35.5% of total short open interest.

The CME Group said total open interest for the week fell to 1.326 million contracts from 1.357 million, a dip of 33,342, or 2.45%.




Cash cattle markets last week were steady with trade at $136 to $137 per cwt on a live basis, and at $212 to $214 dressed.

The USDA reported its choice cutout price up $1.22 per cwt at $220.97, and select up $0.35 at $211.99.  The choice/select spread widened to $8.98 from $8.11, and there were 94 loads of fabricated product sold into the spot market.

The CME Feeder Cattle Index for the seven days ended Thursday was $158.82 per cwt, up $0.03.  This compares with Mar’s Friday settlement of $158.50, up $0.90.