Funds Further Advance Long Cattle Position

Large investment funds, called managed money, further advanced their net long position in live cattle futures during the week ended Tuesday to its largest point since the week ended July 18.

The announcement came Friday from the Commodity Futures Trading Commission in its weekly Commitments of Traders report.

The CFTC said managed money’s new live cattle position was net long by 108,617 contracts, up 9,149, or 9.20%, from 99,468 the previous week and 2,118, or 1.91%, shy of the July 18 level of 110,735.

By contrast, commercial traders, those who own the cattle at some point, extended their net short position to 189,140 contracts, up 5,649, or 3.08%, from 183,491 the previous week and the highest since the July 25 level of 191,302.

The CFTC said managed money arrived at its new cattle position by adding 6,948 long positions, liquidating 2,201 short positions and unwinding 274 spreads.  This left them representing 34.8% of total long open interest, 2.5% of short open interest and 6.6% of total spread open interest.

Commercial traders got to their new short cattle position by liquidating 1,570 long positions and adding 4,079 short positions, leaving them in control of 7.3% of total long open interest and 63.6% of total short open interest.

The CME Group said total live cattle open interest rose 63,535 contracts, or 4.28%, during the week to 1.548 million contracts from 1.484 million.

CME data show that the most-active Dec contract moved unevenly lower during the CFTC week, only to turn higher on Monday and continue the gains on Tuesday.  The contract ended at $119.52 per cwt, up from $115.97 the previous week.




Meanwhile, managed money extended its net short corn position to its largest point since the week ended May 30.  The new position was net short by 155,307 contracts, up 668, or 0.43%, from 154,639 the previous week but short of the May 30 total of 198,114.

Commercial traders cut their net short corn position by 10,059 contracts, or 5.89%, to 160,738 from 170,797 the previous week, the lowest since the week ended May 30 when it was 109,999.

Managed money arrived at its new position by adding 1,531 long positions, 2,199 short positions and 3,156 spreads, leaving them with 13.9% of total long open interest, 23.9% of total short open interest and 7.9% of total spread open interest.




No fed cattle sales were reported from the Livestock Exchange video auction Wednesday.  The previous week, light sales were reported at $109 per cwt on a live basis.

Cash cattle trading waited until late in the day on Friday after the USDA’s Quality Assessment Division, in charge of animal grading, Thursday night to fix an apparent faulty adjustment that had been made to some of the camera systems earlier in the year, Urner Barry reported.  The earlier changes had been linked to a spike in the percentage of choice and prime carcasses since summer.

Late Friday, cash trading took place at $116 to $119 with some at $119.50 per cwt on a live basis and $182 to $186 dressed.  Cattle traded last week at $110 to $112 live and $174 to $175 dressed.

The USDA’s choice cutout Friday was up $0.93 per cwt at $203.30, while select was up $0.57 at $192.48.  The choice/select spread widened to $10.82 from $10.46 with 59 loads of fabricated product sold into the spot market.

The CME Feeder Cattle index for the seven days ended Thursday was $155.12 per cwt, up $0.72.  This compares with Friday’s Nov settlement of $156.47, down $0.70.