Funds Boost Long Cattle Position Slightly

Managed money, another term for large commodity funds, boosted their net long position slightly during the week ended Tuesday, Dec. 1, even though prices were rounding out a nearby high.

As of Tuesday, the Commodity Futures Trading Commission’s weekly Commitments Of Traders report Friday reported that managed money held a net long live cattle position of 8,356 contracts.  This was up 453, or 5.73%, from 7,903 the previous Tuesday.

The latest report showed that managed money with the largest net long position since the week ended Tuesday, Oct. 27 when it was 9,219 contracts.

Managed money has kept its net long live cattle position at a low level since early September.  In fact, all classes of live cattle traders have held their net positions relatively steady over the last three months.

Commercial traders, those who in theory could make or take delivery of a live cattle futures contract, reduced their net short position during the latest reporting week to 30,342 contracts.  This was down 1,981, or 6.13%, from 32,323 the previous week.

The CME Group reported total open interest as of Dec. 1 at 274,367 contracts, down 4,486, or 1.61%, from 278,853 the previous week.

The CME Group also reported that the most-active Feb futures contract tried to rally but ran out of gas at the end of the latest CFTC week.  Feb rose to close at $132.10 per cwt from $130.25 the previous week, but that just rounded out the top of the latest rally attempt, since prices the rest of the week fell sharply.

The CFTC said managed money arrived at their current net long position by liquidating 661 long positions and covering 1,114 short positions while unwinding 701 spread positions.  This left them representing 20.6% of total long open interest and 17.5% of total short open interest.

Commercials got to their new net short position by liquidating 2,761 long positions and covering 4,742 short positions, leaving them in control of 23.1% of total long open interest and 34.1% of total short open interest.

 

FUNDS CUTS NET SHORT CORN POSITION

 

During the latest CFTC reporting week, managed money cut its net short corn position by 24,146 contracts, or 22.4%, to 83,748 from 107,894.

At the same time, commercial traders cut 66,060 contracts, or 33.6%, from their net short positions to bring them to a net short position of 262,630 from 196,570.

Interestingly, swap dealers, speculative traders who spread options with futures for themselves or for clients, had a large net long corn position as of Tuesday at 300,029 contracts, up from 256,499 the previous week.

During the latest reporting week, the most-active Dec contract moved sideways in a wide range, closing Tuesday at $3.67 a bushel, compared with $3.64 ¼ the previous Tuesday a gain of $0.02 ¾, but the contract fell to a low of $3.58 ¾ on Nov. 27.

Total open interest for the latest week fell 8,559 contracts, or 0.65%, to 1.302 million from 1.310 million.

The CFTC said managed money arrived at its new position by adding 12,417 long positions and covering 11,729 short positions while unwinding 9,154 spread positions.  This left them representing 13.3% of total long open interest and 19.7% of total short open interest.

Commercials came to their new positions by liquidating 43,265 long positions and adding 22,795 short positions, leaving them in control of 22.6% of total long open interest and 42.8% of total short open interest.

 

CASH FED CATTLE MARKETS TRADE LOWER

 

Cash fed cattle markets last week were down about $3.00 per cwt to $123 to mostly $124 and up to $125 per cwt from the $124 to mostly $127 seen the previous week.  On a dressed basis, cattle traded at $190 to $192, down $3 to $5 from mostly $195 the week before.

Wholesale beef prices Friday were lower.  The USDA choice cutout was down $1.89 per cwt on the day at $202.60, and the select cutout was off $1.53 at $191.49.  The choice/select spread narrowed to $11.11 from $11.47 on Thursday, and there were 98 loads of fabricated product sold into the spot market.

For the week, choice beef was down $1.80 from $204.40.

The CME Feeder Cattle Index for the seven days ended Thursday was $168.40, down $2.38.  This compares with the Jan settlement Friday of $159.45, down $0.30.