Funds Break 12-Week Spree, Cut Cattle Position

Managed money, or large commodity investment funds, broke their 12-week buying spree during the week ended Tuesday and cut their net long live cattle futures position, the Commodity Futures Trading Commission said Friday.

In its weekly Commitments of Traders report, the CFTC said managed money trimmed their net long live cattle position by 5,675 contracts, or 5.40%, to 99,333 from 105,008 the previous week.

At the same time, commercial traders, those who theoretically could make or take delivery of a futures contract, extended their net short position for the 13th straight week to 160,730 contracts from 156,785 the previous week.  This was the largest net short position since the week of Aug. 5, 2014, when it was 162,960 and represents a week-to-week increase of 3,945, or 2.42%.

The CFTC said managed money arrived at its new net long live cattle position by liquidating 5,896 long positions and covering 221 shorts while unwinding 1,767 spread positions.  This left them representing 33.4% of total live cattle open interest and 4.0% of total short open interest.

Commercial traders, meanwhile, got to their new net short cattle position by liquidating 1,502 long positions and adding 2,443 short positions, leaving them in control of 8.0% of total long open interest and 55.5% of total short open interest.

The CME Group said total live cattle open interest for the CFTC reporting week was 338,722 contracts, down 11,429, or 3.26%, from 350,151 the week before.

The CME Group also said the most-active Apr cattle contract dipped to a swing low of $112.75 per cwt from the previous Tuesday’s close of $114.75 before rebounding to Tuesday’s high of $116.65 and closing at $116.50.  The contract has since fallen off to challenge the swing low with Friday’s low of $112.77.

 

FUNDS EXTEND LONG CORN POSITION

 

During the CFTC week, managed money extended their net long corn futures position by 31,089 contracts, or 643.9%, to 35,917 from 4,828 the previous week, taking them to the largest position since the week ended June 26, 2016, when it was 86,050.

At the same time, commercial traders extended their net short position by 23,267 contracts, or 6.89%, to 337,879 from 314,612, the previous week.

Managed money arrived at its new corn position by adding 24,203 long positions and covering 6,886 shorts while placing 4,682 spread positions.  This left them representing 18.4% of total long open interest and 15.9% of total short open interest.

Commercials got to their new position by liquidating 17,419 long positions while adding 5,848 short positions, leaving them in control of 20.9% of total long open interest and 45.3% of total short open interest.

Total corn open interest in the CFTC reporting week rose to 1.394 million contracts from 1.347 million, a gain of 36,629, or 2.72%, the CME Group said.

The most-active corn contract rose during the week to close at $2.68 ½ a bushel from $3.59 ¾.

 

CASH CATTLE TRADE MIXED TO HIGHER

 

Average fed cattle exchange auction prices Wednesday were $3.13 per cwt lower at $118.84, versus $121.97 a week earlier.

Cash cattle then traded at $119 to $120.50, mostly $119.75 to $120.50, on a live basis, up $0.50 to $0.75.  Dressed-basis trades took place at $190 to $190.50, steady to up $0.50 from last week’s $190.

The USDA’s choice cutout Friday was down $1.08 per cwt at $187.63, while select was off $0.17 at $185.65.  The choice/select spread narrowed to $1.98 from $2.98 with 80 loads of fabricated product sold into the spot market.

The CME Feeder Cattle Index for the seven days ended Thursday was $128.17 per cwt, up $0.06.  This compares with Friday’s Mar settlement of $122.07, down $1.55.