Funds’ Cattle Position Slides Toward Zero

Large commodity investment funds, known as managed money in the trade, continued to close in on a net-zero position in live cattle futures during the week ended Tuesday, according to data released by the Commodity Futures Trading Commission on Friday.

The CFTC’s weekly Commitments of Traders report said that, as of Tuesday, managed money’s net long live cattle position had declined for the seventh straight week and hovered at its lowest point since July 17, 2018, when it was 33,956 contracts.

Managed money’s new net long cattle position Tuesday was marked at 40,335 contracts, down 5,038, or 11.1%, from 45,373 the previous Tuesday and down 114,848, or 74.0%, from the latest high of 155,183 on April 23.

The CFTC also revealed that commercial traders, those who own the cattle at some point and primarily are hedgers, had a new long-time low in their net short cattle position as of Tuesday.  Their new net short position stood at 140,113 contracts, down 13,027, or 8.51%, from 153,140 the week before.  It also was their seventh straight decline in their net position since peaking at 226,677 contracts on April 23, a drop of 86,564, or 38.2%.

The CFTC said that to get to their new cattle position, managed money liquidated 2,517 long positions, added 2,521 short positions and unwound 1,188 spread positions.  This left their net position representing 20.5% of total long open interest, 9.3% of total short open interest and 18.3% of total spread open interest.

At the same time, commercial traders added 5,363 new long positions and covered 7,664 short positions to leave their net short position representing 11.4% of total long open interest and 50.3% of total short open interest.

The CME Group said total live cattle open interest as of Tuesday was 360,208 contracts, down from 373,348 a week before, a decline of 13,140, or 3.52%.

CME Group data showed that the most-active Aug live cattle contract rose during the week ended Tuesday to close at $106.82 per cwt, up from $104.05.




The CFTC data also showed that managed money took an even longer net position in Chicago corn futures during the week ended Tuesday.  Their new collective net long corn position at that time was 121,742 contracts, up 26,480, or 27.8%, from 95,262 a week before and their largest net long position since Dec. 18 when it was long by 124,427 contracts.

At the same time, commercial traders extended their net short corn position to 389,206 contracts from 373,761, a gain of 15,445, or 4.13%.

The CFTC said managed money added 4,518 long positions, covered 21,962 short positions and put on 1,540 spread positions, leaving them with 14.1% of long, 7.3% of short and 12.5% of spread open interest.

Commercials liquidated 3,992 long positions and added 11,453 short positions, leaving them with 28.7% of long and 50.4% of short open interest.




Cash cattle trading took place in the Plains last week at $112 to $114 per cwt on a live basis, steady with the previous week’s action, and at $184 to $186 dressed, steady to up $2.

The USDA choice cutout Friday was up $0.13 per cwt at $222.23, while select was down $1.95 at $202.76.  The choice/select spread widened to $19.47 from $17.39 with 91 loads of fabricated product sold into the spot market.

No contract delivery notices were served for the Jun live cattle futures contract on Friday.

The CME Feeder Cattle index for the seven days ended Thursday was $134.25 per cwt, up $0.89 from the previous day.  This compares with Friday’s Aug contract settlement of $135.52, down $0.70.