Funds, Commercials Sell Cattle

Managed money and commercial traders sold live cattle futures positions in the week ended Tuesday, a move that signals a more bearish attitude among traders.

In its weekly Commitments of Traders report Friday, the Commodity Futures Trading Commission said that as of Tuesday, managed money, or large commodity funds, had a net long live cattle position of 28,042 contracts, down 1,597, or 5.39%, from 29,639 the previous week.  This broke a two-week gain from their most recent low of 20,081 the week ended Sep. 13.

At the same time, commercial traders, those who actually own or handle the cattle, extended their net short position to 65,615 contracts from 63,587 the previous week, a gain of 2,028, or 3.19%.  This was the third straight week of increasing net short positions for these traders and is the largest since 75,958 the week ended Aug. 23.

The CFTC said managed money arrived at its new position by liquidating 2,565 long positions and covering 968 short positions while unwinding 394 spreads.  This left them representing 29.6% of total long open interest and 19.0% of total short open interest.

Commercial traders got to where they were by liquidating 952 long positions and adding 1,076 shorts, leaving them in control of 13.5% of total long open interest and 38.2% of total short open interest.

Total live cattle open interest for the week declined 1,701 contracts, or 0.64%, to 264,926 contracts from 266,627, according to CME Group data.

The most-active Dec futures contract set a new contract low during the latest CFTC reporting week at $100.20 per cwt on Monday before rebounding to close the reporting week at $102.67 on Tuesday.  For the week, the contract fell $0.45, or 0.44%, from $103.12.

 

CORN TRADRERS SWAP NET SHORT POSITIONS AGAIN

 

Large CME Group corn traders swapped net short positions in the week ended Tuesday for the fourth straight week, the CFTC said.  In the latest week, managed money had a net short corn position of 153,096 contracts, down from 177,733 the previous week, the CFTC said.  This is a decline of 24,637, or 13.9%.

At the same time, commercial traders increased their net short position by 39,414 contracts, or 27.3%, to 183,720 contracts from 144,306 the previous week, the CFTC said.

Managed money arrived at its new position by adding 10,855 long positions and covering 13,782 shorts while unwinding 2,070 spread positions, CFTC data showed.  This left them representing 14.0% of total long open interest and 25.7% of total short open interest.

Commercial traders arrived at their new position by liquidating 21,903 long positions and adding 17,511 short positions to leave them in control of 24.6% of total long open interest and 38.6% of total short open interest.

Total corn open interest for the week rose to 1.312 million contracts from 1.308 million, the CME Group said.  This was a gain of 4,203, or 0.32%.

During the latest CFTC week, the most-active Dec contract rose to $3.48 1/4 a bushel from $3.29 ¼ but then failed at a rally attempt.

 

CASH CATTLE MARKETS TRADE LOWER

 

Cash cattle markets last week traded at mostly $102 per cwt on a live basis and $158 to $160 dressed, compared with $103 to mostly $104 last week.

The USDA’s choice cutout Friday was $0.41 per cwt lower at $183.07, while select was off $0.55 at $174.51.  The choice/select spread widened to $8.56 from $8.42 with 130 loads of fabricated product sold into the spot market.

The CME Feeder Cattle Index for the seven days ended Thursday was $129.82 per cwt, down $0.77.  This compares with the Oct settlement Friday of $127.62, down $0.20.