Funds Continue Selling Long Cattle Positions

Large managed investment funds continued to sell long live cattle positions in the week ended Tuesday, taking them to their lowest net long position in more than a year.

The Commodity Futures Trading Commission reported in its weekly Commitments of Traders report Friday for the week ended Tuesday that commercial traders, those who can make or take delivery of the cattle, cut their net short positions to the lowest point in more than a year.

The CFTC said managed funds had a net long live cattle position of 39,085 contracts, down 14,746, or 27.4%, from 53,831 the week before.  These funds have liquidated long positions for the last six weeks, accelerating the process the last two.

Over the last two weeks, these funds have dropped their net long position by 25,612 contracts, or 39.6%, from 64,697.  Their most recent peak was 92,553 long positions the week ended June 2.

The CFTC said managed money arrived at their new position by selling 6,951 longs and adding 7,795 shorts and 2,089 spread positions.  This left them representing 27.3% of all open long positions and 10.9% of open short positions.

During the week, total open interest rose 2,706 contracts, or 1.15%, to 238,043 from 235,337, and the most-active Oct contract traded sideways.

Commercials, meanwhile, covered 12,371, or 12.8%, short live cattle positions to leave them with a net 84,450 short positions from 96,821.

The CFTC said they arrived at their new net position by buying 3,780 long positions and covering 8,591 shorts, leaving them representing 10.7% of total long open interest and 46.2% of total short open interest.

 

FUNDS GO LONG CORN, FIFTH STRAIGHT WEEK

 

During the latest reporting week, managed money raised its net long position in corn for the fifth straight week to its largest in more than a year.

The CFTC reported a fund net long position of 247,791 contracts, up 72,496, or 41.4%, from 175,295.  Since the funds began taking on a longer corn position the week endeded June 23, they have added 399,058 net longs.

In the latest week, funds added 43,812 new long positions and covered 28,684 shorts while adding 13,278 spreads.  This left them representing 22.4% of total long open interest and just 4.5% of total short open interest.

Commercials continued to add to their net short position, taking them to their largest position in more than a year.  The CFTC reported them short 451,212 contracts, up 52,253, or 13.1%, from 398,959 the previous week.  Since beginning the latest build of short contracts the week of June 23, commercials have increased their position by 305,614, or 209.9%, from 145,598.

During the latest reporting week, total open interest rose 37,182 contracts, or 2,76%, to 1.386 million from 1.349 million.  At the same time, prices for the most-active Dec contract fell from a contract high of $4.43 ¼ a bushel to a low of $4.02 ½.

Farnsfield Research sayd if open interest is rising and prices are declining, the new shorts are in control.  It confirms a downward trend.

 

CASH CATTLE MARKET TRADES LOWER

 

Cash fed cattle markets last week traded lower, with live-basis sales at mostly $145 to $148 per cwt, mostly $3 lower.  On a dressed basis, cattle traded at $230 to $232, down $4.

The USDA’s beef cutout values Friday were mixed but carried through a general declining trend.  The choice cutout was $230.70 per cwt, down $1.89 from Thursday but down $2.60 for the week.  Select was $228.23, up $0.27 on the day but down $1.16 for the week.

The CME Feeder Cattle Index for the seven days ended Thursday was $216.09 per cwt, down $0.72, compared with 0the Aug settlement Friday of $209.67.