Funds Cut Long Cattle Position

Large commodity investment funds, called managed money, cut their net long live cattle futures position for the third straight week in the week ended Monday to the lowest level in 3 ½ months.

The Commodity Futures Trading Commission revealed the data in its weekly Commitments of Traders report on Friday.

Managed money cut its net long position by 6,264 contracts, or 5.18%, to 114,593 contracts from 120,857 the previous week ended Tuesday.  The last time managed money’s net long cattle position was lower was in the week ended March 21 when it was 114,814 contracts.

Commercial traders, those who theoretically could make or take delivery of a futures contract, cut their net short position for the third straight week to 200,315 contracts, from 205,696 the previous week.  This was a decline of 5,381 contracts, or 2.62% and was the lowest net short position since the week ended April 1 when it was 195,100 contracts.

During the same week, swap dealers, those who facilitate over-the-counter or cash trades, boosted their net long cattle position to 103,228 contract from 100,321, a gain of 2,907, or 2.90%.  This is the largest net long position for these traders in more than a year.

The CFTC said managed money arrived at its new net long cattle position by liquidating 7,235 long positions, covering 971 shorts and unwinding 3,451 spread positions.  This left them representing 33.0% of total long open interest, 2.6% of total short open interest and 10.5% of total spread open interest.

Commercials got to their new position by adding 647 long positions and covering 4,734 short positions, leaving them in control of 6.3% of total long open interest and 59.4% of total short open interest.

Swap dealers added 2,656 long positions and 768 spread positions while covering 251 shorts, leaving them holding 27.9% of total long open interest, 0.6% of total short open interest and 0.5% of total spread open interest.

The CME Group reported that total live cattle open interest declined 8,330 contracts, or 2.16%, to 377,788 contracts from 386,118 the previous week.

During the latest CFTC reporting week, the most-active Aug live cattle contract rose slightly to $115.75 per cwt from $115.02 the previous Tuesday.  The contract has since dropped to set a 2 ½-month low before late-week short covering added support.




During the latest CFTC reporting period, managed money slashed its net short corn position to 37,607 contracts from 105,570 the previous week, a cut of 67,963, or 64.4%.

Commercials, meanwhile, extended their net short corn position to 234,109 contracts from 163,527, a gain of 70,582, or 43.2%.

The CFTC said managed money arrived at its new position by adding 3,856 long positions, covering 64,107 short positions and unwinding 17,557 spreads.

Commercials liquidated 11,838 longs and added 58,744 shorts.




Fed cattle sales on the livestock exchange video auction Wednesday were very limited.  One lot sold in the south at $117.75 per cwt on a live basis, and one lot sold in the north at $117.25, down $1.50 to $2.00.

Cash cattle traded at $118 per cwt live, down $1 from the bulk of last week’s trade.  Dressed-basis sales were at $188, down $1 to $2.

The USDA’s choice cutout Friday was down $1.21 per cwt at $218.84, while select was off $1.25 at $202.51.  The choice/select spread widened to $16.33 from $16.29 with 125 loads of fabricated product sold into the spot market.

The CME Feeder Cattle index for the seven days ended Thursday was $148.19 per cwt, down $2.22.  This compares with Friday’s Aug settlement at $145.02, up $0.40.