Funds Cut Long Cattle Positions

Managed money, a term for large investment funds, reduced their net long position in live cattle futures during the week ended Tuesday, taking it to its lowest since the week ended March 1.

The Commodity Futures Trading Commission Friday reported that for the week, managed money reduced its net long live cattle position to 23,537 contracts, a decline of 1,774, or 7.01%, from 25,311.  This was a reversal from the previous week in which their net long position went up.

Commercial traders, those who theoretically could make or take delivery of a futures contract, reduced their net short position by 1,753 contracts, or 2.67%, to 63,903 from 65,656 during the same week.  This took them to their lowest position since the week ended March 1.

The CFTC said managed money arrived at its new position by adding 3,357 long positions and 5,131 short positions while unwinding 2,314 spreads.  This left them representing 23.8% of total long open interest and 15.2% of total short open interest.

Commercial traders got to their new position by liquidating 6,029 long positions and covering 7,782 short positions to leave them in control of 15.5% of total long open interest and 38.8% of total short open interest.

The CME Group reported that for the latest CFTC reporting week, total live cattle open interest fell 8,202 contracts, or 2.90%, to 274,648 from 282,850.

During the latest CFTC week, the most-active Jun live cattle contract bounced off a contract low of $113.90 per cwt to a high Tuesday of $118.80 to close at $118.75.  From the previous Tuesday’s close of $118.57, the contract gained $0.18.

 

FUNDS GO LONG CORN

 

During the same reporting week, managed money went from being net short corn to being net long.  They advanced to their largest net long position since the week ended Oct. 13 when it was 91,707 contracts.

The CFTC reported the latest net long corn position for managed money was 74,653 contracts, up 103,925 from a net short position of 29,272 the previous week.

During the same week, commercial traders added to their net short position to the tune of 78,569 contracts, or 27.1%, to 368,574 from 290,005.  This was their largest net short position since the week ended Aug. 4 when it was 380,369 contracts.

The CFTC said managed money arrived at its new position by adding 42,975 long positions and covering 60,950 short positions while adding 8,017 spreads.  This left them representing 16.1% of total long open interest and 10.7% of total short open interest.

Commercials got to their new position by liquidating 21,686 long positions and adding 56,883 short positions, leaving them in control of 24.7% of total long open interest and 51.0% of total short open interest.

The CME Group said total corn open interest fell 35,903 contracts, or 2.49%, to 1.405 million from 1.441 million during the week.

All the while, the most-active Jul contract made a new low for the move to $3.68 ½ a bushel on Monday after hitting a nine-month high on Thursday of $4.02.

 

CASH CATTLE MARKET TRADES LOWER

 

Cash cattle markets Friday traded lightly in a clean-up trade.  Prices were steady at $124 per cwt on a live basis and $195 to $197 on a dressed basis.  Both were down $3 to $5 from the previous week.

The USDA’s choice cutout Friday was down $1.05 per cwt at $211.45, while select was off $0.82 at $202.27.  The choice/select spread narrowed to $9.18 from $9.41 with 78 loads of fabricated product sold into the spot market.

The CME Feeder Cattle Index for the seven days ended Thursday was $144.30 per cwt, down $1.38.  This compares with the May settlement Friday of $140.42, down $0.15.