Funds Expand Long Cattle Position

Managed money, a proxy for large commodity investment firms, further expanded their collective net long live cattle futures position during the week ended Tuesday, taking them to their largest long position in three months.

The Commodity Futures Trading Commission’s weekly Commitments of Traders report Friday showed that managed money’s new live cattle position was long by 12,626 contracts, up 2,008, or 18.9%, from 10,618 a week before and their longest since Feb. 18 when it was long by 30,312 contracts.

At the same time, those who own the cattle and come to the futures market primarily as hedgers, known as commercial traders, extended their collective net short position to its largest in three months.  At 105,693 contracts, it was up 3,125, or 3.05%, from 102,568 a week earlier and their largest net short position since Feb. 25 when it was short by 113,443.

The CFTC said managed month arrived at its new net long cattle position by adding 1,837 long positions, covering 171 short positions and unwinding 2,069 spread positions.  This left their holdings at 15.2% of total long open interest, 10.3% of total short open interest and 12.8% of total spread open interest.

Commercial traders got to their new net short position by liquidating 4,091 long positions and covering 966 short positions.  This left them in control of 12.0% of total long open interest and 53.0% of total short open interest.

The CME Group said total live cattle open interest as of Tuesday was 258,036 contracts, down 2,559, or 0.98%, from 260,595 a week earlier.

CME Group data also showed that the most-active Aug cattle contract declined during the CFTC reporting week, ending Tuesday with a settlement of $99.07 per cwt, compared with $101.70 a week earlier.




At the same time, managed money continued to sell Chicago corn futures, extending their collective net short corn position to 246,059 contracts, their largest in more than a year.  This was up 31,380, or 14.6%, from 214,679 contracts the week before.

Conversely, commercial traders continued to buy Chicago corn futures, moving from being net short to net long.  Their new corn position was long by 3,908 contracts, compared with being short by 16,092 a week earlier.  It was their only net long position in more than a year.

The CFTC said managed money arrived at their new net short corn futures position by adding 2,500 long positions, 33,880 short positions and unwinding 7,351 spread positions.  This left them in charge of 8.1% of total long open interest, 25.3% of total short open interest and 12.1% of total spread open interest.

Commercials got to their new net long corn position by adding 10,124 long positions and covering 9,876 short positions, leaving them with 36.8% of total long open interest and 36.6% of total short open interest.

Total corn open interest Tuesday was 1.437 million, compared with 1.421 million a week earlier, the CME said.




Fed cattle trading was reported last week in the Plains at $117 to $120 per cwt on a live basis, steady to up $7 from the previous week.  Dressed-basis trading was seen at $175 to $190 per cwt, steady to up $5.

The USDA choice cutout Friday was down $5.07 per cwt at $396.74, while select was off $8.35 at $374.18.  The choice/select spread widened to $22.56 from $19.28 with 60 loads of fabricated product sold into the spot market.

The CME Feeder Cattle index for the seven days ended Thursday was $126.24 per cwt, down $0.36.  This compares with Friday’s Aug contract settlement of $128.80, down $0.07.