Funds Expand Long Cattle Position Again

Large commodity investment funds, called managed money, again expanded their net long live cattle futures positions to the highest point in more than a year during the week ended Tuesday as commercial traders lengthened their net short position to its largest in more than a year.

The Commodity Futures Trading Commission Friday said in its weekly Commitments of Traders report that managed money’s new live cattle position was long a net 133,180 contracts, up 6,336, or 5.0%, from 126,844 the previous week.

Commercial traders, those who theoretically could make or take delivery of a futures contract, extended their net short position by 1,941 contracts, or 0.96%, to 204,074 from 202,133 the previous week.

Swap dealers, those who facilitate cash or over-the-counter transactions, extended their net long live cattle position by 524 contracts, or 0.53%, to 99,507 from 98,983, also their longest in more than a year.

The CFTC said managed money arrived at its new net long cattle position by adding 7,776 new long positions and 1,440 short positions along with 4,006 spread positions.  This left them representing 35.3% of total long open interest and 3.2% of total short open interest and 8.4% of total spread open interest.

Commercial traders got to their new position by liquidating 4,498 long positions and covering 2,557 short positions.  This left them in control of 5.3% of total long open interest and 54.5% of total short open interest.

Swap dealers added 12 new long positions and covered 512 short positions while unwinding 227 spreads to get to their new position.  They were left holding 24.9% of total long open interest, 0.8% of total short open interest and 0.4% of total spread open interest.

The CME Group said total live cattle open interest for the week rose 5,399 contracts, or 1.32%, to 414,510 from 409,111.

During the week, the most-active Jun futures contract rose from a close of $115.65 per cwt to a contract high of $117.57 on Friday before dropping to close at $115.97.  The contract has since made three strong moves higher to new contract highs each day.

 

FUNDS CORN POSITION SHORTEST IN 8 ½ MONTHS

 

Meanwhile, managed money extended their collective net short corn position to 180,360 contracts, up 19,983, or 12.5%, from 160,377 the previous week and the largest since the week ended Sep. 6 when it was 186,127 contracts.  This makes them shorter than commercial traders.

Commercials reduced their net short corn position to 126,448 contracts from 160,832, a drop of 34,384, or 21.4%, their lowest in more than a year.

Managed money arrived at their new corn position by adding 9,389 new long positions and 29,372 new short positions while unwinding 6,266 spreads, leaving them with 13.7% of total long open interest, 26.3% of short open interest and 7.5% of spread open interest.

Commercials liquidated 5,638 longs and covered 40,022 shorts, leaving them with 27.2% of long open interest and 36.0% of short open interest.

 

CASH CATTLE QUIET

 

Cattle traded on the livestock exchange Wednesday at an average of $131.14 per cwt, up $2.54 from the previous week.  Deferred sales ranged from $125.37 for steers and $125.48 for heifers.

Cash cattle traded last week at mostly $135 to $138 per cwt on a live basis, up $5 to $6, and at $215 to $219 dressed, up $5 to $9.

The USDA’s choice cutout Friday was up $2.63 per cwt at $221.78, while select was up $1.00 at $207.68.  The choice/select spread widened to $14.10 from $12.47 with 90 loads of fabricated product sold into the spot market.

The CME Feeder Cattle Index for the seven days ended Thursday was $141.38 per cwt, up $1.52.  This compares with Friday’s May settlement at $149.55, up $2.97.