Two straight days of declining live cattle futures prices during the week ended Tuesday sent large investors and hedgers to the sidelines, according to the Commodity Futures Trading Commission’s weekly Commitments of Traders report Friday.
The most-active Jun cattle futures contract has been working higher, but on Thursday and Friday of last week, a significant correction occurred, taking the Tuesday-to-Tuesday timeframe of the CFTC COT reporting period lower. Jun settled Tuesday at $120.05 per cwt, compared with $121.45 a week earlier.
FUNDS CUT LONG CATTLE POSITION
Large commodity investment firms, known as managed money, Tuesday had a collective net long position of 75,177 contracts, down 3,512, or 4.46%, from 78,689 a week earlier. It was their lowest position since Feb. 2 when it was 70,527 contracts.
Hedgers, who own or can own the cattle, known as commercial traders, had a collective net short position Tuesday of 154,752 contracts, down 5,383, or 3.36%, from 160,135 a week earlier. It was their smallest net short position since Feb. 2 when it was 148,140 contracts.
The CFTC said managed money arrived at its new position by liquidating 600 long positions, adding 2,912 short positions and unwinding 1,219 spread positions. This left their position representing 28.2% of total long open interest, 5.8% of total short open interest and 12.4% of total spread open interest.
Commercials got to where they were Tuesday by adding 2,178 long positions and covering 3,205 short positions, leaving them in control of 10.6% of total long open interest and 56.7% of total short open interest.
The CME Group said total live cattle open interest Tuesday was 334,849 contracts, down 4,691, or 1.38%, from 339,540 a week earlier.
FUNDS GET LONGER CORN
As of Tuesday, managed money had a net long corn position totaling 379,509 contracts, up 18,723, or 5.19%, from 360,786 a week earlier and their largest in more than a year.
Commercials increased their collective net short corn position to 763,441 contracts, up 1,947, or 0.26%, from 761,494 a week earlier. It was their largest net short position since Feb. 23 when it was 783,355 contracts.
The CFTC said managed money arrived at their new corn position by adding 20,339 long positions, 1,616 short positions and unwinding 12,332 spread position. This left them holding 23.2% of total long open interest, 1.5% of total short open interest and 9.0% of total spread open interest.
Commercials got to where they were Tuesday by liquidating 41,453 long positions and covering 39,506 short positions. This left them in charge of 24.4% of total long open interest and 68.1% of total short open interest.
The CME said total corn open interest Tuesday was 1.744 million contracts, versus 1.791 million a week earlier.
CATTLE, BEEF RECAP
Fed cattle trading last week was at $115 to $116 per cwt on a live basis, up $1 from the previous week. Dressed-basis trading was at $184 to $185 per cwt, up $3 to $4.
The USDA choice cutout Friday was up $1.21 per cwt at $237.66, while select was up $1.52 at $227.77. The choice/select spread narrowed to $9.89 from $10.20 with 62 loads of fabricated product and 22 loads of trimmings and grinds sold into the spot market.
The USDA reported Friday that basis bids for corn from livestock feeding operations in the Southern Plains were unchanged at $1.25 to $1.27 a bushel over the May CBOT futures contract, which settled at $5.52 1/2 a bushel, up $0.06.
The CME Feeder Cattle Index for the seven days ended Thursday was $136.75 per cwt, up $1.29. This compares with Friday’s Apr contract settlement of $145.12 per cwt, up $0.90.