For the fourth straight week, large commodity investment funds, known as managed money, cut their net long live cattle futures position amid a widespread belief that cattle prices would be challenged going forward.
The Commodity Futures Trading Commission said in its weekly Commitments of Traders report Friday that managed money’s collective net long cattle position as of Tuesday amounted to 71,914 contracts, down 15,125, or 17.4%, from 87,039 the previous Tuesday and the fewest since Dec 4 when it was 68,960.
At the same time, commercial traders, those who own the cattle and primarily are hedgers, cut their net short position for the fourth straight week to end Tuesday with a net short position of 173,928 contracts, down from 87,039 the previous week and their shortest since Jan. 29 when it was 173,040 contracts.
The CFTC said managed money arrived at its new net long cattle position by liquidating 10,400 long positions, adding 4,725 short positions and putting on 4,163 new spread positions. This left their position representing 24.1% of total long open interest, 5.2% of total short open interest and 16.7% of total spread open interest.
Commercial traders got to where they were by adding 5,423 long positions and covering 7,197 short positions, leaving them in control of 8.5% of total long open interest and 54.3% of total short open interest.
The CME Group said total live cattle open interest as of Tuesday was 380,260 contracts, down only 40, or 0.01%, from 380,300 a week earlier.
CME Group data also showed that the most-active Aug futures contract had a net gain during the CFTC reporting week, settling Tuesday at $108.27 per cwt, compared with $106.72 a week earlier.
FUNDS BUY CORN HEAVILY
Meanwhile, managed money bought Chicago corn futures aggressively during the week ended Tuesday. The CFTC said managed money’s collective net short position then was 117,954 contracts, down 180,597, or 60.9%, from 298,551 just one week before.
At the same time, commercial traders sold aggressively, ending Tuesday with a net short position of 175,059 contracts, up 153,203, or 701.0%, from 21,856 a week earlier.
The CFTC said managed money arrived at its new net short corn position by adding 38,405 long positions, liquidating 142,192 short positions and putting on 1,279 new spread positions. This left their position representing 12.8% of total long positions, 19.6% of total short positions and 11.5% of total spread positions.
Commercial traders got to where they were by adding 27,990 long positions and 181,193 short positions, leaving them holding 30.0% of total long open interest and 40.1% of total short open interest.
The CME Group said total corn open interest as of Tuesday was 1.743 million contracts, up from 1.637 million a week earlier. This was a gain of 106,015 contracts, or 6.48%.
The CME Group also said that the most-active Jul contract rose to $3.94 ¼ a bushel from $3.68 ¾.
CATTLE, BEEF RECAP
Cash cattle trading was reported last week in the Plains at $114 to $116 per cwt, mostly $115, on a live basis, down $1 to $4 from the previous week. Dressed-basis trading was seen at $185 to $186 per cwt, down $4 to $5.
The USDA choice cutout Friday was up $0.85 per cwt at $221.64, while select was up $1.94 at $208.47. The choice/select spread narrowed to $13.17 from $14.26 with 70 loads of fabricated product sold into the spot market.
The CME Feeder Cattle index for the seven days ended Thursday was $136,81 per cwt, up $3.11 from the previous day. This compares with Friday’s Aug contract settlement of $143.22, up $0.20.