Funds Keep Liquidating Long Cattle Positions

Large commodity investment firms, or managed money, continued to cut their net long live cattle futures positions during the week ended Tuesday, said the Commodity Futures Trading Commission’s weekly Commitments of Traders report Friday.

The CFTC said managed money’s new net long live cattle position of 79,046 contracts was the lowest since the week ended Dec. 13 when it was 73,815.  It also was under the previous week’s 92,753 contracts by 18,938, or 20.4%, and was the ninth consecutive week of declining net long positions.

Commercial traders, those who theoretically could make or take delivery of a live cattle futures contract, cut their net short position for the ninth straight week as well.  The new position is 172,203 contracts, down 10,399, or 5.69%, from 182,602 the previous week.  It also is the lowest net short position for commercials since the week of March 21 when it was 169,553.

At the same time, swap dealers, those who facilitate cash, or over-the-counter trades, had a net long position of 95,754 contracts, down 688, or 0.71%, from 96,442 the previous week.

The CFTC said managed money arrived at its new live cattle position by liquidating 9,980 long positions, adding 3,727 short positions and putting on 479 spread positions.  This left them representing 31.0% of total long positions, 5.5% of total short positions and 6.4% of total spread positions.

Commercials got to where they were by liquidating 1,019 long positions and covering 11,418 short positions, leaving them in control of 7.7% of total long open interest and 63.2% of total short open interest.

Swap dealers liquidated 538 long positions, added 150 short positions and unwound 1,590 spread positions, leaving them with 32.0% of total long open interest, 1.1% of total short open interest and 0.3% of spread open interest.

The CME Group said total live cattle open interest on Tuesday was 311,106 contracts, down 15,341, or 4.70%, from 326,447 the previous week.

During the CFTC week, the most-active Oct live cattle contract declined $1.55, or 1.40%, to close at $109.05 per cwt from $110.60 the previous week.  However, it set a recent low of $105.75 last Tuesday.




During the week, managed money also cut its net long corn position 34,797 contracts, or 54.6%, to 28,885 from 63,682.

Commercials trimmed their net short corn position to 302,674 contracts from 333,681, a dip of 31,007, or 9.29%.

Managed money liquidated 606 long positions while adding 34,191 shorts and 9,025 spreads, leaving them with 16.6% of total long open interest, 14.6% of total short open interest and 7.0% of spread open interest.

Commercials added 20,287 long positions while covering 15,720 shorts, leaving them with 26.2% of total long open interest and 47.7% of total short open interest.




There were no sales Wednesday on the livestock exchange video auction.  A week earlier, cattle sold at $115.04 per cwt, down $0.96 from $116.00 the previous week.  Cattle with 1- to 9-day delivery sold at $115.28, versus $116 the previous week.  Those with 1- to 17-day delivery sold at $114.50, and cattle with 17- to 30-day delivery sold at $114.00.

Cash action was seen last week at mostly $110 up to $110.50 per cwt on a live basis, down $4 to $6 from the previous week, and at $175 to $177 dressed down $8 to $10.

The USDA’s choice cutout Friday was down $1.34 per cwt at $194.29, while select was off $1.70 at $192.50.  The choice/select spread widened to $1.79 from $1.43 with 98 loads of fabricated product sold into the spot market.

The CME Feeder Cattle index for the seven days ended Thursday was $145.80 per cwt, up $0.36.  This compares with Friday’s Aug settlement at $140.50, up $0.02.