Funds’ Long Live Cattle Position Largest In More Than A Year

Commodity funds, or managed money, increased their net long live cattle position for the fifth straight week during the week ended Tuesday to its largest position in more than a year.

The Commodity Futures Trading Commission said in its weekly Commitments of Traders report Friday that commercial traders, those who actually own or handle the cattle, expanded their net short position, also for the fifth straight week and to its largest in more than a year.

Managed money’s new net long live cattle position was 73,815 contracts, up 4,387, or 6.32%, from 69,428 the previous week.

Commercials’ new net short position was 113,676 contracts, up 9,498, or 9.12%, from 104,178 the previous week as they took advantage of the longer-than-expected holiday rally and expanded their hedged positions.  In many cases, it is said, this hedging interest was at the behest of their banks.

The CFTC said managed money arrived at its new net long position by adding 3,242 long positions and covering 1,145 short positions while unwinding 556 spreads.  This left them representing 30.1% of total long positions and 4.6% of total short positions.

The CFTC said commercials got to their new positions by liquidating 2,200 long positions and adding 7,298 short positions, leaving them in control of 11.5% of total long open interest and 50.9% of total short open interest.

Total open interest rose to 289,077 contracts from 284,038, the CME Group said.

During the CFTC week, the most-active Feb futures contract formed a “three methods” formation on daily candlestick charts when it opened and closed three times in a narrow range with the total opening and closing ranges all within the open and close of Tuesday, Dec. 6, followed by a strong return to the previous bullish pattern.  This led to Tuesday’s close of $113.97 per cwt, up $2.92, or 2.63%, from $111.05 the previous Tuesday.




Managed money continued to get short corn during the latest CFTC week, moving up 3,622 contracts, or 5.53%, to 69,050 from 65,428 the previous week.

Meanwhile, commercial traders almost held their net short position steady rising only to 301,099 contracts from 301,553 the previous week.

Managed money arrived at its new position by liquidating 1,283 long positions and adding 2,339 shorts and 4,153 spread positions.  This left them representing 13.9% of total long open interest and 19.5% of total short open interest.

Commercials got to their new position by liquidating 984 long positions and covering 1,438 shorts, leaving them in control of 22.3% of total long open interest and 47.0% of total short open interest.

The CME Group said total open interest during the week declined 1,365 contracts, or 0.11%, to 1.220 million from 1.222 million.

The most-active Mar contract held relatively steady during the week, ending at $3.61 a bushel on Tuesday from $3.60 ½ the previous week.




Superior auction prices Wednesday were steady to slightly stronger at an average of $110.47, versus $110.31 a week ago, in a range from $110 to $111.50 in the south to $109.50 to $111 in the north.

Cash cattle then traded at $110 to $111.50 per cwt on a live basis, steady to down $0.50.  Dressed-basis trading was at $170 to $171.

The USDA’s choice cutout Friday was $1.17 per cwt higher at $194.63, while select was up $2.55 at $181.09.  The choice/select spread narrowed to $14.54 from $14.92 with 55 loads of fabricated product sold into the spot market.

The CME Feeder Cattle Index for the seven days ended Thursday was $131.10 per cwt, up $0.57.  This compares with Friday’s Jan settlement at $129.90, up $2.20.