5-14-24 – Large commodity index funds, known as managed money, increased their collective net long live cattle futures position in the week ended Tuesday as hedgers trimmed their total net short position.
The Commodity Futures Trading Commission published the data Friday for positions at the close of business the previous Tuesday in its weekly Commitments of Traders report.
FUNDS BUY CATTLE
As of last Friday, May 7, managed money had a collective net long live cattle position of 40,754 contracts, up 1,281, or 3.25%, from 39,473 a week earlier.
At the same time, hedgers, or commercial traders since they have the capacity to make or take delivery of a futures contract, had a total net short live cattle position of 86,879 contracts, down 3,132, or 3.48%, from 90,011 a week earlier.
The CFTC said managed money arrived at their new cattle position by liquidating 1,678 long positions, covering 2,959 short positions and unwinding 2,391 spread positions. This left them in possession of 22.6% of total long open interest, 7.7% of total short open interest and 14.2% of total spread open interest.
Commercial traders got to where they were last Tuesday by adding 1,898 long positions and covering 1,234 short positions, leaving them in control of 15.0% of total long open interest and 46.8% of total short open interest.
The CFTC also said total live cattle open interest last Tuesday was 272,777 contracts, down 3,208, or 1.16%, from 275,985 a week earlier.
CME Group data showed that the most-active Jun contract rose in value during the CFTC-reporting week to settle last Tuesday at $177.62 per cwt, compared with $174.97 a week earlier.
FUNDS COVER CORN SHORTS
Meanwhile, managed money covered a massive number of short corn positions, ending last Tuesday with a short position of 93,777 contracts, down 119,338, or 56.0%, from 213,115 a week earlier. It was their smallest net short position since Aug. 29, 2023, when it was 91,131 contracts.
Commercials last Tuesday had a total net short corn position of 179,222 contracts, up 106,875, or 147.7%, from 72,347 a week earlier. It was their largest short position since Aug. 1, 2023, when it was 211,215 contracts.
The CFTC said managed money arrived at their new corn position by adding 30,433 long positions, covering 88,905 short positions and unwinding 8,153 spread positions. This left them with 13.9% of total long open interest, 20.3% of total short open interest and 14.2% of total spread open interest.
Commercials got to where they were last Tuesday by liquidating 10,892 long positions and adding 95,983 short positions, leaving them with 23.0% of total long open interest and 35.3% of total short open interest.
CATTLE, BEEF RECAP
The USDA reported formula and contract base prices for live FOB steers and heifers this week ranged from $185.06 per cwt to $185.48, compared with last week’s range of $184.00 to $188.84 per cwt. FOB dressed steers, and heifers went for $293.25 per cwt to $294.62, compared with $286.69 to $295.41.
The USDA choice cutout Monday was up $4.38 per cwt at $298.95 while select was up $3.01 at $287.18. The choice/select spread widened to $11.77 from $10.40 with 82 loads of fabricated product and 31 loads of trimmings and grinds sold into the spot market.
The weighted average USDA listed wholesale price for fresh 90% lean beef was $348.48 per cwt, and 50% beef was $83.44.
The USDA said basis bids for corn from feeders in the Southern Plains were unchanged to up $0.02 at $1.36 to $1.46 a bushel over the Jul corn contract, which settled at $4.72 1/2 a bushel, up $0.02 3/4.
The CME Feeder Cattle Index for the seven days ended Friday was $241.36 per cwt, up $0.75. This compares with Monday’s May contract settlement of $239.37, up $0.57.
IN OUR OPINION
–News reports that consumers are shying away from fast food restaurants because of rising prices are something to consider. If consumers are saying fast-food hamburgers are too expensive, will they replace them with at-home burgers? If they do, it’s a trade-off, but if they don’t, what will they eat instead? Whatever it will be, it has to be a quick fix because half the allure of fast food is the “fast” part, and the other is the convenience.