Funds Return To Buying Cattle Futures

After a one-week sell-off, managed money returned to buying live cattle futures contracts in the week ended Tuesday as hedgers continued to cover short positions.

The data came from the Commodity Futures Trading Commission’s weekly Commitments of Traders report Friday.

 

FUNDS BUY CATTLE FUTURES

 

Managed money, a proxy for large commodity futures index funds, Tuesday had a collective net long live cattle position of 66,718 contracts, up 1,677, or 2.58%, from 65,041 a week earlier.

At the same time, hedgers, better known as commercial traders, since they own, or will own, the cattle represented by a futures contract, had a total net short position of 90,326 contracts, down 1,658, or 1.80%, from 91,984 a week earlier.

The CFTC said managed money arrived at their new live cattle position by adding 106 long positions, covering 1,571 short positions and putting on 3,062 spread positions.  This left them in control of 26.5% of total long open interest, 6.1% of total spread open interest and 16.6% of total spread open interest.

Commercials got to where they were Tuesday by liquidating 278 long positions and covering 1,936 short positions, leaving them holding 12.9% of total long open interest and 40.6% of total short open interest.

The CFTC also said total live cattle open interest Tuesday was 325,916 contracts, down 1,826, or 0.56%, from 327,742 a week earlier.

CME Group data showed the most-active Oct live cattle contract rose in value during the CFTC-reporting week to settle Tuesday at $186.12 per cwt, compared with $184.52 a week earlier.

 

FUNDS COVER SHORT CORN POSITIONS

 

Tuesday, managed money had a collective net short Chicago corn futures position of 333,885 contracts, down 18,887, or 5.35%, from 352,772 a week earlier.

Commercials had a total net long corn position Tuesday of 1,708 contracts, down 19,259, or 91.9%, from 20,967 a week earlier.

The CTTC said managed money arrived at their new corn position by adding 8,289 long positions, covering 10,598 short positions and unwinding 26,589 spread positions.  This left them with 9.7% of total long open interest, 30.6% of total short open interest and 14.6% of total spread open interest.

Commercials got to where they were by liquidating 5,938 long positi8ons and adding 16,737 short positions, leaving them in control of 27.7% of total long open interest and 27.8% of total short open interest.

CFTC data showed total corn open interest Tuesday at 1.597 million contracts, up from 1.573 million a week earlier.

The most-active Dec contract rose in value during the CFTC-reporting week to settle at $4.17 ¼ a bushel, up from $4.08 ¾ a week earlier.

 

CATTLE, BEEF RECAP

 

The USDA reported formula and contract base prices for live FOB steers and heifers last week ranged from $188.00 per cwt to $198.00, compared with the previous week’s range of $188.00 to $200.95 per cwt.  FOB dressed steers, and heifers went for $296.12 per cwt to $308.96, compared with $297.15 to $309.23.

The USDA choice cutout Friday was up $1.31 per cwt at $313.77 while select was up $2.35 at $297.46.  The choice/select spread narrowed to $16.31 from $17.35 with 79 loads of fabricated product and 23 loads of trimmings and grinds sold into the spot market.

The weighted average USDA listed wholesale price for fresh 90% lean beef was $373.13 per cwt, and 50% beef was $149.38.

The USDA said basis bids for corn from feeders in the Southern Plains were unchanged at $1.56 to $1.78 a bushel over the Sep corn contract, which settled at $3.94 1/2 a bushel, down $0.11 1/2.

The CME Feeder Cattle Index for the seven days ended Thursday was $258.84 per cwt, down $0.22.  This compares with Friday’s Aug contract settlement of $259.70, up $1.07.