Large commodity index funds, called managed money, turned to buying live cattle futures in the week ended Tuesday as hedgers sold short, according to data from the Commodity Futures Trading Commission’s weekly Commitments of Traders report Friday.
MANAGED MONEY BUYS CATTLE
Tuesday, managed money had a collective net long live cattle futures position of 40,113 contracts, up 3,081, or 8.32%, from 37,032 a week earlier. It was their first buying week after five weeks of selling.
At the same time, traders who approach the futures market primarily as a means of hedging risk, called commercial traders, had a total net short position of 93,159 contracts, up 4,707, or 5.32%, from 88,452 a week earlier. It also was their first week of selling after five weeks of covering short positions.
The CFTFC said managed money arrived at their new live cattle position by adding 2,901 long positions, covering 180 short positions and putting on 1,246 spread positions. This left them in possession of 23.4% of total long open interest, 8.7% of total short open interest and 15.4% of total spread open interest.
Commercials got to where they were Tuesday by liquidating 5,946 long positions and covering 1,239 short positions, leaving them with 14.0% of total long open interest and 48.1% of total short open interest.
The CFTC said total live cattle open interest Tuesday was 273,176 contracts, up from 273,036 a week earlier.
CME Group data showed the most-active Jun futures contract rose during the CFTC-reporting week to settle Tuesday at $177.15 per cwt, compared with $175.72 a week earlier.
FUNDS COVER CORN SHORTS
Tuesday, managed money had a collective net short Chicago corn position of 225,943 contracts, down 45,657, or 16.8%, from 271,600 a week earlier.
Meanwhile, commercials had a total net short corn position of 59,293 contracts, up 43,182, or 268.0%, from 16,111 a week earlier.
The CFTC said managed money arrived at their new corn position by adding 14,090 long positions, covering 31,558 short positions and unwinding 589 spread positions. This left them holding 11.5% of total long open interest, 26.4% of total short open interest and 14.9% of total spread open interest.
Commercials got to their new position by liquidating 15,984 long positions and adding 27,198 short positions, leaving them with 25.7% of total long open interest and 29.6% of total short open interest.
The CFTC said total corn open interest Tuesday was 1.513 million contracts, down from 1.521 million a week earlier.
The most-active Jul contract settled Tuesday at $4.52 ½ a bushel versus $4.42 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 $181.32 per cwt to $187.00, compared with the previous week’s range of $182.00 to $185.81 per cwt. FOB dressed steers, and heifers went for $285.91 per cwt to $290.32, compared with $287.22 to $292.58.
The USDA choice cutout Friday was up $0.22 per cwt at $297.14 while select was down $0.94 at $288.72. The choice/select spread widened to $8.42 from $7.26 with 113 loads of fabricated product and 13 loads of trimmings and grinds sold into the spot market.
The weighted average USDA listed wholesale price for fresh 90% lean beef was $347.75 per cwt, and 50% beef was $82.62.
The USDA said basis bids for corn from feeders in the Southern Plains were unchanged at $1.43 to $1.53 a bushel over the May corn contract, which settled at $4.40 a bushel, down $0.01.
No live cattle contracts were tendered for delivery Friday.
The CME Feeder Cattle Index for the seven days ended Thursday was $245.53 per cwt, up $0.38. This compares with Friday’s May contract settlement of $248.70, up $2.45.