Funds Reverse, Go Long Cattle

Managed money, or large commodity investment funds, reversed a two-week slide in their net long live cattle futures position during the week ended Tuesday, taking their new long position to 93,616 contracts.

The Commodity Futures Trading Commission Friday announced the new managed money position Friday in its weekly Commitments of Traders report.  Managed money’s new net long position was up 1,630 contracts, or 1.77%, from 91,986 the previous week.

Swap dealers, those who facilitate over-the-counter trades, backed off their net long position by 2,400 contracts, or 2.65%, to 88,328 from 90,728 the previous week.  Such a large long position is unusual for swap dealers who usually maintain a net long position nearer 50,000 to 55,000 contracts.

Commercial traders, those who actually own the cattle at some point in their lives, increased their net short position during the week to 158,088 contracts, from 155,169, a gain of 2,919, or 1.88%.

The CFTC said managed money arrived at its new position by adding 607 long positions and covering 1,023 shorts while adding 3,996 spread trades.  This left them representing 31.5% of total long open interest and 3.6% of total short open interest.

Swap dealers reached their new position by liquidating 2,427 long positions and covering 27 short positions while unwinding 831 spread positions.  This left them holding 27.7% of total long open interest and 1.4% of total short positions.

Commercials got to their new short positions by adding 442 long positions and 3,361 short positions, leaving them in control of 7.3% of total long open interest and 54.5% of total short open interest.

The CME Group said total live cattle open interest declined during the week by 7,960 contracts, or 2.43%, to 335,148 from 327,188.

The most-active Apr contract rose $2.62, or 2.27%, during the CFTC week to close at $117.92 per cwt from $115.30.




Meanwhile, managed money pared its net long corn position to 87,657 contracts from 106,758, a loss of 19,101, or 17.9%.

Commercial traders extended their net short corn position by 21,315 contracts, or 5.25%, to 427,678 contracts from 406,363.  This is their largest net short position since the week ended June 28 when it was 476,884.

The CFTC said managed money arrived at its new long position by liquidating 24,930 long positions and covering 4,829 short positions while adding 1,947 spread positons.  This left them representing 19.8% of total long open interest and 13.4% of total short open interest.

Commercial traders got to their new position by liquidating 51,154 long positions and covering 29,839 shorts, leaving them in control of 20.1% of total long open interest and 51.5% of total short open interest.

Total corn open interest during the week fell 139,845 contracts, or 9.31%, to 1.362 million from 1.501 million, the CME Group said.

The most-active May contract fell to a swing low of $3.67 ¼ a bushel from a close the previous Tuesday of $3.76 ½.




Cash cattle prices were steady to higher last week at mostly $125 to $126 per cwt on a live basis.  Dressed-basis trades came in at $200 to $201, versus $195 to $196.

Average fed cattle exchange auction prices Wednesday were $2.88 per cwt higher at $124.99, versus $122.11 a week earlier.

The USDA’s choice cutout Friday was down $0.28 per cwt at $208.07, while select was up $0.33 at $204.05.  The choice/select spread narrowed to $4.02 from $4.63 with 70 loads of fabricated product sold into the spot market.

The CME Feeder Cattle Index for the seven days ended Thursday was $126.61 per cwt, up $0.17.  This compares with Friday’s Mar settlement of $124.22, up $0.77.