Funds Sell More Long Cattle Positions

Managed money, a proxy for large commodity investment funds, further divested itself of long live cattle futures positions in the week ended Tuesday, said the Commodity Futures Trading Commission in its weekly Commitments of Traders report Friday.

It was the sixth straight week of managed money’s latest effort to pare its net long live cattle position.

Managed money’s new net long live cattle position as of Tuesday amounted to 98,540 contracts, down 17,533, or 15.1%, from 116,073 the previous week.  This was their lowest net long cattle position since Oct. 3 when it was 94,391 contracts.

During the latest CFTC reporting week, commercial traders, those who own cattle at some point and primarily are hedgers, reduced their net short live cattle position to 196,359 contracts from 206,581, a decline of 10,222, or 4.95%.

The CFTC said managed money arrived at its new live cattle position by liquidating 19,847 long positions, covering 2,314 short positions and placing 51 spread positions.  This left them representing 31.3% of total long open interest, 2.2% of total short open interest and 7.5% of spread open interest.

At the same time, commercial traders got to their new cattle position by liquidating 569 long positions and covering 10,791 short positions.  This left them in control of 7.6% of total long open interest and 65.6% of total short open interest.

The CME Group said total live cattle open interest as of Tuesday was 339,255 contracts, down 22,637, or 6.26%, from 361,892 the previous week.

During the CFTC reporting week, the most-active Feb futures contract fell to a swing low of $117.57 per cwt on Monday from the previous Tuesday’s close of $120.52, a decline of $2.95, or 2.45%.  The contract then bounced on Tuesday to close at $119.15.




Meanwhile, managed money reversed its three-week trend and got shorter corn futures.  As of Tuesday, they were short by 198,920 contracts, up 43,859, or 28.3%, from 155,061, the previous Tuesday.

Commercial traders also reversed their trend and got less short of corn.  Their new net short corn position was 175,084 contracts, compared with 193,946 the previous Tuesday, a decline of 18,862, or 9.73%.

The CFTC said managed money arrived at its new net short corn position by liquidating 23,830 long positions, adding 20,029 short positions and placing 23,118 more spread positions.  This left them representing 13.6% of total long open interest, 26.7% of total short open interest and 10.1% of total spread open interest.

Commercials got to their new short corn position by adding 22,362 long positions and 3,500 short positions, leaving them with 25.9% of total long open interest and 37.4% of total short open interest.

Total corn open interest rose during the week 34,052 contracts, or 2.29%, to 1.523 million contracts from 1.489 million, the CME Group said.




Only 75 head of fed cattle sold on the Livestock Exchange video auction Wednesday at $116 per cwt.

The bulk of the cash trade took place on Friday from $118 to $120.50 per cwt on a live basis, mostly $119 to $120, up $2 to $3.  Dressed-basis trade was mostly at $188 per cwt, steady to up $1.

The USDA’s choice cutout Friday was up $0.83 per cwt at $201.87, while select was off $0.44 at $183.25.  The choice/select spread widened to $18.62 from $17.35 with 94 loads of fabricated product sold into the spot market.

The CME Feeder Cattle index for the seven days ended Thursday was $154.40 per cwt, up $0.09.  This compares with Friday’s Jan settlement at $147.75 per cwt, up $1.50.