Funds Still Liquidating Cattle

Large commodity investment funds, known as managed money, continued to liquidate live cattle futures contracts during the week ended Tuesday, as hedgers covered short positions.

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

Managed money’s new collective net long position Tuesday stood at 30,312 contracts, down 4,652, or 13.3%, from 34,964 the week before and down 55,080, or 64.5%, from the latest high of 85,392 on Jan. 21.  The new position is their lowest since Oct. 22 when it was 28,340 contracts.

At the same time, those hedgers, the ones who own the cattle and are known as commercials, Tuesday had a collective net short live cattle futures position of 130,617 contracts, down 8,566, or 6.15%, from 139,183 the week before and down 31,846, or 19.6%, from their latest high of 162,463 on Jan. 21.  It was their lowest net short position since Oct. 29 when it was 114,116 contracts.

The CFTC said managed money arrived at their new net long cattle position by adding 1,418 long positions, 6,070 short positions and unwinding 621 spread positions.  This left their collective holdings representing 19.9% of total long open interest, 10.9% of total short open interest and 16.0% of total spread open interest.

Commercials reached their new short cattle position by adding by adding 5,461 long positions and covering 3,105 short positions, leaving them with 12.1% of total long open interest and 50.6% of total short open interest.

The CME Group said total live cattle open interest Tuesday was 338,432 contracts, up from 333,065 a week before.  This was a gain of 5,367, or 1.61%.

During the week ended Tuesday, the most-active Apr futures contract set a new swing low of $116.65 per cwt on Wednesday and a swing high of $121.17 on Friday before settling at $120.60 on Tuesday, up from $117.17 the previous Tuesday.  The contract sold off on Thursday and Friday.

 

FUNDS SELL CORN

 

Meanwhile, managed money sold corn futures during the week ended Tuesday, keeping their long-term position relatively flat.  Their new net long corn position Tuesday stood at 56,855 contracts, down 12,246, or 17.7%, from 69,101 the previous week.

Commercial traders’ new net short position Tuesday was 268,901 contracts, up 2,176, or 0.80%, from 271,077 a week before.

The CFTC said managed money arrived at their new net long corn position by adding 21,403 long positions, 9,157 short positions and 1,779 spread positions.  This left them in charge of 12.0% of total long open interest, 15.5% of total short open interest and 15.9% of total spread open interest.

Commercials got to their new short corn position by adding 4,176 long positions and 2,000 short positions, leaving their position representing 25.4% of total long open interest and 42.1% of total short open interest.

 

CATTLE, BEEF RECAP

 

Cash cattle trading took place last week at $119 to $120 per cwt on a live basis, down $1 to up $1 from the previous week.  Dressed-basis trading was reported at $190 per cwt, steady to down $2.

The USDA choice cutout Friday was up $0.59 per cwt at $205.09, while select was up $0.10 at $201.70.  The choice/select spread widened to $3.39 from $2.90 with 64 loads of fabricated product sold into the spot market.

No futures contracts were tendered for delivery Friday against the Feb futures contract.

The CME Feeder Cattle index for the seven days ended Thursday was $142.08 per cwt, up $0.13 from the previous day.  This compares with Friday’s Mar contract settlement of $140.20, down $0.60.