Funds Trim Net Long Live Cattle Position

Commodity investment funds, called managed money, reduced their net long live cattle position during the week ended Tuesday, ending a six-week string of gains that took them to their largest net long position in more than a year.

Those who handle the cattle, called commercials, covered a small portion of their net short positions in the same week, ending a five-week-long extension of their net short position.

Managed money’s net long position for the week ended Tuesday was 42,384 contracts, according to the Commodity Futures Trading Commission’s weekly Commitments-of-Traders report Friday.  This was down 491, or 1.15%, from 42,875 the previous week.

The net short position of commercials during the latest CFTC reporting week declined 2,267 contracts, or 3.00%, to 73,365 from 75,632.

Managed money arrived at its new net long cattle position by adding 1,010 long positions and 1,501 short positions while expanding their spread positions by 3,426.  This left them representing 29.1% of total long open interest and 11.5% of total short open interest.

Commercials got to their new positions by liquidating 288 long positions and covering 2,555 short positions to leave them in control of 14.0% of total long open interest and 44.4% of total short open interest.

The CME Group reported that total live cattle open interest rose 1,493 contracts, or 0.62%, during the week to 241,294 from 239,801.

The CME Group also said prices for the most-active Oct live cattle contract declined during the week to close at $113.40 per cwt, a decline of $1.60, or 1.39%, from a close of $115 the previous week.  The contract has since continued down, finishing Friday at $110.25, its lowest point since July 22 when it was $108.07.

 

FUNDS CONTINUE SELLING CORN

 

During the same CFTC reporting week, managed money sold corn futures to take on an even shorter net position.  As of Tuesday, they were net short by 165,109 contracts, down 23,614, or 16.7%, from 141,495 the week before and the ninth straight week of declines.

That put them at their largest net short position since the week ended April 12 when it was 146,384.

Commercials, reduced their net short position by 6,091 contracts, or 3.26%, during the week to 181,017 from 187,108, for the ninth straight week, taking them to their smallest net short position since the week ended April 12 when it was 176,940.

Managed money arrived at its new net short corn position by adding 6,696 long positions and 30,310 short positions while unwinding 12,535 spread positions, the CFTC said.  This left them representing 11.4% of total long open interest and 23.3% of total short open interest.

Commercials got to their new position by liquidating 2,102 long positions and 8,193 short positions, leaving them in control of 26.9% of total long open interest and 40.0% of total short open interest.

Total corn open interest for the week rose 19,020 contracts, or 1.40%, to 1.380 million from 1.361 million, the CME Group said.

During the CFTC week, the most-active Dec corn contract set a new contract low of $3.22 ½ a bushel on Friday before closing at $3.37 ¼ on Tuesday.  It has since continued to rise.

 

CASH CATTLE MARKETS QUIET

 

Cash cattle markets Friday were quiet after trading Wednesday at $118 per cwt on a live basis and at $185 to $187 dressed.

The USDA’s choice cutout Friday was $0.79 per cwt lower at $200.07, while select was off $0.53 at $193.60.  The choice/select spread narrowed to $6.47 from $6.73 with 86 loads of fabricated product sold into the spot market.

The CME Feeder Cattle Index for the seven days ended Thursday was $148.07 per cwt, down $0.25.  This compares with the Aug settlement Friday of $146.07, up $1.05.