Large commodity index funds, known as managed money, invested heavily in long live cattle positions during the week ended last Tuesday, Jan. 26, while hedgers took the other side and increased their collective net short position.
The information came from the Commodity Futures Trading Commission’s weekly Commitments of Traders report Friday and covers a period when live cattle futures prices jumped sharply.
FUNDS INCREASE NET LONG CATTLE POSITION
As of last Tuesday, managed money had a collective net long position of 66,678 contracts, up 24,290, or 57.3%, from 42,388 a week earlier, and their largest position since Jan. 28, 2020, when it was 67,128 contracts.
At the same time, those hedgers, known as commercial traders because at some point, they either own, or have the ability to own, cattle, boosted their collective net short position to 143,853 contracts. This was up 22,720, or 18.8%, from 121,133 a week earlier and their largest net short position since Feb. 4, 2020, when it was 147,112 contracts.
The CFTC said managed money arrived at their new cattle position by adding 12,632 long positions, covering 11,658 short positions and unwinding 2,480 spread positions. This left them in control of 26.1% of total long open interest, 5.9% of total short open interest and 13.4% of total spread open interest.
Commercial traders reached their position last Tuesday by liquidating 3,118 long positions and adding 19,602 short positions, leaving them with 12.0% of total long open interest and 55.6% of total short open interest.
The CME Group said total live cattle open interest last Tuesday was 330,170 contracts, up 10,415, or 3.26%, from 319,755 a week earlier.
CME Group data also showed that the most-active Apr live cattle contract rose during the week ended last Tuesday to settle at $123.47 per cwt, compared with $119.35 a week earlier.
FUNDS EDGE LONG CORN POSITION HIGHER
As of last Tuesday, managed money had edged their collective net long corn positions higher while commercials boosted their net short position.
The new net long position for managed money was 341,178 contracts, up 5,091, or 1.51%, from 336,087 a week earlier.
Commercials’ new corn position last Tuesday stood at 779,473 contracts, up 17,064, or 2.24%, from 762,409 a week earlier and their largest collective net short position in more than a year.
The CFTC said managed money arrived at its new position by liquidating 3,158 long positions, covering 8,249 short positions and putting on 12,633 spread positions. This left them in charge of 19.3% of total long open interest, 1.6% of total short open interest and 10.9% of total spread open interest.
Commercials got to their new position by adding 18, 575 long positions and 35,639 short positions.
CATTLE, BEEF RECAP
Fed cattle trading was reported last week at $110 to mostly $113 per cwt, up $1 to $2 from the previous week. Dressed-basis trading was seen at $177 to $178 per cwt, up $5.
The USDA cutout Monday was not available. The USDA choice cutout Friday was up $1.96 per cwt at $233.95, while select was up $1.82 at $222.70. The choice/select spread widened to $11.25 from $11.11 with 54 loads of fabricated product and 20 loads of trimmings and grinds sold into the spot market.
The USDA reported Thursday that basis bids for corn from livestock feeding operations in the Southern Plains were unchanged at $1.00 to $1.25 a bushel over the Mar CBOT futures contract, which settled at $5.49 1/4 a bushel, up $0.02 1/4.
The CME Feeder Cattle Index for the seven days ended Friday was $136.43 per cwt, up $0.41. This compares with Monday’s Mar contract settlement of $137.92 per cwt, up $0.20.