Managed funds continued to liquidate long live cattle positions during the week ended Tuesday amid ideas of waning beef demand.
The Commodity Futures Trading Commission said in its weekly report published Friday that Managed Money, or large speculative firms cut their net long cattle position by 11,242 contracts, or 28.8%, to 27,843 from 39,085 the week before. It was the seventh straight week of declines.
At the same time, commercial traders, those who could make or take delivery of the cattle, reduced their net short position to 71,267 contracts, a dip of 13,183, or 15.6%. It also was the seventh straight week of declines.
During the latest reporting week, total live cattle open interest grew 3,155 contracts, or 1.33%, to 238,043 from 241,198.
The CFTC said managed funds arrived at their new positions by adding 131 long positions and 11,373 short while liquidating 1,213 spread positions. This left them representing 27.0% of total long open interest and 15.4% of total short open interest.
Commercials arrived at their new net short position by adding 5,362 long positions and covering 7,821 short positions. This left them representing 12.8% of total long open interest and 42.3% of total short open interest.
During the latest CFTC week, the most-active Oct live cattle contract fell to a low on Tuesday of $143.40 per cwt from a high the previous Wednesday of $146.27. This continued a decline begun June 11 that has been interrupted twice by short-lived rally attempts, and the market since bottoming has been in a third rally attempt.
MANAGED MONEY CUTS CORN NET LONG POSITION
Managed money cut its net long corn position in the latest week, reversing a steep trend toward increased market exposure as Midwest weather improved. The CFTC reported these funds’ net long position at 230,374 contracts, down 17,417, or 7.03%, from 247,791.
It was the first decline in large investor net long corn positions in six weeks. The previous five weeks saw managed money go from being net short 151,267 contracts to being net long last week’s 247,791 contracts.
Meanwhile, commercial traders reversed their net short futures position by 18,261 contracts, or 4.05%, to 432,951 from 451,212.
The CFTC said managed money arrived at its new trading position by liquidating 21,419 long corn positions and covering 4,002 short positions while cutting spread positions 3,522. This left them representing 21.4% of total long open interest and 4.3% of total short open interest.
Commercials arrived at their new position adding 5,126 long positions and covering 13,135 short positions, leaving them representing 19.7% of total long open interest and 51.8% of total short open interest.
Total open interest for the week declined 35,325, or 2.55%, to 1.350 million contracts from 1,386 million.
During the CFTC week, the most-active Dec corn futures contract was in the middle of a steep decline that left a gap on daily trading charts. The contract fell to a low last Tuesday of $3.70 a bushel from a high the previous week of $4.10 ¼.
CASH CATTLE MARKET QUIET
Cash cattle markets finally traded Friday afternoon. Prices were higher at mostly $147 to $148 per cwt on a live basis with a few up to $149 in western Nebraska, steady to up $2. On a dressed basis, cattle traded at $232 to $234, up $2. However, the volume of trade remains unclear.
The USDA’s beef cutout values Friday were slightly lower for the day but higher for the week, with the choice cutout at $233.25 per cwt, down $0.09 and select at $229.29, off $0.03. Volume was light with 70 loads of fabricated cuts being sold into the spot market.
The CME Feeder Cattle Index for the seven days ended Thursday was $215.95 per cwt, up $0.17 from $215.78, compared with the Aug settlement Friday of $210.72, down $0.50.