Managed Money Boosts Cattle Position

4-6-15 – Managed money continued to buy cattle futures in the week ended Tuesday while commercial traders continued to sell, according to the Commodity Futures Trading Commission.

In its latest Commitments of Traders report, the CFTC said the net long live cattle position of managed money, or large speculators, grew 11,904 contracts, or 22.2%, to 65,588 from 53,684 the previous week.

That marked the third straight week in which large speculators upped their net long cattle position, rebounding from a multi-year low during the week ended March 3.  It also is the largest net long position these traders have had since the week ended Jan. 20 when it was 70,319.

The CFTC said managed money boosted long positions by 4,347 contracts while increasing short positions only 1,416.  As of Tuesday, their long positions represented 29.5% of total open interest, but their short positions only represented 6.0%.

During the latest reporting week, commercial traders, those who produce or handle the cattle, increased their net short positions for the second straight week to 110,811 contracts from 105,590, for a gain of 5,221, or 4.94%.  This was the largest net short position of commercial traders since the week ended Jan. 20 when it was 110,015.

The CFTC said commercials increased their short positions by 6,662 contracts and their long positions by 1,441, to leave them representing 52.4% of total short open interest and 12.5% of total long open interest.

During the latest reporting week, total live cattle open interest rose 6,153 contracts, or 2.26%, to 277,989 from 261,836 the week before.

CME data show that the most-active Jun contract leveled in the latest CFTC reporting week as prices ran into resistance at the Feb. 26 spike high of $163.10 per cwt.  The increased interest in hedging by commercial traders at this level may be saying traders are losing confidence in the market’s ability to get above resistance around $163.00.

 

MANAGED MONEY, COMMERCIALS TRIM NET LONG CORN POSITIONS

 

In a rare display of solidarity, managed money and commercial corn traders covered short positions during the latest reporting week, the CFTC said.

Managed money cut its net short position by 14,965 contracts, or 71.5%, to 5,962 from 20,927 the previous week.

Commercials trimmed their short positions by only 577 to 218,699 from 219,276 the week before, the CFTC said.

Specifically, managed money sold a net 10,336 long corn positions but covered 25,301 short positions, leaving them representing 13.6% of total long open interest and 14.0% of total short open interest.

Commercials added 11,294 long corn positions in the week and 10,717 short positions, leaving them representing 23.4% of total long open interest and 39.6% of total short open interest.

During the week, total corn open interest rose 18,787 contracts, or 1.41%, to 1.353 million from 1.334 million, Chicago Mercantile Exchange figures show.

During the CFTC week, May corn tried to break out of its sideways range but failed when the USDA predicted more world corn supplies this year.  The contract returned to its sideways pattern after the report Tuesday.

 

CASH CATTLE TRADE HIGHER

 

Cash cattle markets Friday traded higher, although volume was light.  On a live basis, fed cattle markets ranged from mostly $167 per cwt up to $170, up mostly $2.  On a dressed basis, cattle ranged from 265 to $267, up $3 to $4.

Boxed beef prices were lower Thursday with the USDA’s choice cutout down $0.37 per cwt to $255.57 and select off $1.17 to $249.29.  Volume was light, with only 72 loads of fabricated product sold into the spot market.

The CME Feeder Cattle Index for the seven days ended Wednesday was $219.89 per cwt, up $1.24.