Managed Money Boosts Long Cattle Positions As Futures Rise

Managed money reversed a nine-week liquidation pattern and increased its net long position as futures prices rose during the week ended Tuesday.

The Commodity Futures Trading Commission said for the week ended March 10, managed money, a proxy for large investors, had a net long position of 51,973 contracts, up 1,475, or 2.92%, from 50,498.

At the same time, commercial traders, which includes anyone who producers or handles the cattle, increased their net short positions by 3,244 contracts, or 3.56%, to 94,244 from 91,000 the previous week.

During the week, the Apr futures contract rose to a high of $155.25 per cwt from a low of $150.15.  From settlement to settlement, the contract rose $3.70 per cwt, or 2.45%, to $154.75 from $151.05.

The CFTC said managed money expanded its net long position through a combination of new long buying and short covering.  The report said they bought a net 846 new long positions and covered only 626 shorts.  The rest of their activity was in spread trades.

At the end of the reporting week, managed money controlled 27.7% of open long positions and 6.8% of open short positions.

The CFTC said producers and users sold 1,025 long positions and covered 2,219 short positions during the week, leaving them in control of 12.7% of open long positions and 50.6% of open short positions.

Total open interest during the latest reporting week fell 5,273 contracts, or 2.12%, to 243,159 from 248,432.




For the 10th straight reporting week, managed money liquidated long corn positions, the CFTC said.  As of March 10, these investors held their lowest position in more than a year – net long 14,866 contracts, down 19,535, or 56.8%, from 34,401 the previous week.

During that same week, producers and other users cut net short positions to 236,019 contracts, from 262,494, a decline of 26,475, or 10.1%.  It was the third straight week of declines and the smallest net short position for these traders since the week ended Sep. 23 when it was 232,849.

The CFTC said during the latest reporting week, managed money covered 14,790 short corn positions while liquidating only 4,745 longs.  The rest of their trading was taken up in spread trades.  That left them in control of 15.9% of total long positions and 14.7% of total short positions.

Commercials, covered 12,366 short positions during the week and purchased 14,109 long positions.  This left them holding 22.6% of total long positions and 41.5% of total short positions.

During the latest reporting week, the nearby May corn contract trended higher to a high on March 10 or $3.84 ¼ a bushel from a low of $3.75 ¾.  Settlement to settlement, the May contract rose to $3.83 ¼ from $3.82 on March 3, an increase of $0.01 1/4, or 0.33%.

Total open interest during the latest reporting week was up only slightly to 1.249 million contracts from 1.245 million, a gain of only 0.32%.




Fed cattle trading last week was firm at roughly steady prices of $161 per cwt on a live basis and $256 on a dressed basis.  Volume appeared to be moderate.

Boxed beef prices, however, were lower, with the USDA reporting its choice cutout Friday at $244.12 per cwt, down $1.86 from Thursday.  The select cutout was $244.07, down $1.72.  The choice/select spread narrowed to $0.05.

Those prices were down from a week earlier with choice down $3.34, or 1.34%, from a week earlier and the select cutout down $0.32, or 0.13%.

The CME Feeder Cattle Index for the seven days ended Thursday was $213.62, down $0.31.