Managed Money Boosts Long Cattle Positions

Managed money, or fund investors, boosted their net long positions in live cattle futures during the week ended Tuesday to 78,490 contracts, the largest since the week ended Jan 13 when it was 81,345.

Fund investment rose 6,508 contracts, or 9.15%, from 71,092 the previous week.  Their net long position dipped a week earlier as commercial traders covered short positions, but a gradual upward trend in fund investment of live cattle resumed Wednesday through Friday.

During the latest reporting week, commercial traders, any that actually handle the cattle, also resumed their expansion of short positions, by moving to 126,091 contracts, up 2,308 from 123,783 the previous week.  The new position also is the largest net short position these traders have had since the week ended Dec. 16 when it was 133,526 contracts.

During the latest CFTC week, the most-active Jun contract rose to a high of $151.57 per cwt on Apr. 24, a nearby peak that was nearly matched by Tuesday’s $151.50 high.  The weekly low came Apr. 22 when it made a near-term cycle low of $145.20.  From there, the contract gapped higher and moved up to the latest peaks.

Total open interest during the week rose to 277,038 contracts, from 271,496, for a gain of 5,542, or 2.04%.

The CFTC said managed money added a net, 6,059 long positions to portfolios while covering 449 short positions.  In the end, they represented 33.2% of total long positions but only 4.9% of total short positions.

At the same time, commercials sold 2,131 long positions and added only 177 shorts, leaving them representing only 9.0% of total long open interest but 54.4% of total short open interest.




Managed money expanded its net short corn position during the week ended Tuesday, the CFTC said.  The total position is only slightly less than the net short position of commercial traders and is the largest net short position in more than a year.

Fund shorts totaled 111,992 contracts as of Tuesday, up 32,255, or 40.5%, from 79,737 the previous week.  These traders added 13,533 long corn positions while taking on 45,788 short positions, leaving them representing 12.0% of total open interest and 21.4% of total short open interest.

Meanwhile, commercials decreased their net short positions 22,619 contracts, or 15.5%, to 122,890 contracts from 145,509 the previous week.  These traders sold 42,745 net long positions while selling 65,364 shorts to leave them representing 22.4% of total long open interest and 31.7% of total short open interest.

During the latest week, corn futures trended lower as weather forecasts improved.  The most-active May contract slipped to a low of $3.59 a bushel on Tuesday from a high of $3.77 a week earlier.

Total open interest during the week declined 50,298 contracts, or 3.67%, to 1.322 million from 1.372 million the previous week.




The USDA reported active cash cattle trade last week at mostly $160 per cwt on a live basis, up about $2 from $158 the previous week.  On a dressed basis, cattle traded at mostly $255 per cwt, also up about $2 from mostly $253.

The USDA’s beef cutout value Friday was lower, taking the weekly change down with it.  The USDA’s choice cutout was $254.64 per cwt, down $2.26 and select at $243.22, down $0.83.  Volume was light, with 75 loads of fabricated product sold into the spot market.

For the week, the choice cutout was down $2.35 from $256.99 while the select cutout was down $4.40.

The CME Feeder Cattle Index for the seven days ended Thursday was $218.00 per cwt, up $0.63 on the day and $4.38 above the Apr settlement of $213.62.7