Managed Money Boosts Net Long Cattle Position

6-1-15 – Managed money, or large funds, boosted their net long live cattle positions during the week ended Tuesday for the third straight week to their largest net long position since the week ended Dec. 16.

The Commodity Futures Trading Commission made the revelation in its latest Commitments of Traders report Friday, saying that managed money’s new net long position was 91,551 contracts, up 22,122, or 31.9%, from 69,429 the previous week.  The last time managed money had a larger net long position was the week ended Dec. 16 when it was 94,612 contracts.

During the latest reporting week, the most-active Aug futures contract was in a short sideways pattern that was part of a larger uptrend.  The contract closed Tuesday, May 26, at $151.80 per cwt, compared with the close Tuesday, May 19, of $151.97.

However, the major lows in the larger pattern continued to rise, producing the larger uptrend pattern.

The CFTC also said managed money arrived at its new net long position by adding 1,334 long positions and 1,829 short positions.  The new portfolio left them controlling 33.4% of total long positions and 3.9% of open short positions.

Meanwhile, commercial traders, decreased their total net short positions to 139,263 contracts from 141,107 the previous week, a decline of 1,844, or 1.31%.

Commercial traders arrived at this position by adding 2,419 long positions while adding 575 long positions.  This left them representing 7.7% of total long positions and 52.5% of total short positions.

During the week, total live cattle open interest also rose.  The Chicago Mercantile Exchange reported total cattle open interest Tuesday at 310,681 contracts, up 6,602, or 2.17%, from 304,079 the previous week.

 

MANAGED MONEY INCREASES NET SHORT CORN POSITION

 

While managed money was boosting its net long cattle position, they also were increasing their net short position in corn – for the third straight week and for seven of the latest eight weeks.

The CFTC reported that during the latest reporting week, those traders’ net short positions rose to 158,406 contracts from 155,379 the previous week, a 3,027-contract, or 1.95%, move.

Managed money arrived at its new position by adding 7,467 fresh long contracts and 10,494 short positions, the CFTC said.  They also cut their spread trades by 5,032.

The latest week’s trading had commercial traders decreasing their net short positions by 2,613 contracts, or 2.44%, to 104,261 from 106,874 the previous week.

The CFTC said commercials added 7,997 long positions and 5,384 short positions during the week, leaving them representing 23.7% of total long open interest and 31.0% of total short open interest.

During the latest week, the most-active Jul corn contract declined to settle at $3.55 a bushel, down $0.07, or 1.94%, from $3.62 the previous week.  The contract has since found at least a temporary bottom at Thursday’s low of $3.48 ¼ a bushel.

Total corn open interest during the latest week rose 32,876 contracts, or 2.35%, to 1.434 contracts from 1.401 million the previous week.

 

CASH CATTLE MARKETS QUIET

 

Cash cattle traded Friday at $160 per cwt on a live basis, down $1 from the bulk of the previous week’s action.  In Nebraska’s dressed market, cattle traded at $252, down $3 from the bulk of the previous week’s trade.

Beef prices Friday were down sharply with the USDA choice cutout at $254.99 per cwt, down $4.26, and the select cutout at $243.83, off $2.91.  Volume was active with 110 loads of fabricated product sold into the spot market.

The CME Feeder Cattle Index for the  seven days ended Thursday was $222.66 per cwt, up $0.21, closing the gap with the nearby Aug contract.