Managed Money Boosts Net Long Cattle Position

Managed money, or large speculators, increased their net long live cattle futures position during the week ended Tuesday, Oct. 27, for the second straight week.  Yet the gains seemed tepid and left them with a near-neutral net long position.

The Commodity Futures Trading Commission reported Friday that for the week, managed money held a new net long live cattle position of 9,219 contracts, the largest since 10,053 the week ended Oct. 6.  The latest net long position was up 6,432 contracts, or 230.8%, from 2,787 last week.

Commercial traders, or those who theoretically can make or take delivery of a futures contract, added 4,474 contracts, or 20.7%, to their net short positions, to take them to 26,054 from 21,580 last week.

The CFTC said managed money arrived at its new net long position by liquidating 311 long positions and covering 6,743 short positions while adding 1,594 spread positions.  This left them in control of 19.4% of total long open interest and 15.8% of total short open interest.

Commercial traders, arrived at their new net short position by covering 926 long positions and adding 3,548 short positions, to leave them controlling 25.0% of total long open interest and 35.1% of total short open interest.

During the latest reporting week, total live cattle open interest rose 2,488 contracts, or 0.98%, to 257,044 from 254,556 the previous week.

Also during the week, the most-active Dec live cattle futures contract moved sideways to lower as the market tried to fill a gap left on daily charts the previous week.  The effort was only partially successful at filling the gap.  The contract hit a low for the move at $136.55 per cwt on Tuesday before cash markets began to show some strength.

 

MANAGED MONEY ONLY TRIMS CORN POSITION

 

During the latest reporting week, managed money only trimmed its net corn position, dropping 1,014 contracts, or 3.38%, to 29,015 contracts from 30,029, the CFTC said.

Meanwhile, commercial traders added to their net short positions.  The data show that as of Tuesday, these traders had a net short position of 309,436 contracts, up 9,918, or 3.31%, from 299,517 the previous week.

The CFTC report said managed money arrived at its new net long position by liquidating 208 long positions and adding 806 short positions and 6,370 spread positions.  This left them in control of 16.5% of total long open interest and 14.3% of total short open interest.

Commercial traders arrived at their new net short position by liquidating 2,786 long positions while adding 7,133 short positions.  This left them in control of 23.1% of total long open interest and 46.5% of total short open interest.

Total corn open interest rose 3,205 contracts, or 0.24%, during the week to 1.324 million contracts from 1.321 million, according to CME data.

During the latest reporting week, the most active Dec corn contract moved higher to settle Tuesday at $3.30 per bushel, compared with $3.76 ¾ the previous Tuesday.

 

CASH FED CATTLE MARKETS UNSETTLED

 

Cash fed cattle markets in the Plains are unsettled.  Beef business shows signs of holiday demand, yet the beef choice/select spread remains unusually narrow.  Cash action last week at mostly $138 per cwt with some up to $139 was up from $136 to $138 the week before, but traders say the market feels toppy.

Dressed-basis trade was reported at $206 to mostly $208 and up to $210, compared with $206 to $209 last week.

Wholesale beef prices Friday were mixed, with the USDA choice cutout value at $220.04 per cwt, down $0.89 on the day, and its select cutout at $212.07, up $0.52.

The choice/select spread narrowed to $7.97 from $9.38 on Thursday, and there were 64 loads of fabricated product sold into the spot market.

The CME Feeder Cattle Index for the seven days ended Thursday was $193.27 per cwt, up $0.33.  This compares with the Nov settlement Friday of $190.90, down $1.02.