Managed Money Buys Cattle, Corn

Large commodity index funds, better known as managed money, lifted their collective net long live cattle futures position in the week ended Tuesday as hedgers nudged their total net short position, according to the weekly Commitments of Traders report from the Commodity Futures Trading Commission Friday.

 

MANAGED MONEY BUYS CATTLE

 

Managed money’s collective live cattle futures position Tuesday totaled 70,509 contracts, up 2,543, or 3.74%, from 67,966 a week earlier.  It was their largest net long position since Feb. 23 when it was 80,955 contracts.

Hedgers, otherwise known as commercial traders because they own, or will own, the cattle represented by the futures market since they theoretically can make or take delivery of a futures contract, had a total net short position Tuesday of 122,111 contracts, up 1,101, or 0.91%, from 121,010 a week earlier.  It was their largest net short position since April 26 when it was 126,255 contracts.

The CFTC said managed money arrived at their net long cattle position by adding 2,349 long positions, covering 194 short positions and unwinding 2,199 spread positions.  This left them with 31.7% of total long open interest, 8.2% of total short open interest and 13.2% of total spread open interest.

Commercials got to where they were by adding 1,155 long positions and 2,256 short positions, leaving them with 10.1% of total long open interest and 50.8% of total short open interest.

The CME Group said cattle open interest Tuesday totaled 299,772 contracts, up 1,120, or 0.38%, from 298,652 a week earlier.

The CME also said the most active live cattle futures contract rose during the week to settle Tuesday at $151.07 per cwt, up from 150.45 a week earlier.

 

FUNDS ALSO BUY CORN

 

Tuesday, managed money had a collective net long corn position of 236,192 contracts, up 8,517, or 3.74%, from 227,675 a week earlier.  It was their largest position since June 21 when it was 241,691 contracts.

Commercials, Tuesday, had a total net short position of 473,189 contracts, up 2,765, or 0.59%, from 470,424 a week earlier.  It was their largest short position since June 28 when it was 537,593 contracts.

The CFTC said managed money arrived at their new position by adding 7,410 long positions, covering 1,107 short positions and putting on 6,583 spread positions.  This left them with 21.5% of total long open interest, 3.8% of total short open interest and 9.3% of total spread open interest.

Commercials got to where they were by adding 7,621 long positions and 10,386 short positions, leaving them with 23.8% of total long open interest and 59.4% of total short open interest.

 

CATTLE, BEEF RECAP

 

The USDA reported formula and contract base prices for live FOB steers and heifers last week ranged from $142.00 to $147.86 per cwt, compared with the previous week’s range of $141.00 to $145.00 FOB dressed steers, and heifers went for $222.00 to $227.22 per cwt, versus $221.34 to $227.23.

The USDA choice cutout Friday was up $0.23 per cwt at $248.63 while select was off $2.80 at $219.31.  The choice/select spread widened to $29.32 from $26.29 with 79 loads of fabricated product and 21 loads of trimmings and grinds sold into the spot market.

The USDA said basis bids for corn from feeders in the Southern Plains were unchanged at $2.65 to $2.80 a bushel over the Dec futures and for southwest Kansas were steady at $1.00 over Dec, which settled at $6.76 3/4, down $0.11 1/2.

The CME Feeder Cattle Index for the seven days ended Thursday was $180.15 per cwt up $0.40.  This compares with Friday’s Sep contract settlement of $178.12, down $0.07, and Oct’s $178.35, up $0.37.