Managed Money, Cattle Producers Cut Positions

Net long and short positions of managed money and cattle producers narrowed again during the week ended Tuesday while the most-active Apr contract struggled.

The Commodity Futures Trading Commission’s weekly Commitments of Traders report showed the net long position of managed money fell for the fourth straight week to 50,784 contracts from 56,603, a decline of 5,819, or 10.3%.

Cattle producers, users and merchants, meanwhile reduced their net short positions by 5,060 contracts, or 5.27%, to 90,941 from 96,001.

The changes take both trader classes to their lowest net positions in more than a year.

Managed money reached its new net long position by increasing its short positions by 2,133 contracts to 17,704 and increasing its long positions by only 412 to 68,488, the CFTC said.  Their new positions leave them representing 28.4% of total long open interest and 7.3% of total short open interest.

Commercial traders covered 3,421 short positions while liquidating 1,575 longs, leaving them representing 52.0% of the total short open interest and 14.3% of total long open interest.

Total live cattle open interest during the latest CFTC reporting week declined 3,548 contracts, or 1.47%, to 238,020 from 241,563 the previous week.

During the same week, the Apr futures contract struggled to a swing high but ran into resistance above $160.00 per cwt.  The week began with the Tuesday, Feb. 10, open of $158.80 and ended with the Tuesday, Feb. 17, close of $158.60.   The contract has since moved lower on further long liquidation.

 

CORN POSITIONS NARROW AS WELL

 

The net positions of large corn traders narrowed as well as managed money and corn commercials alike cut net long positions for the seventh straight week.

Managed money’s net long position fell to 79,983 contracts from 90,269 the previous week for a decline of 10,253, or 11.4%.

At the same time, commercial traders’ overall short positions dipped to 243,352 contracts from 252,783, for a decline of 9,431, or 3.73%.

The CFTC said managed money attained its new position through a combination of liquidating 5,363 long positions and acquiring 4,923 new short positions, in addition to changes in spreads.  The end result left them in control of 16.2% of total long open interest and 10.4% of total short open interest.

Corn commercials, though, covered 8,180 short positions and added 1,251 long positions to attain their new net short position.  This left them representing 25.3% of total long open interest and 43.2% of total short open interest.

During the reporting week, May corn futures were in a sideways trading range.  The contract settled Tuesday, Feb. 17, at $$3.89 ½ a bushel, compared with the open on Tuesday, Feb. 10, or $2.90 ¾.  The contract continued to move sideways toward the end of last week.

Corn open interest during the latest reporting week declined 3,849 contracts, or 1.06%, to 1.359 million from 1.362 million.

 

CATTLE TRADE MIXED

 

Cash cattle markets last week were mixed, with live-basis prices lower and dressed markets higher.  On a live basis, cattle traded at mostly $158 up to $160 per cwt, for a loss of $1 to $2 from the previous week.  Dressed-basis trades were reported at mostly $256 to $258, up $2.

Beef prices continued turning higher seasonally with the USDA’s choice cutout at $240.31 per cwt, up $2.63 on the week and select at $237.79, up $3.84.

The CME Feeder Cattle Index was $210.58, up $0.10 from $210.48 and $11.41 above Friday’s Feb settlement of $156.70.