Managed Money Cuts Long Live Cattle Position

As live cattle futures prices fell over the last two weeks, so did managed money’s desire to be net long live cattle futures.

That would be a valid conclusion from looking at a daily bar chart of cattle futures prices and comparing it to the net positions of major players distributed by the Commodity Futures Trading Commission’s weekly Commitments of Traders report Friday.

 

MANAGED MONEY SELLS CATTLE

 

As of Tuesday, when the CFTC stops and starts counting the commitments of traders in futures markets, managed money, a term for large commodity index funds, had a net long cattle position of 57,486 contracts, down 23,469, or 29.0%, from 80,955 a week earlier.  It was their smallest net long position since Jan. 25 when it totaled 45,992 contracts.

Also as of Tuesday, commercial traders, those who own, or will own, the cattle, had a collective net short position of 132,278 contracts, down 19,085, or 12.6%, from 151,363 a week earlier.  It was their smallest net short position since Jan. 25 when it was 125,105 contracts.

The CFTC said managed money arrived at their new live cattle position by liquidating 15,535 long positions, adding 7,934 short positions and putting on 291 spread positions.  This left them in control of 24.1% of total long open interest, 8.0% of total short open interest and 14.2% of total spread open interest.

Commercial traders got to where they were by adding 9,035 long positions and covering 10,050 short positions, leaving them with 14.2% of total long open interest and 51.2% of total short open interest.

The CME Group said total open interest Tuesday was 357,108 contracts, down 3,941, or 1.09%, from 361,049 a week earlier.

CME data also showed that the most-active Apr contract fell during the CFTC reporting week to settle Tuesday at $140.52 per cwt, down from $146.02 a week earlier.

 

FUNDS TRIM LONG CORN POSITION

 

Tuesday, managed money had a net long Chicago corn position of 337,221 contracts, down 7,569, or 2.20%, from 344,790 a week earlier.

At the same time, commercials had a total net short position of 742,441 contracts, up 21,979, or 3.05%, from 720,462 a week earlier.

The CFTC said managed money arrived at their new corn position by liquidating 15,711 long positions, covering 8,142 short positions and unwinding 4,011 spread positions.  This left them holding 24.7% of total long open interest, 2.0% of total short open interest and 7.7% of total spread open interest.

Commercials got to where they were by liquidating 29,206 long positions and covering 7,227 short open interest, leaving them with 21.0% of total long open interest and 71.0% 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 $140.92 to $145.00 per cwt, compared with the previous week’s range of $140.92 to $145.00.  FOB dressed steers and heifers went for $221.90 to $225.95 per cwt, versus $221.90 to $225.95.

The USDA choice cutout Friday was down $0.02 per cwt at $254.33, while select was up $0.62 at $248.41.  The choice/select spread narrowed to $5.92 from $6.56 with 75 loads of fabricated product and 38 loads of trimmings and grinds sold into the spot market.

The USDA reported that basis bids for corn from feeders in the Southern Plains were unchanged at $1.15 to $1.25 a bushel over the May futures and for southwest Kansas were steady at $0.15 over May, which settled at $7.54 1/4, up $0.06 1/2.

The CME Feeder Cattle Index for the seven days ended Thursday was $156.19 per cwt down $1.59.  This compares with Friday’s Mar contract settlement of $153.12 per cwt, down $2.22.