Managed Money Cuts Long Live Cattle Position

1-3-22 – Large commodity investment firms, known as managed money, cut their collective net long live cattle futures commitments in the week ended Tuesday, Dec. 21, while hedgers cut their total net short position.

The data came from the weekly Commitments of Traders report from the Commodity Futures Trading Commission released on Monday, Dec. 27 instead of the previous Friday because of the Christmas Day holiday.

 

FUNDS CUT CATTLE HOLDINGS

 

As of Dec. 21, managed money had a net long live cattle position of 65,326 contracts, down 13,555, or 17.2%, from 78,881 a week earlier.  It was their smallest net long position since Nov. 23 when it was 63,907 contracts.

Hedgers, known as commercial traders since they theoretically could make or take delivery of a futures contract, had a collective net short position on Dec. 21 of 139,106 contracts, down 8,812, or 5.96%, from 147,918 a week earlier.  It was their smallest net short position since Nov. 16 when it was 126,893 contracts.

The CFTC said managed money arrived at their position by liquidating 9,364 long positions, adding 4,191 short positions and putting on 2,037 spread positions.  This left them with 29.0% of total long open interest, 7.5% of total short open interest and 12.2% of total spread open interest.

Commercials got to where they were by liquidating 13 long positions and covering 8,825 short positions, leaving them in charge of 8.4% of total long open interest and 54.3% of total short open interest.

The CME Group said total live cattle open interest was 303,122 contracts, down 5,535, or 1.79%, from 308,657 a week earlier.

CME Group data also showed that the most-active Feb contract declined during the week to settle at $136.92 per cwt, compared with $138.30 a week earlier.

 

FUNDS GET LONGER CORN

 

Managed money had a collective net long corn position of 350,903 contracts, up from 335,472 a week earlier.  It was their largest net long position since Nov. 23 when it was 362,009 contracts.

Commercials had a net short position of 672,005 contracts, up 16,715, or 2.55%, from 655,290 a week earlier.  It was their largest short position since May 18 when it was 676,942 contracts.

The CFTC said managed money arrived at their new position by adding 16,429 long positions, 998 short positions and 3,967 spread positions, leaving them with 25.5% of total long open interest, 1.8% of total short open interest and 8.5% of total spread open interest.

Commercials liquidated 6,229 long positions and added 10,486 short positions; they had 23.8% of long open interest and 69.0% of short open interest.

 

CATTLE, BEEF RECAP

 

The USDA reported formula and contract base prices for live FOB steers and heifers last week ranged from $135.28 to $137.27 per cwt, compared with the previous week’s range of $137.09 to $138.34.  FOB dressed steers and heifers went for $211.86 to $215.04 per cwt, versus $216.25 to $219.76.

The USDA choice cutout Thursday was down $0.45 per cwt at $265.26, while select was up $1.14 at $258.23.  The choice/select spread narrowed to $7.03 from $8.62 with 75 loads of fabricated product and 27 loads of trimmings and grinds sold into the spot market.

The USDA reported Thursday that basis bids for corn from livestock feeding operations in the Southern Plains were unchanged at $1.35 to $1.45 a bushel over the Mar futures and for southwest Kansas were unchanged at $0.40 over Mar, which settled at $5.96 a bushel, down $0.09 1/2.

No delivery intentions were posted against the Dec live cattle contract Friday.

The CME Feeder Cattle Index for the seven days ended Thursday was $165.21 per cwt up $1.66.  This compares with Friday’s Jan contract settlement of $166.87 per cwt, up $0.55.