Managed Money Cuts Net Long Cattle Positions

Managed money funds cut their net long positions in live cattle futures during the week ended Tuesday to 84,565 contracts, taking them to their lowest position since the week ended May 5 when it was 79,351.

At the same time, commercial traders, those who handle the actual cattle at some point, covered a net 7,389 short positions to land them at their lowest net short position in two months.

The Commodity Futures Trading Commission made the information known in its weekly Commitments of Traders report, which was released Friday.

During the latest reporting week, the most-active Aug live cattle futures contract slipped from its high of $151.80 per cwt on Tuesday, June 16, to a low of $149.30 on Thursday, June 18.  This low was tested on Friday with a low of $149.35 before shooting up to a high or $152.25 on Tuesday, June 23.  The contract has since fallen away to a low of $147.85 on Thursday.

Managed money, whittled away on its net long cattle position by cutting it to 84,565 contracts from 87,966 the previous week, a dip of 3,401, or 3.87%.  Commercials, on the other hand, trimmed their net short position to 126,321 contracts from 133,710, a dip of 5.53%.

Total open interest during the latest week fell 12,793 contracts, or 4.43%, to 276,298 from 289,091.

The CFTC reported that managed money arrived at its new, lower net long position by liquidating a net 1,944 long  positions, adding 1,457 short positions and cutting 2,886 spread positions.

Commercials arrived at their new net short position by liquidating 1,187 long positions but covering 8,576 short positions.




Meanwhile, managed money cut its net short position in corn to 122,968 contracts by 28,299 contracts, or 18.7%, from 151,267 the previous week.

At the same time, commercial traders, swapped positions with managed money by extending their net short position to 145,598 contracts from 108,564 the previous week.  This was an increase of 37,034 contracts, or 34.1%.

During the CFTC reporting week, the most-active Jul corn contract set a nearby low of $3.35 ½ per bushel on Wednesday, June 17, before beginning a sharp rise that lasted through last week on fund short covering and speculative long positioning.

Also during the latest reporting week, total open interest declined 29,791 contracts, or 2.04%, to 1.427 million from 1.457 million.

The CFTC said managed money arrived at its new position by liquidating 6,984 long positions and covering 35,283 short positions while cutting spread positions by 7,569.  This left their long positions representing 14.9% of total long open interest and 23.5% of open short positions.

Commercials arrived at their new position by selling 15,036 long positions and extending their net short positions by 21,998.




Cash cattle markets last week were steady to $2 per cwt lower than the previous week with cattle trading in the Plains at mostly $148 on a live basis and $237 to $240 on a dressed basis.  Trading was moderately active and was thought to have been sufficient to clear feedlot showlists.

Feedlot showlists this week could be about steady with last week, which could be somewhat supportive to prices since packer buyers will be seeking to cover a full week’s worth of production.

Boxed beef prices, however, were down Friday, with the USDA reporting its choice cutout value at $253.12 per cwt, down $2.04, and its select cutout at $248.15, down $1.98.

Volume Friday was light, with only 72 loads of fabricated product being sold into the spot market.

The CME Feeder Cattle Index for the seven days ended Thursday was $230.18 per cwt, down $1.12.  This compares with Friday’s settlement of the Aug contract at $217.25 per cwt, down $1.80.