Managed Money Goes Long Cattle, Corn

Managed money, or large fund investors, liquidated a net 6,562 live cattle contracts during the week ended last Tuesday to leave themselves net long by only 78,003 contracts, according to the Commodity Futures Trading Commission’s weekly Commitments of Traders report.  This is the lowest net long position for these traders since the week ended April 28, when it was 69,242 contracts.

The CFTC’s weekly Commitments of Traders report usually is released on Friday but was delayed until Monday by observance of the Independence Day holiday Friday.

While managed money was liquidating long positions, commercial traders, those who actually handle the cattle at some point, covered more short positions to end the reporting week with a net 116,277 contracts.  This is 10,044, or 7.95%, fewer than the 126,321 contracts the previous week.

Commercials’ net short position is the smallest since the week ended March 30 when it was 110,811 contracts.

The CFTC said managed money arrived at its new position by liquidating a net 8,018 long positions and covering 1,456 short positions while divesting themselves of 3,514 spread positions.  Their new net position left these funds representing 37.2% of total long positions and 6.1% of total short positions

Commercial traders arrived at their new net short position by liquidating 4,875 long positions and covering a net 14,919 short positions.  Their new positions left them representing 7.0% of total long open interest and 53.4% of total short open interest.

During the latest reporting week, total live cattle open interest fell 24,816 contracts, or 8.98%, to 251,482 from 276,298 the previous week.

Also during that week, the most-active Aug futures contract hit its lowest point of $147.85 per cwt since Aug. 20 when it was $147.75.




Afraid of the effects of too much rain in parts of the central US, large fund managers went from being net short corn to net long.  On a graph, the effect is very dramatic.

During the latest reporting week, managed money ended with a net long position of 40,330 contracts, up 163,298, or 132.8%, from a net short position of 122,968 contracts the previous week.

And during the same reporting week, commercial traders extended their net short positions to 267,880 contracts, an increase of 122,282 contracts, or 84.0%, from 145,598 the previous week.

The CFTC said managed money arrived at its new position by adding 44,411 net long positions and covering 118,887 short positions while liquidating 8,438 spread positions.  The new state of affairs left them representing 19.6% of total open long positions and 16.5% of open short positions.

Commercial traders arrived at their new position by liquidating 60,168 long positions and adding 62,114 short positions.  This left them representing 20.5% of total long open interest and 41.0% of total short open interest.

During the week, total corn open interest declined 117,888 contracts, or 8.26%, to 1.309 million from 1.427 million.

Also that week, the most-active Dec contract shot higher, topping out the  week at $4.15 a bushel from a low of $3.60 ½ the previous Tuesday a gain of $0.54 ½, or 15.1% and ending at its highest level since early January.




Cash cattle markets were quiet Monday, lacking the information needed to give traders a good sense of market direction.  Feedlot showlists were down in all segments of the Plains feeding area, but no bids were reported.  Asking prices were expected near $155 per cwt on a live basis and $245 in Nebraska’s dressed market.

Cattle traded last week at mostly $150 per cwt on a live basis, up from mostly $148 last week.  In Nebraska’s dressed market, cattle traded from $235 up to mostly $240, compared with the bulk of last week’s sales at $237 to $238.

Boxed beef prices were lower Monday, with the USDA reporting its choice cutout value at $247.65 per cwt, down $2.47, and its select cutout at $243.92, off $4.13.

The CME Feeder Cattle Index for the seven days ended Friday 221.81 per cwt, down $1.48 after being down $3.45 on Thursday.  Aug futures settled Monday at $216.97, down $0.47.