Large commodity index funds, called managed money, continued to sell live cattle futures during the week ended last Tuesday as hedgers covered short positions, data from the Commodity Futures Trading Commission showed.
FUNDS GET SHORTER CATTLE
The weekly Commitments of Traders report Friday showed managed money last Tuesday with a collective net long cattle position of 50,243 contracts, down 445, or 0.88%, from 50,688 a week earlier. It was their fourth straight week of selling and took them to their smallest net position since June 1 when it was 47,440 contracts.
Commercial traders, those who own the cattle at some point and approach the market primarily as hedgers, had a smaller collective net short position last Tuesday than a week earlier. The CFTC reported them short by 140,183 contracts, down 4,186, or 2.90%, from 144,369 a week earlier and their smallest net short position since May 4 when it was 137,815 contracts.
The CFTC said managed money arrived at their new net long cattle position by adding 1,993 long positions, 2,438 short positions and 790 spread positions. This left their net long position representing 25.9% of total long open interest, 9.3% of total short open interest and 11.4% of spread open interest.
Commercials came to their new net short position by adding 1,903 long positions and covering 2,283 short positions, leaving them in charge of 8.5% of total long open interest and 54.8% of total short open interest.
The CME Group said live cattle open interest last Tuesday was 302,460 contracts, up 5,272, or 1.77%, from 297,188 a week earlier.
The most-active Oct cattle contract declined during the CFTC reporting week to settle last Tuesday at $124.70 per cwt, compared with $127.17.
FUNDS BUY CORN
Managed money last Tuesday had a net long corn position of 218,563 contracts, up 13,675, or 6.67%, from 204,888 a week earlier. The reversal halted a six-week downward trend in managed money’s net long position.
Also reversing a six-week downtrend in their collective net short position were commercial traders. These traders were short last Tuesday by 527,464 contracts, up 1,261, or 0.24%, from 526,203 a week earlier.
Managed money got to their new position by adding 12,023 long positions, covering 1,652 short positions and unwinding 15,466 spread positions. This left them with 17.5% of total long open interest, 2.7% of total short open interest and 11.1% of total spread open interest.
Commercials got to where they were by liquidating 989 long positions and adding 272 short positions, leaving them in charge of 27.0% of total long open interest and 62.7% of total short open interest.
CATTLE, BEEF RECAP
Fed cattle traded last week at $118 to $122 per cwt on a live basis, down $1 to $3 from the previous week. Dressed-basis trade was at $195 to $197, down $1 to $4.
The USDA choice cutout Monday was up $1.30 per cwt at $267.93, while select was up $0.98 at $250.92. The choice/select spread widened to $17.00 from $16.69 with 88 loads of fabricated product and 19 loads of trimmings and grinds sold into the spot market.
The USDA reported Monday that basis bids for corn from livestock feeding operations in the Southern Plains were unchanged at $1.86 to $1.91 a bushel over the Sep futures and for southwest Kansas were unchanged at $0.70 over Sep, which settled at $5.49 3/4 a bushel, up $0.02 1/2.
The CME Feeder Cattle Index for the seven days ended Thursday was $153.85 per cwt up $1.82. This compares with Monday’s Aug contract settlement of $163.30 per cwt, up $2.12.