Managed Money Liquidates More Cattle Contracts

Managed money liquidated more long live cattle positions during the week ended Tuesday, Dec. 23, and reached its lowest net long position in more than a year.  At the same time, producers covered short positions and reached their lowest net long position in more than a year.

The Commodity Futures Trading commission Tuesday released its Commitments Of Traders report for that week.  It was delayed from its usual Friday release by observance of the Christmas holiday.

During the reporting week, managed money, a proxy for large speculators, lowered its net long position 15,873 contracts, or 16.8%, to 78,739 from 94,612 the previous week.

Producers, meanwhile, largely took the other side reducing their net short position by 10,645 contracts, or 7.97%, to 122,881 from 133,526 the previous week.

During the reporting week, total live cattle open interest declined 21,601 contracts, or 7.46%, to 268,008 from 289,609.

Also during that week, the most-active Feb live cattle futures contract dropped to its cycle low of $155.97 per cwt Wednesday and Thursday to set a double bottom on western charts.  It then rebounded to Tuesday’s double-top high of $162.10 on Wednesday, Dec. 24.

That was violated on Friday, setting the stage for active buying to this week’s top of $167.25 set on Monday.




During the latest reporting week, managed money upped its net long position to a seven-month high at 233,725 contracts, compared with 263,883 for the week ended May 21, a seven-month high.

It also was the third straight week of rising net long positions, gaining 11,907 contracts, or 5.37%, from 221,818 the previous week.

Corn producers continued to hedge their cash positions during the reporting week, expanding their net short position to 415,408 contracts from 409,475 the previous week, a gain of 5,933, or 1.45%.  This also lifted their net short position to its largest since the week ended May 13, for a 7 ½-month high.

During the week, total corn open interest fell 21,601 contracts, or 7.46%, to 268,008 contracts from 289,609.

While managed money and producers were swapping positions, the most-active Mar corn contract was edging its way higher, going from a low on Tuesday, Dec. 16, of $4.04 a bushel to a high on Dec. 23 of $4.15 3/4.




Cash cattle markets Tuesday remained quiet with no trading reported.  Packer buyers were bidding $162 per cwt on a live basis in Kansas and around $260 in Nebraska’s dressed-basis market.

However, feedlots were asking $166 to $167 on a live basis and about $265 in Nebraska.

Cattle traded last week at mostly $162 to $164 live and $253 to $258 on a dressed basis.  Sources said they expect this week’s cash markets to be steady to a little higher as packer buyers are again buying for a full kill week and feedlot showlists are about even with last week.

More ideas of higher cash cattle prices come from a stronger wholesale beef market.  The USDA reported Tuesday that its choice boxed beef cutout value was $247.20 per cwt, up $1.53 and its sixth straight day of increases.

The USDA’s select cutout Tuesday was $236.74 per cwt, up $0.23, and its sixth day of gains.

Spot-market volume Tuesday was moderate at 103 fabricated loads.

Feeder cattle futures and cash markets came more into line Tuesday with the CME Feeder Cattle Index up $3.07 per cwt and the nearby Jan contract settling at $218.32.