Managed Money Liquidates More Cattle Futures

Managed money, a proxy for large speculators, liquidated more long positions during the week ended Tuesday, Feb. 10, taking them to the lowest net long position in more than a year, although their activity was fairly slack.

The Commodity Futures Trading commission’s weekly Commitments of Traders Report, which was issued Friday, showed that to attain the new low point in their net long positions, managed money liquidated 2,235 long positions and added 1,863 short positions to their portfolios.  This left them controlling 28.6% of the total number of long positions open.

As of Tuesday, managed money had a net long position of 52,505 contracts, down 4,098, or 7.24%, from 56,603 a week earlier.  It also was the fifth straight week of declining net long positions.

At the same time, producers and others who actually touch the 92,787 contracts from 96,001 a week ago, a decline of 3,214, or 3.35%.  This brought them to the smallest net short position in more than a year.

During the latest reporting week, the most-active Apr contract broke out of a sideways pattern to gap higher on Monday.  The contract has continued to move higher cautiously since then.  The contract ended Tuesday, Feb. 10, at $159.10 but began the reporting week at the previous Tuesday’s close of $153.75.

Total live cattle open interest for the week fell 12,202 contracts, or 4.84%, to 238,020 from 250,122 the previous week amid the liquidation pressure.




Managed money also liquidated corn futures contracts during the latest reporting week, moving to a net long position of 90,269 contracts from 96,350 the previous week, a decline of 6,081, or 6.31%, from a week ago and the lowest since the week ended Oct. 14, when it was 84,165.

It also was the fifth straight week of declines in managed money’s net long position.

During the same reporting week, producers reduced their net short positions marginally, dropping 7,205 contracts, or 2.77%, to 252,783 from 259,988.  This is the lowest net short position for producers since the week ended Sep. 30 when it was 242,860.

A breakdown of commitments from the CFTC showed that increased their long positions by 17,982 and their short positions by 10,777, leaving them in control of 25.3% of total long open positions and 43.9% of short positions.

During the CFTC week, the Mar corn contract basically moved in a sideways channel after a sharp jump on Tuesday, Feb. 3., to $3.85 ¾ a bushel.  From there, the contract closed Tuesday, Feb. 10, at $3.88.

Open interest during the period increased 5,739 contracts, or 0.42%, to 1.359 contracts from 1.353.

Cash cattle traded last week at $161 to $162 per cwt on a live basis and at $262 on a dressed basis in Nebraska.  However, action was reported to be light as buyers hung around so long toward the holiday weekend that sellers got tired and went home.  More could have been done later, but it wasn’t reported.

The USDA’s boxed beef market Monday was up $0.54 per cwt at $238.22, but the select was down $0.91 at $233.04.  For the week, choice was down only $0.26 while select was up $0.74.

Volume was good, with 133 fabricated loads moving into the spot market.

The CME Feeder Cattle Index for the seven days ended Thursday was $211.18 per cwt, up $0.25 from the previous day.  The Index continues to hold a sharp premium to the nearby Mar futures contract, which settled Friday at $203.85, up $3.55.