Managed Money liquidated long positions aggressively during the week ended Tuesday, taking them to their lowest net position since the week ended Tuesday, March 17, and were said to be a significant factor in the futures market slide.
The Commodity Futures Trading Commission said in its weekly Commitments of Traders report Friday that those large funds had a net long position of 53,831 live cattle contracts, compared with the March 17 low of 53,684. They reduced their long exposure to live cattle futures by 20,522 contracts, or 27.6%, from 74,353.
The CFTC said funds arrived at their new net long position by selling 17,662 long contracts and acquiring 2,860 short positions while cutting 2,791 spread positions. This left them representing 30.5% of total long open interest and 7.7% of total short open interest.
Total open interest during the latest reporting week fell 13,225 contracts, or 5.32%, to 235,337 from 248,562.
The most-active Aug futures contract fell during the week to a low of $146.10 per cwt on Tuesday from a high the previous Tuesday of $151.40, a 3.50% drop. It has since fallen to a new low for the move.
During the latest reporting week, commercial traders, those who can make or take delivery of cattle, continued to cut short positions, taking them the their smallest net short position since the week ended March 17. The CFTC said these traders had a net short position of 96,821 contracts, compared with the March total of 94,021.
During the latest week, commercial traders cut their net short positions by 13,481 contracts, or 12.2%, from 110,302.
The CFTC said commercials arrived at their new net position by adding 3,762 long positions and cutting 9,719 short positions, leaving them representing 9.2% of total long open interest and 50.4% of total short open interest.
FUNDS, COMMERCIALS WIDEN CORN POSITION DIFFERENCE
Meanwhile during the week, large funds and commercial traders continued to widen their position difference taking both to their largest net long or short position since mid- to late January.
Managed money’s net long position expanded 26,403 contracts, or 17.7%, to 175,295 from 148,892 the previous week.
They arrived at their new position by liquidating 3,893 long positions and covering 30,296 short positions while adding 1,684 spreads. This left them representing 19.7% of total long open interest and 6.7% of total short open interest.
Commercials lengthened their net short positions during the latest week by 52,455 contracts, or 15.1%, to 398,959 contracts from 346,504. They arrived at their new positions by adding 14,676 new long positions and 67,131 new short positions. This left them representing 19.8% of total long open interest and 49.4% of total short open interest.
Total corn open interest during the latest reporting week, rose 25,586 contracts, or 1.93%, to 1.349 million from 1.323 million, the CME Group said.
The most-active Dec corn contract rose during the week to a contract high of $4.43 l/4 from the previous Tuesday’s low of $4.07 ¾, an 8.71% low-to-high increase. The contract since has fallen.
CASH CATTLE DIP $2
Cash fed cattle prices last week fell about $2 per cwt to mostly $148 on a live basis. While cattle in dressed-basis markets sold for $234 to $236, down $2 to $4. Trading was thought to be moderately active.
Cattle futures slid last week as traders lost confidence in the beef market. On Friday, the USDA’s beef cutout value was lower, with the choice product at $233.30 per cwt, down $0.65 on the day but down $3.68, or 1.55%, from $236.98 the week before. Select was reported at $229.39, down $1.43 on the day and $4.60 for the week.
The CME Feeder Cattle Index for the seven days ended Thursday was $223.08 per cwt, up $0.11.