Managed Money Liquidates Cattle Positions

Managed money, or large speculators, liquidated almost all of their net long live cattle futures position during the week ended Tuesday Oct. 15 even though futures were rising sharply.

The Commodity Futures Trading Commission said in its weekly Commitments of Traders report that managed money Tuesday had only 1,209 net long live cattle futures positions, the lowest in more than a year and down 8,844 contracts, or 88.0%, from 10,053 the previous week.

Commercial traders cut their net short position to its lowest point in more than a year, going to 23,009 contracts from 34,784 the previous week, a decline of 11,775, or 33.9%.  Commercials are traders who potentially could make or take delivery of a futures contract.

Total open interest during the latest reporting week rose slightly, moving to 260,430 contracts from 259,932, a gain of 498, or 0.19%.

Broken down, the CFTC said managed money arrived at its new net long cattle position by liquidating 2,469 long positions and adding 6,375 short positions and 1,589 spread positions.  This left them holding 20.4% of total long open interest and 19.9% of total short open interest.

Commercials arrived at their new net short position by adding 2,832 long positions and covering 8,943 short positions, leaving them in control of 25.5% of total long open interest and 34.3% of total short open interest.

However, despite speculators getting less long and commercials covering shorts, prices for live cattle contracts rose sharply during the latest CFTC week.  The CME reported that the most-active Dec live cattle futures contract rose to close Tuesday, Oct. 13, at $132.42 per cwt from its close the previous week of $125.12, a gain of $7.30, or 5.83%.

 

MANAGED MONEY CUTS CORN LONGS

 

During the same reporting week, managed money cut its net long corn futures position by 25,771 contracts, or 21.9%, to 91,707 from 117,478.

Commercial traders, however, cut their net short position during the week by 21,198 contracts, or 5.89%, to 338,451 from 359,649.

The CFTC said large speculators arrived at their new net long corn positon by liquidating 22,330 contracts, covering 3,441 short positions and adding 10,563 spread positions.  This left them representing 18.3% of total long open interest and 11.2% of total short open interest.

Commercial traders arrived at their new position by liquidating 2,474 long positions and covering 23,572 short positions to leave them controlling 22.6% of total long open interest and 48.8% of total short open interest.

Total open interest during the week declined 16,665 contracts, or 1.27%, to 1.291 million from 1.307 million the previous week.

The most-active Dec futures corn contract dropped $0.13 ¾ a bushel, or 3.45%, during the latest reporting week to close at $3.84 ½ a bushel from $3.98 ¼.

 

CASH FED CATTLE ACTIVE

 

Cash fed cattle markets last week traded on Friday after the futures market closed.  Prices were mostly $134 to $136 per cwt on a live basis, well up from $123 to mostly $126 to $127 the previous week.  On a dressed basis, cattle traded in a range from $205 per cwt to $214.50.

Once trading got going on Friday, the action was said to be active.

Wholesale beef prices Friday continued to lose momentum although prices were well above the previous week.  The USDA reported its choice cutout value at $211.69 per cwt, up $0.47 on the day, and its select cutout at $206.36, down $0.87.

The choice/select spread widened to $5.33 from $3.99 on Thursday, and there were 92 loads of fabricated product moved into the spot market.

CME Feeder Cattle Index for the seven days ended Thursday was $188.01 per cwt, up $0.65.  This compares with the Oct settlement Friday of $193.80, up $1.02.