Managed Money Liquidates Long Cattle Positions

Managed money liquidated long live cattle positions during the week ended Tuesday, keeping their overall position relatively flat over the last month, as the outlook for the cattle market grew more hazy.

The Commodity Futures Trading Commission said in its weekly Commitments of Traders report that managed money, or large fund traders, had reduced their net long position by 3,251 contracts, or 15.3%, to 17,938 from 21,189 during the week ended Tuesday.

At the same time, commercial traders, or those who potentially could make or take delivery, again reduced their net short position to the smallest point in more than a year.  The CFTC pegged their net short position at 56,462 contracts, down 7,737, or 12.1%, from 64,199 the previous week.

The CFTC said managed money arrived at their new net long position by adding 73 long positions and 3,324 short positions while boosting their spread position by 1,460.  This left them representing 24.5% of total long open interest and 17.1% of total short open interest.

Commercial traders added 7,211 new long positions while liquidating 526 short positions to get them to their new net short position.  This left them holding 14.9% of total long open interest and 38.3% of total short open interest.

Total open interest in the latest reporting week rose 12,308 contracts, or 5.38%, to 241,135 contracts from 228,827.

During the latest week, prices for the most-active Oct futures contract declined to a low of $143.37 per cwt from a high the previous Tuesday of $148.45.  The contract since Tuesday has made a new low for the move and bounced.




During the week ended Tuesday, managed money ended its four-week drive to liquidate long corn positions and raised it 8,743 contracts, or 12.3%, to 79,598 from 70,855.  This took these funds’ positions back above that of the “other reportables” that most see as small speculators.

But while managed money reversed themselves and began to get longer, commercial traders did not reverse, continuing a path toward covering short positions.  As of Tuesday, these traders had a net short position of 299,161 contracts, down 25,496, or 7.85%, from 324,657 the previous week.

Total corn open interest during the week fell 78,750 contracts, or 5.72%, to 1.298 million from 1.377 million.

The CFTC said managed money arrived at its new long position by selling 24,021 contracts, covering 32,764 contracts and liquidating 2,611 spread positions.  This left them representing 18.4% of total long open interest and 12.3% of total short open interest.

Commercial traders, meanwhile, bought 303 long positions while covering 256,193 short positions, leaving them controlling 24.5% of total long open interest and 47.6% of total short open interest.

During the latest CFTC reporting week, the most-active Dec corn contract held about steady, although Monday and Tuesday of last week were more volatile.  The contract ended Tuesday at $3.65 ½ a bushel, compared with $2.66 ¼ a week earlier.  In between, it dropped to a low of $3.54 on Monday and a high of $3.75 on Tuesday.




Cash cattle markets were lightly traded last week at $146 to $147 per cwt on a live basis and $228 in Nebraska’s dressed market.  These prices compared with mostly $146 to $147 live and $232 to $234 dressed the previous week.

Traders are looking to the beef market for direction signals, but meat isn’t giving them the cues they seek.  The USDA reported lower boxed beef prices Friday with choice down $0.99 per cwt at $243.22 and select off $0.17 at $232.95.  For the week, choice was down $1.68 and select was $1.93.

The CME Feeder Cattle Index for the seven days ended Thursday was $209.85, down $1.20.  This compares with the Sep settlement Friday of $202.40, up $2.05.