Managed Money Net Long Positions Lowest Since January

Managed money continued to liquidate live cattle futures in the week ended Tuesday and now has a net long position of 99,581 contracts, the lowest since the week ended Jan. 7 when it was 99,425.

In its weekly report, the Commodity Futures Trading Commission also reported that producers continued to cover short positions during the week and had 154,084 contracts by Tuesday.  This is the lowest since the week ended July 1 when they were short 153,213 contracts.

During the reporting week, Oct live cattle futures were rising after hitting chart support near the July 11 low of $146.57 per cwt.  However, the market had difficulty sustaining the rally, falling away on Wednesday and turning in an inside day on Thursday, only to rise again on Friday and close at the high of the day.

During the latest CFTC reporting week, total live cattle open interest declined 6,954 contracts, or 2.20%, to 309,294 from 316,248.

The tendency for managed money to liquidate long cattle positions likely is linked to a general move in this direction for all commodities.  The CRB Index moved lower for the eighth straight week last week, reflecting a general decline in bullish sentiment because of poor performance and bearish outlooks.

Tight supplies are supporting the outlook for feeder cattle markets, but consumer push-back against high beef prices is causing many to rethink projections for ever-higher live cattle futures prices.

And, with record harvests of corn and soybeans in the offing, it appears that traders feel exportable supplies of many products could become burdensome around the world.




During the latest week, managed money also cut its net long position in corn futures, trimming it to 81,791 contracts from 84,054 the week before and the lowest it has been since the week ended Feb. 18 when it was 57,823.

Corn producers extended their net short positions during the week ended Tuesday to 239,186 contracts from 230,189 the week before, the CFTC said.  This was the largest net short position for producers since the week ended July 8 when it was 253,952 contracts.

During the CFTC’s reporting week, the Dec corn contract moved sideways to slightly higher, consolidating until more is known about the harvest.  Early reports from the south and Delta show very strong yields, and crop condition reports indicate record yields in the Corn and Soybean Belt.

Open interest during the week fell to 1.32 million contracts from 1.34 million, a 2.26% decline.




The monthly USDA Cattle-On-Feed report showed more cattle were placed on feed during the month than were expected, even though it was a record low placement number at 92.6% of a year earlier.  The futures market also shot higher during the day Friday before the report, on reports of cash strength.

The record-low placements left the number on feed at the lowest level since 2009.

However, slack marketings and younger placements in previous months left more cattle on feed for 120 days or longer than a year ago and the five-year average.




The USDA reported continued softness in boxed beef prices on Friday, with the choice cutout off $0.69 per cwt at $249.77, and select down $1.16 at $239.66.

For the week, choice was down $5.77, or 2.26%, while select was off $8.72, or 3.51%.

Friday, 110 fabricated loads were sold into the spot market, and the choice/select spread continued to widen, ending at $10.10.

The CME Feeder Cattle Index for the seven days ended Thursday was $218.18 per cwt, down $0.09, compared with Friday’s Aug futures settlement of $216.10, up $0.90.