Managed Money Nudges Cattle Position Higher

Managed money, or large fund speculators, increased their net long live cattle positions during the week ended Tuesday as commercial traders grew their net short level more substantially.

The Commodity Futures Trading Commission Friday said that for the week ended Tuesday managed money raised its net long cattle position to 19,820 contracts from 18,387 the previous week, a gain of 1,433, or 7.79%.

Commercial traders, or those who can take or make delivery, increased their net short positions during the week to 66,351 contracts from 61,248, a gain of 5,103, or 8.33%.

During the latest reporting week, the most-active Oct cattle contract rose to a cycle high of $150.85 per cwt on Monday from a low of $148.00.  The contract since has fallen away and threatens to close a gap on daily charts opened Monday, Aug. 3, at $146.52.

Also, total open interest fell 13,097 contracts, or 5.40%, to 229,240 from 242,337.

The CFTC said managed money arrived at its new net long position by liquidating 529 long positions while covering 1,982 short positions and adding 150 spreads during the latest week.  This left them representing 25.5% of total long open interest and 16.9% of total short open interest.

Commercial traders arrived at their new positions by liquidating 7,066 long contracts and covering 1,963 short positions, the CFTC said.  This left them representing 12.9% of total long open interest and 41.9% of total short open interest.




During the same CFTC reporting week, managed money continued to dump long corn positions.  These funds cut their net long position to 92,153 contract from 150,187, a drop of 58,034 contracts, or 38.6%.

Since the latest peak in net long corn positions a month ago, managed money has dropped their net long positions by 155,638, or 62.8%.

During the latest week, total corn open interest rose 2,488 contracts or 1.6%, to 1.391 million from 1.369 million, the CME Group said.

The CFTC said managed money arrived at its new net long position by selling 8,854 corn contracts while adding 49,180 and liquidating 10,181 spread positions.  The new arrangement left them representing 18.8% of total long open interest and 12.1% of total short open interest.

The CFTC also said that commercial corn traders had a net short position of 356,994 contracts as of Tuesday, down 23,375, or 6.15%, from 380,369 the previous week.  From their latest peak in short positions the week ended July 21, these traders’ positions have dropped 94,218 contracts, or 20.9%, from 451,212.

Commercials arrived at their new net short position by adding 13,155 long positions and covering 10,270 shorts, leaving them representing 21.4% of total long open interest and 47.1% of total short open interest.

During the latest week, the most-active Dec futures contract broke out of a short sideways trading pattern to shoot to its latest peak of $3.91 ½ a bushel on Monday, Aug. 11, from a low the previous week of $3.66 ¾.  The contract then began to drop and fell sharply on Wednesday after the USDA’s latest monthly crop report showed a higher-than-expected yield potential in this year’s crop.




Cash cattle markets last week traded very lightly with cattle in Texas selling at $148 per cwt on a live basis, down about $2 from the previous week.  On a dressed basis, cattle sold at $240, up $2 to $4.

The USDA reported mixed boxed beef prices again Friday with choice down $0.37 per cwt at $244.72 and select up $0.31 at $235.44.  For the week, choice gained $8.38 while select rose $5.30.  Volume Friday was light with 79 loads of fabricated cuts sold into the spot market.

The CME Feeder Cattle Index for the seven days ended Thursday was $216.71 per cwt, up $0.02, compared with Friday’s Aug futures contract settlement of $213.90, down $0.12.