Managed Money, Producers Reverse Position Directions

Managed money and cattle producers reversed the direction of their futures market positions during the week ended Tuesday, Dec. 30, with large speculators adding to their net long position and producers adding to their net short positions.

The Commodity Futures Trading Commission’s weekly Commitments of Traders report showed managed money raising its net long position to 81,932 contracts from 73,414, an 11.6% increase from the previous week’s lowest position in more than a year.

A breakdown of trader positions showed that managed money lengthened their net long position by covering 2,040 short positions and adding 1,253 longs.  Their long positions now account for 33.7% of the total live cattle open interest, while their short positions account for only 3.00% of open interest.

Cattle producers moved away from the lowest net short position they have held in more than a year during the latest reporting week, moving to a net short position of 126,090 contracts from 122,881 the previous week, an increase of 2.61%.

Producer positions were attained exclusively by increasing their net short positions, the CFTC reported.  Producer short positions rose 3,351 contracts while long positions rose only 142 contracts.

Producer short positions for the reporting week accounted for 56.8% of total open interest, the CFTC said.

During the reporting week, total live cattle open interest declined 1,492 contracts to 266,516 from 268,008, a 0.56%.  The nearby Feb contract rose sharply, going to a Dec. 30 high of $167.17 per cwt from a Dec. 23 low of $160.10




In contrast to lengthening its long position in live cattle, managed money pared its net long corn position slightly during the latest CFTC reporting week.  The net long position of these traders declined 34,654 contracts, or 13.0%, to 231,298 from 265,952 the previous week.

The CFTC breakdown of positions shows that large speculators increased their total short positions by 3,762 contracts while boosting their long positions by only 1,335.  Managed money long positions accounted for 24.2% of total open interest, while their short positions totaled only 5.4% of total open interest.

Producers, meanwhile, increased their net short positions by 9,393 contracts, or 2.26%, to 424,801 from 415,408 the week before. This is the largest net short position for producers since the week ended May 13 when it was 437,144 contracts.

Broken down, producers expanded their short positions by 18,366 contracts while expanding their long positions just 8,973 contracts.

During the reporting week, the nearby Mar corn futures contract moved slightly higher, only to be cut down on Tuesday, Dec. 30.  Tuesday closed at $4.06 ½ a bushel, versus the Dec. 23 close of $4.14.

Total open interest in corn rose during the latest week to 1.230 million contracts from 1.228 million, an increase of 0.16%.




Cash cattle markets this week remain quiet with estimated feedlot showlists about steady overall.  No bids were reported, and initial asking prices were expected at about $170 per cwt on a live basis and at about $270 on a dressed basis.

Cattle prices were up sharply last week at $166 to $168 live and about $264 dressed.

Producers are hoping last week’s beef market gains continue into this week to help support packer bids.  They also are said to be looking at Monday’s gains in futures prices to lend support to cash.

The USDA Monday reported boxed beef prices were higher with choice up $0.33 per cwt at $249.36 and select up $0.03 at $240.43.

The CME Feeder Cattle Index for the seven days ended Jan. 2 was $228.74, up $10.79, or 4.95%, from $217.95.