Managed Money Raises Stake In Cattle

Managed money increased its net long position in cattle for the fourth straight week, rising to 15,410 contracts from 12,310 the previous week, according to Commodity Futures Trading Commission data.

The weekly Commitments of Traders report released Friday for the week ended Tuesday said the new net long position of managed money, or large speculators, in live cattle was a gain of 3,100 contracts, or 25.2%.

During the same week, commercial traders, those who theoretically could make or take delivery of a live cattle futures contract, increased their net short position for the second straight week, rising to 33,708 contracts from 30,212, a gain of 3,496, or 11.6%.

The CFTC said managed money arrived at its new net long position by adding 212 new long positions while covering 2,888 short positions and unwinding 237 spread positions.  This left them representing 23.1% of total long positions and 16.9% of total short positions.

Commercials, meanwhile, arrived at their new net long live cattle position by liquidating 1,992 long positions and adding 1,504 short positions.  This left them in control of 22.6% of total long open interest and 36.2% of total short open interest.

Total cattle open interest declined slightly during the week to 248,958 contracts from 251,098 the previous week, the CME Group reported.  This is a decline of 2,140 contracts, or 0.85%.

After completing a sharp drop-off on Tuesday, Dec. 8, the most-active Feb futures contract, continued to decline in the latest CFTC reporting week.  And although contract bounced limit-up on Friday, prices still are in a downward-sloping channel.  Tuesday, Dec. 15, the contract settled at $120.30 per cwt, down $1.95, or 1.60%, from $122.25 the previous Tuesday.




Also during the latest reporting week, managed money trimmed its net short corn position for the third straight week, the CFTC said. The new net-short position of these traders was 42,942 contracts, up 26,099, or 37.8%, from 69,041 the previous week.

At the same time, commercial traders increased their net short position to 301,935 contracts from 283,683 the previous week a gain of 15,252, or 6.43%.

The CFTC reported that managed money arrived at its new net short position by liquidating 5,005 long positions and covering 31,104 short positions while adding 2,241 new spread positions.  This left them representing 13.2% of total long open interest and 16.6% of total short open interest.

Commercial traders arrived at their new position by liquidating 8,151 long positions and adding 10,101 short positions, leaving them in control of 22.0% of total long open interest and 45.9% of total short open interest.

Total corn open interest during the week declined to 1.264 million contracts from 1.281 million for a decrease of 16,978, or 1.33%, the CME Group reported.

The most-active Mar corn futures contract rose during the latest CFTC week to chart resistance around $3.79 ½ a bushel.  This level has been tested four times now and seems strong, but for the week ended Tuesday, the contract rose to a close $3.77 ¼ from a settlement a week earlier of $3.70, a gain of $0.07 ¼, or 1.96%.




Cash cattle markets last week were active with trade spread out over four days.  Prices were mostly $117 to $118 per cwt on a live basis, down $1 from the previous week, and $184 to $188 on a dressed basis, down about $2.

The USDA reported mixed wholesale beef prices Friday with choice down $1.62 per cwt from Thursday to $194.14, and the select cutout up $0.81 at $186.35.  The choice/select spread narrowed to $7.79 from $10.22 on Thursday, and there were 88 loads of fabricated product sold into the spot market.

For the week, the choice cutout fell $8.36 per cwt from $202.50, but the select cutout declined only $0.08 from $186.43 the previous week.

The USDA said ribs and rounds were steady to weak.  Choice chucks and loins were weak while select versions were firm.

The CME Feeder Cattle Index for the seven days ended Thursday was $154.52, down $0.17.  This compares with the Jan settlement Friday of $148.75, up $4.50.