Managed Money Rapidly Expands Net Long Corn Position

Large investment funds collectively called “managed money” have entered a sizeable net long corn position, which some think is so large that fund managers will have to defend their positions in coming days, preventing a seasonal market downturn.

The Commodity Futures Trading Commission revealed in its Friday report that for the week ended Tuesday, fund net long corn positions were up 294,490 contracts in just two weeks, taking them from a net short position of 145,598 and putting their long bets at the highest level since the week ended Jan. 27.

In just the latest week, funds increased their net long positions by 108,562 contracts, or 269.2%, to 148,892 from 40,330.

Commercial traders, those who can make or take delivery, meanwhile, increased their net short positions by 78,624 contracts, or 22.7%, to 346,504 from 267,880.  The week before that, their net short position increased 84.0% from 145,598.

During the latest reporting week, the most-active Dec futures contract completed an explosive rally and then consolidated.  It went from a low of $3.82 ¾ a bushel on Jun. 30 to a high of $4.22 on July 2.  The contract has since resumed an upward trek.

Fears that too much rain in Central and Eastern Midwest states was harming production potential sent the market into the steep rally.

Total open interest during the latest week rose 14,110 contracts, or 1.08%, to 1.323 million from 1.309 million.

The CFTC said, during the week, funds added 13,316 net long positions while covering 95,246 shorts and adding 6,045 spread positions.  This left them representing 20.4% of total long open interest and 9.2% of short open interest.

Commercials arrived at their new net short positions by liquidating 15,385 longs and adding 63,239 shorts.  This left them representing 19.1% of total long open interest and 45.3% of total short open interest.




During the latest CFTC week, managed money trimmed its net long live cattle position by 3,650 contracts, or 4.68%, to 74,353 from 78,003, the lowest in two months.

Commercials cut their net short position, going to 110,302 contracts from 116,277, a dip of 5,975, or 5.14%.

Total open interest during the week declined 2,920 contracts, or 1.16%, to 248,562 from 251,482,

The CFTC said funds arrived at the new position by liquidating 3,726 longs and covering 76 shorts and adding 147 spreads.  This left them representing 36.1% of total long open interest and 6.1% of short open interest.

Commercials arrived at their new position by adding 327 net longs and covering 5,648 shorts, leaving them representing 7.2% of long open interest and 51.8% of short open interest.

During the latest reporting week, the most-active Aug position hit a short-term peak of $151.97 per cwt on Thursday, July 2, and a low of $148.10 on Wednesday, July 1, but ended on July 7 at $151.07.  The contract has since continued to decline as corn costs rose.




Cash cattle markets last week weakened through the week, with a few trades at $151 to $152 per cwt on a live basis giving way to a mostly $150 market, which was about steady with the previous week.

On a dressed basis, cattle traded last week at $238 to $241 per cwt, also about steady.

The USDA’s afternoon beef cutout value was down $2.74 per cwt at $236.98, while the select value was $233.99, off $2.59.  Volume was very active at 138 loads of fabricated product being sold into the spot market.

The CME Feeder Cattle Index for the seven days ended Thursday was $221.44 per cwt, up $1.05, well above the Aug futures contract settlement of $211.25.