Large commodity index funds, known as managed money, divested themselves of many of their long live cattle futures positions in the week ended Tuesday as hedgers covered many of their short positions.
The data comes from the Commodity Futures Trading Commission’s weekly Commitments of Traders report.
MANAGED MONEY LESS LONG CATTLE
As of Tuesday, managed money’s collective net long live cattle position stood at 35,813 contracts, down 16,581, or 31.6%, from 52,397 a week earlier.
At the same time, hedgers, otherwise known as commercial traders because they either own, or will own, the cattle behind the futures contracts, had a total net short position of 114,324 contracts, down 11,931, or 9.45%, from 126,255 a week earlier.
The CFTC report said managed money arrived at their new live cattle position by liquidating 7,587 long positions, adding 8,997 short positions and putting on 5,232 spread positions. This left them holding 26.0% of total long open interest, 14.4% of total short open interest and 10.2% of total spread open interest.
Commercial traders reached their new live cattle position by adding 2,830 long positions and covering 9,101 short positions, leaving them with 13.3% of total long open interest and 50.2% of total short open interest.
CME Group data showed that total live cattle open interest Tuesday was 309,979 contracts, up 4,495, or 1.47%, from 305,484 a week earlier.
CME data also showed that the most-active Jun live cattle contract declined in value during the week ended Tuesday, settling at $135.32 per cwt, down from $136.25. In between, it set a near-term low of $132.50 on April 29.
MANAGED MONEY SELLS CORN
Tuesday, managed money had a collective net long position in Chicago corn futures of 327,802 contracts, down 10,792, or 3.19%, from 338,594 a week earlier.
At the same time, commercial traders had a total net short position of 747,181 contracts, up 5,165, or 0.70%, from 742,016 a week earlier.
The CFTC said managed money arrived at their new corn position by adding 627 long positions, 11,419 short positions and unwinding 78 spread positions. This left them in control of 12.9% of total long open interest, 2.3% of total short open interest and 6.1% of total spread open interest.
Commercial traders got to where they were by liquidating 25,003 long positions and covering 19,838 short positions, leaving them with 20.6% of total long open interest and 69.8% of total short open interest.
CME Group data showed total open interest Tuesday of 1.514 million contracts, down 11,997, or 0.79%, from 1.526 million a week earlier.
The most-active Jul contract declined to $7.93 a bushel from $8.01 ½ a week earlier.
CATTLE, BEEF RECAP
The USDA reported formula and contract base prices for live FOB steers and heifers last week ranged from $137.25 to $147.00 per cwt, compared with the previous week’s range of $139.77 to $147.00. FOB dressed steers, and heifers went for $220.50 to $228.60 per cwt, versus $219.04 to $227.96.
The USDA choice cutout Friday was down $0.74 per cwt at $254.44, while select was down $0.75 at $245.06. The choice/select spread widened to $9.38 from $9.37 with 60 loads of fabricated product and 21 loads of trimmings and grinds sold into the spot market.
The USDA reported that basis bids for corn from feeders in the Southern Plains were unchanged at $1.55 to $1.65 a bushel over the Jul futures and for southwest Kansas were steady at even the Jul, which settled at $7.84 3/4 a bushel, down $0.12 3/4.
The CME Feeder Cattle Index for the seven days ended Thursday was $155.51 per cwt unchanged. This compares with Friday’s May contract settlement of $159.55, down $0.77.