Managed Money Stays The Course In Cattle

Managed money, a proxy for large commodity funds, increased their net long live cattle futures position only slightly during the week ended Tuesday, rising only 206,000 contracts, or 0.82%, to 25,311 from 25,105.

The news was part of the Commodity Futures Trading Commission’s weekly Commitments Of Traders report Friday.  The CFTC also said that commercial traders, those who theoretically could make or take delivery of a futures contract, cut their net short position by 2,001 contracts, or 2.96%, to 65,656 from 67,657.

The CFTC said managed money arrived at its new net long position by adding 1,669 new long positions and 1,463 new short positions while tacking on 759 new spread positions.  The moves left them representing 21.9% of total long open interest and 13.0% of total short open interest.

Commercials got to their new net short position by liquidating 2,915 long positions and covering 4,916 short positions, leaving them in control of 17.2% of total long open interest and 40.4% of total short open interest.

Total live cattle open interest during the week fell 6,109 contracts, or 2.11%, to 282,850 contracts from 288,959, the CME Group reported.

Live cattle futures during the week were dropping sharply, with the most-active Jun contract falling to close at $127.32 per cwt from the previous Tuesday’s settlement of $133.52.  This was a decline of $6.20, or 4.64%.  This contract now has closed lower in eight straight sessions.

 

FUNDS MAKE HUGE CUT TO NET SHORT CORN POSITION

 

While managed money was making small changes to their net live cattle position in the latest reporting week, they took a very large chunk out of their net short corn position.  As of Tuesday, they were the closest to being even they have been since the week ended Nov. 3 when they were net long by 19,860 contracts.

As of Tuesday, managed money was net short corn by 29,272 contracts, down from 146,384 the previous week, a drop of 117,112, or 80.0%.

During the same week, commercial traders made similar strides in boosting their net short corn position and held their largest net short position since the week ended Dec. 15, when it was 301,935 contracts.  They now hold a net short position of 290,005 contracts, up 113,065, or 63.9%, from 176,940 the previous Tuesday.

The CFTC reported that managed money arrived at its new net short corn position by adding 26,955 new long positions and covering 90,157 short positions while unwinding 3,712 spread positions.  This left them representing 12.7% of total long open interest and 14.7% of total short open interest.

Commercials got to where they were by liquidating 33,013 long positions and adding 80,052 new short positions, leaving them in control of 25.6% of total long open interest and 45.8% of total short open interest.

Total open interest during the latest reporting week declined by 24,310 contracts, or 1.66%, to 1.441 million contracts from 1.465 million, the CME Group said.

During the CFTC week, the most-active Jul contract was rising sharply, going to a close of $3.89 ½ a bushel from $3.65 1/2, a rise of $0.24, or 6.57%.  The contract has since peaked at $3.89 ¼.

 

CASH CATTLE MARKET TRADES LOWER

 

Cash cattle markets last week traded lower at $127 per cwt on a live basis, down $7 to $8.  In dressed markets cattle traded at $200 to $201.50, down $14 to $15.

The USDA’s choice cutout price Friday was down $0.41 per cwt at $220.31, while select was off $2.08 at $210.69.  The choice/select spread widened to $9.62 from $7.95 as 130 loads of fabricated product were sold into the spot market.

The CME Feeder Cattle Index for the seven days ended Thursday was $151.11 per cwt, down $1.77.  This compares with the Apr CME settlement Friday of $147.95, down $1.50.