Managed Money Takes Larger Net Long Cattle Position

As of last Tuesday, Jan. 4, large commodity investment firms, known as managed money, had a larger collective net long position in live cattle futures than they had a week earlier.

At the same time, commercial traders, those who own cattle and theoretically could make or take delivery of a futures contract, expanded their collective net short position.

The data came from the Commodity Futures Trading Commission’s weekly Commitments of Traders report Friday.

 

MANAGED MONEY GOES LONG

 

Managed money’s new cattle position last Tuesday totaled 69,462 contracts, up 4,025, or 6.15%, from 65,437 a week earlier.  This made for a two-week rise in their net long position.

At the same time, commercial traders had a collective net short cattle position totaling 142,087 contracts, up from 139,182 a week earlier.  It also was their second week of increase in their position.

The CFTC said managed money arrived at their new live cattle position by adding 3,730 long positions, liquidating 195 short positions and putting on 5,947 spread positions.  This left them with 27.5% of total long open interest, 6.5% of total short open interest and 15.4% of total spread open interest.

Commercials got to where they were by adding 816 long positions and 3,721 short positions, leaving them with 8.4% of total long open interest and 51.4% of total short open interest.

The CME Group said live cattle open interest last Tuesday was 330,630 contracts, up 17,668, or 5.65%, from 312,962 a week earlier.

CME data also show the most-active Feb contract declined during the CFTC reporting week to settle last Tuesday at $137.82 per cwt, compared with $139.40, but formed a swing high of $141.42 on Wednesday.

 

MANAGED MONEY SELLS CORN

 

As of last Tuesday, managed money’s collective net long corn position totaled 355,355 contracts, down 7,176, or 1.98%, from 362,531 a week earlier.

Commercials had a total net short corn position Tuesday of 655,727 contracts, down 27,025, or 3.96%, from 682,752 a week earlier.

The CFTC said managed money arrived at their new net long corn position by liquidating 8,700 long positions, covering 1,524 short positions and unwinding 5,136 spread positions.  This left them in control of 25.1% of total long open interest, 1.8% of total short open interest and 8.1% of total spread open interest.

Commercials got to where they were last Tuesday by liquidating 1,964 long positions and covering 28,989 short positions, leaving them with 23.5% of total long open interest and 66.7% of total short open interest.

The CME Group said total corn open interest last Tuesday was 1.520 million, down from 1.523 million a week earlier.

 

CATTLE, BEEF RECAP

 

The USDA reported formula and contract base prices for live FOB steers and heifers this week ranged from $139.53 to $140.32 per cwt, compared with last week’s range of $135.00 to $143.25.  FOB dressed steers and heifers went for $217.39 to $217.98 per cwt, versus $212.43 to $218.42.

The USDA choice cutout Monday was up $4.22 per cwt at $276.04, while select was up $5.40 at $266.50.  The choice/select spread narrowed to $9.54 from $10.72 with 72 loads of fabricated product and 35 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 $1.45 to $1.65 a bushel over the Mar futures and for southwest Kansas were unchanged at $0.35 over Mar, which settled at $5.99 3/4 a bushel, down $0.07.

The CME Feeder Cattle Index for the seven days ended Friday was $161.98 per cwt up $0.19.  This compares with Monday’s Jan contract settlement of $160.92 per cwt, down $1.17.