Raging bulls: Funds pad historic longs in CME livestock
NAPERVILLE, Illinois, June 15 (Reuters) - Speculators have held unusually bullish views in U.S. cattle futures since late last year, which was perfect timing as the domestic herd hit a 74-year low at the beginning of 2025.
Since then, U.S. beef prices have hit all-time highs, yet consumers have not relinquished their taste for the premium protein, and cattle futures have continued their climb.
In the week ended June 10, money managers boosted their net long in CME live cattle futures and options to a 10-week high of 137,836 contracts. That is a record for the date but comparable with 2017 and 2014, both of which featured a steady easing of bullish bets from here.
Funds' net long in CME feeder cattle hit a record high as of June 10, and they also extended bullish bets in CME lean hog futures and options for a ninth consecutive week. That brought their hog net long to 118,218 contracts, easily the highest ever for this time of year.
Spot live cattle futures are up about 16% so far this year and hogs have jumped by a third. Both inked fresh contract highs within the last week.
Over in grains and oilseeds, speculators were net buyers in the week ended June 10 of everything but corn and soybean oil, the latter perhaps regrettable given Friday's events.
Money managers were net sellers of CBOT soybean oil futures and options for a fourth consecutive week through June 10, leaving them with a modest net long of 24,768 contracts.
However, soyoil futures surged the daily limit on Friday, reaching one-month highs, as the Trump administration proposed higher-than-expected requirements for U.S. biofuel blending in 2026 and 2027.
This could boost the demand for domestic soybean oil, particularly as foreign feedstock including used cooking oil from China would be discouraged. Despite the optimism, there was no word yet regarding small refinery exemptions, which could effectively reduce demand.
The biofuel news lifted soybeans, which on Friday notched their highest closing price in a month at $10.69-3/4 per bushel. Money managers had increased their near-flat soybean position through June 10 to a net long of 25,639 futures and options contracts.
Despite global soybean supplies set to hit record levels this year, speculators have maintained a mildly optimistic stance in recent weeks. U.S. crop prospects are relatively modest and depend on a record yield and a certain acreage, the latter of which could be at risk in favor of corn acres.
The big U.S. corn crop expectations have turned funds into bears, as they have been net sellers in 15 of the last 18 weeks. Through June 10, they lifted their net short in CBOT corn futures and options to 164,020 contracts, up about 10,000 on the week.
This increases investors' risk of having to abruptly cover corn shorts should U.S. weather turn unfavorable, but current forecasts do not suggest this is very likely in the near-term.
Supportive spring weather boosted U.S. winter wheat conditions to the highest early-June levels in six years, and funds have noticed. Last month they established an all-time net short in Kansas City wheat futures and options, well past the previous record.
Although they have been net buyers of K.C. wheat in the latest four weeks, their net short remains extremely heavy. Funds also bought Chicago wheat in the latest four weeks, cutting their net short to 94,011 futures and options contracts from 126,895 over that period.
CBOT wheat futures surged more than 3% on Friday, motivated by strength in both the soy complex and crude oil. Crude contracts on Friday posted their largest intraday moves since 2022 after Israel conducted strikes on Iran, and both sides were still trading blows as of Sunday.
Aside from the fresh Middle East conflict and any further U.S. biofuel news, grain traders must continue to monitor how U.S. weather is shaping up for the rest of June.
Grain and oilseed futures have a history of crashing whenever nonthreatening weather is on tap for the U.S. Corn Belt into early July, when crops are setting up for the critical pollination phase.
Karen Braun is a market analyst for Reuters. Views expressed above are her own.
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