Schwieterman: Live Cattle Futures & Corn Finish Day With A Rally, Lower This Morning
11/03/2009 08:30AM
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Corn Estimated Fund Position
Trends
Short Term: Down
Long Term: Up Net Long Futures and Options: 118431
Overnight Trade: Z -4 1/2 Change: +10000
Opening Calls: 3-5 Lower
Fund buying sent the corn market higher yesterday and overwhelmed any negative influences from the outside markets. Overnight that wasn’t the case though and the corn gave back some of yesterday’s gains. The Dollar Index took out last week’s high, which is going to be a concern today. The corn posted an outside day higher on the charts yesterday, but it will be difficult to see follow through strength if the Dollar stays higher. Look for the December corn to move back toward $3.71.
Wheat Estimated Fund Position
Trends
Short Term: Down Net Long Futures and Options: -31009
Long Term: Up Change: +4000
Overnight Trade: Chicago: Z -8 1/4 KC: Z -7 1/2
Opening Calls: 5-10 Lower
The December KW bounced off the support at the 40-day moving average and eventually posted an outside day higher on the chart. The gains were impressive, but we are going to have to see day number 2 of major fund buying to keep the rally going. It will probably take a move back below the $5.00 level in order to find much buying interest.
Soybeans Estimated Fund Position
Trends
Short Term: Down Net Long Futures and Options: 42268
Long Term: Up Change: +5000
Overnight Trade: X -4 1/4
Opening Calls: 3-5 Lower
The soybeans broke out of the trading range yesterday, but look to be headed back into the consolidation area today. The outside market influences are negative today and the open harvest weather is negative, but a return of the fund buyers today could offset those factors again today. Time would tell, but I would be very hesitant to chase a rally with the Dollar Index being higher.
Live Cattle
Trend
Short Term: Up
Long Term: Up
Seasonal: Up
Opening Calls: Mixed
Live cattle futures rallied 50-75 points in the last few minutes of trade on Monday, after attempting to sell off in early trade. Overnight we saw some early follow through to the upside, but a strengthening U.S. Dollar led to current trade of .20-.35 lower. Cutout values were higher on Monday and some $88 cash trade took place in Texas, fully steady with last week’s highs. Look for two sided trade this morning, with major support near yesterday’s lows and resistance up near 87.00 basis the December contract.
Feeder Cattle
Trends
Short Term: Up
Long Term: Down
Seasonal: Up
Opening Call: Mixed
Feeder cattle rallied late along with the fats on Monday. The rally came before a .15 rally in the corn market occurred. Overnight corn prices were lower 4-5 cents, with feeders trading narrowly either side of unchanged. Cash index levels have continued to struggle, but yesterday’s sale in Oklahoma City was called $1-$3 higher than the previous week. Open interest declined on Mondays rally in the futures, showing short covering as the leader of the late rally.