Schwieterman: Weather Costing Cattle Tonnage, Wheat Finding Support
10/30/2009 08:07AM
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Corn Estimated Fund Position
Trends
Short Term: Down
Long Term: Up Net Long Futures and Options: 117163
Overnight Trade: Z -4 3/4 Change: +6000
Opening Calls: 3-5 Lower
The ended the overnight session by giving up a sizeable portion of yesterday’s gains. The Dollar bounced back a little and the stocks slipped, which was enough reason for traders to sell. The extended forecasts are dry, which means there is potential for better harvest activity next week and that is weighing on the market as well. Look for the December corn to continue to consolidate around the $3.70 area.
Wheat Estimated Fund Position
Trends
Short Term: Down Net Long Futures and Options: -38592
Long Term: Up Change: +4000
Overnight Trade: Chicago: Z -4 1/4 KC: Z -3
Opening Calls: 3-5 Lower
The December KW is still finding support around the $5.03 area. A move below Monday’s low of $5.01 ¼ would be viewed as negative and have traders looking for a move down to $4.93. SRW planting concerns are still a major supporting factor, but at the moment traders are looking at next week’s weather as conducive to planting.
Soybeans Estimated Fund Position
Trends
Short Term: Down Net Long Futures and Options: 45097
Long Term: Up Change: +4000
Overnight Trade: X -8
Opening Calls: 5-10 Lower
The November soybeans traded both sides of the $9.70 level yesterday and that will probably happen again today. The severity of today’s weakness will likely be tied to the size of the bounce in the US Dollar Index. Plus there is the idea that we will see harvest activity increase, which is also a negative factor. Demand is still
excellent, but replenishing supplies is more important right now.
Live Cattle
Trend
Short Term: Up
Long Term: Up
Seasonal: Up
Opening Calls: Mixed
Live cattle futures closed moderately lower on Thursday, surprising many traders after midweek cash prices produced new highs for the past several months in the south. Beef prices were lower, but remain a good 2.00 higher for the week. Any additional cash business is going to be limited to spot sales. Cleanup appears pretty good. Weather overnight produced snow in western Nebraska and rain in a majority of the feeding region. The weather is expected to continue costing tonnage as we head into the month of November. Overnight trade was mixed, with the expiring October contract declining sharply. The selloff in October is rumored to be tied to a trader trapped in long cattle short lean hog spreads.
Feeder Cattle
Trends
Short Term: Up
Long Term: Down
Seasonal: Up
Opening Call: Mixed
Feeder cattle futures got the double whammy on Thursday, with lower live and higher corn futures leading to a selloff of nearly 1.00 in most months. The inability of the cash to rally over the past week or so, while corn was going lower has the feeder market on the defensive. Some support could surface today, if corn has any follow through from its overnight weakness. Wet feedlots and unplanted wheat fields have reduced near term demand at the sale barns. Equities look to open modestly lower this morning, offering little support for livestock.