Schwieterman: Feeder cattle futures closed moderately lower

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Corn                            Estimated Fund Position

Trends – July Contract

Short Term: Up           Net Long Futures and Options: 187543

Long Term: Up           Change: +7000

Overnight Trade: N -4 @7:30 AM

Corn was weaker overnight on ideas that planting progress will be caught up with the 5-year average in next week’s report. It also seems that there is less chaos in Ukraine, so the markets have settled down a little bit. It is interesting to note that the US Dollar Index is making new multi-month lows this morning, and while it doesn’t seem to be supporting the market now, it is something that will keep US grain competitive on the world market. Look for pressure as we head into Friday’s report.

Wheat                          Estimated Fund Position

Trends – July Contract

Short Term: Up           Net Long Futures and Options: 7067

Long Term:Up             Change: +5000

Overnight Trade: Chicago: N -4 KC: N -1 @7:30 AM

Crop condition ratings declined, which was expected, and with no rain in the forecast, we have to expect further declines next week as well. US wheat is now 31 percent Good to Excellent, which was down 2 points. Kansas is now only 17 percent Good to Excellent, which was down 4 points and 47 percent Poor to Very Poor, which was up 10 points. Oklahoma is at 73 percent Poor to Very Poor, which was up 8 points. Obviously the HRW crop is bad and the SRW ratings aren’t making up for the decline in the HRW like they did last year, which makes a record national average yield less likely. It is a long time until spring wheat harvest, but planting is behind average, which could affect yield. Buy breaks until the crop stabilizes.

Soybeans                     Estimated Fund Position

Trends – July Contract

Short Term: Down       Net Long Futures and Options: 109363

Long Term:Up              Change: -4000

Overnight Trade: N -16 @7:30 AM

The soybeans are dropping off pretty rapidly and the July contract appears to be headed for a test of the old resistance near the $14.30 area. The talk of imports is dominating the market right now and for the moment traders are thinking we will get enough beans imported to avoid shortages this summer. Prices will have to stay firm enough to keep the imports coming and to avoid selling further beans on the export market, but for next couple of days it looks like the market will probably be faced with long liquidation.

Live Cattle

Trend

Short Term: Up

Long Term: Up

Opening Calls: 10-30 Higher

Live cattle futures reversed early strength to close lower on Monday. Cutout values were mixed on the day, with choice higher and select sharply lower. Our show list came in as the smallest in the 20+ years that we have been accumulating the weekly data. Overnight trade is firmer but traders are becoming weary of higher openings and lower closes. We look for this weeks’ cash to be steady or better based on limited supplies and improving weather conditions for the grilling season.

Feeder Cattle

Trends

Short Term: Up

Long Term: Up

Opening Call: 10-30 Higher

Feeder cattle futures closed moderately lower on Monday, with early morning strength failing for the second consecutive day. Cash index levels jumped higher on Monday, gaining 1.27 for the day and posting alltime highs at 180.83. Overnight corn prices have backed off about four cents, providing additional support to the feeders. Monday’s cash sales were quoted $1-$3 higher than the previous week, which should provide more index strength over the next few days.


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