Schwieterman: Feeder cattle futures closed moderately higher Fri.

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Corn Estimated Fund Position

Trends – July Contract

Short Term:Down Net Long Futures and Options: 112116

Long Term: Down Change: +6000

Overnight Trade: N -6 @7:30 AM

The corn gave up a big part of Friday’s gains overnight due to the non-threatening forecast in the Corn Belt and problems with DDG exports into China. If China stops taking our DDG’s due to GMO concerns it could have a big impact on ethanol production margins and also put more feed into the supply chain. The corn did post reversals higher on Friday and we typically see follow through after such a move. If we don’t see more pressure on the market when it opens back up, look for at least a test of Friday’s highs.

Wheat Estimated Fund Position

Trends – July Contract

Short Term: Down Net Long Futures and Options: -33836

Long Term: Down Change: +2000

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

The July KW built up Friday’s big gains and the market continues to widen the spread vs. the Chicago wheat. There has been very good rain through Kansas, but it isn’t helping the wheat crop at this point and is actually slowing harvest activity. Last week’s turn around in the wheat suggests we should see a recovery back to the $7.63 area and perhaps even $7.98 in the July KW if we saw some good demand news.

Soybeans Estimated Fund Position

Trends – July Contract

Short Term: Down Net Long Futures and Options: 54914

Long Term:Up Change: -1000

Overnight Trade: N -2 @7:30 AM

The July soybeans traded both sides of unchanged overnight. The Chinese halting DDG imports can be viewed as negative to the soybeans as well as the corn. The market is getting oversold and is closing in on the downside objective of $14.42. A move below $14.42 is unlikely ahead of Wednesday’s supply and demand report, so look for some consolidation trade the next couple of sessions.

Live Cattle

Trend

Short Term: Up

Long Term: Up

Opening Calls: 20-40 Higher

Live cattle futures closed mixed on Friday, with the spot month .62 higher and deferred contracts softer. Cash trade improved as much as $2.00 in all regions, in spite of lower cutouts for the week and the continued wide basis. We expect futures to start the week stronger, with no deliveries expected against the June contract at these discounted levels. We should have seen good cleanup from last weeks’ sales and some green cattle added to this weeks’ lists with higher asking prices.

Feeder Cattle

Trends

Short Term: Up

Long Term: Up

Opening Call: 30-60 Higher

Feeder cattle futures closed moderately higher on Friday and the lead August contract was 4.15 higher for the week. Friday’s recovery in the corn market appears to be short lived, with overnight trade off 6-7 cents. The cash index continued to set new daily highs on Friday, reaching 195.61 to finish the week. Early estimates for May placement totals are off 5-7% from year ago levels. Pasture land throughout the plains appears to be improving dramatically from where we were just a few short weeks ago. The better conditions will keep yearlings out of the feedyards for the next couple of months and keep supplies tight and prices firm.



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