Corn                                         Estimated Fund Position
Short Term:Down                 Net Long Futures and Options: 208662
Long Term: Down                 Change: +24000
Overnight Trade: Z -5 @7:30 AM

Export sales were horrible again at only 4,200 MT due to cancellations by unknown destinations. Strong basis and high flat prices are keeping importers from buying, which to some degree is ok because we need to keep most of our corn here in the US for our own needs. However, the lack of export sales is keeping speculators from getting excited about the corn market and so far there has been no follow through strength from yesterday’s surge higher. The bulls need to see a positive close today to generate some upside momentum.

Wheat                                      Estimated Fund Position
Short Term: Down                 Net Long Futures and Options: 4602
Long Term: Down                  Change: +5000
Overnight Trade: Chicago: Z -7 KC: Z -7 @7:30 AM

Yesterday the December KW close above the 40 and 50-day moving averages and back in the upper end of the trading range. Unfortunately there hasn’t been any follow through buying, so a move to the top of the trading range at the $9.50 area is still in question. It won’t help that export sales were poor at 279,900 MT. Numbers like that completely justify USDA’s cut in the export estimate yesterday and keep the speculators waiting for fresh news. $9.06 is critical support today in the December KW.

Soybeans                                    Estimated Fund Position
Short Term: Down                    Net Long Futures and Options: 163902
Long Term: Down                     Change: +12000
Overnight Trade: X -15 @7:30 AM

Yesterday the November soybeans closed above the 9-day moving average for the first time in a month, which is one of the first steps in returning to a bull market, but the market has given up most of yesterday’s gain in the overnight trade. It seems that traders are already looking ahead to the November supply and demand report and expecting another increase in production. In the mean time export sales were very good again at 500,700 MT and the meal and oil sales were good as well. The market has to hold together today to avoid new lows next week.

Live Cattle
Short Term: Down
Long Term: Down
Opening Calls: Mixed

Live cattle futures reversed early strength to close lower in the front three months on Thursday. Cash trade is yet to get established, with bids of $125 in the south being passed by most feedlots. We expect the trade to be in the $125-$126 range today, depending on the activity in the October contract. Fresh deliveries out of Worthing on Thursday were immediately demanded, which should support the front month. Near limit higher corn prices after their report on Thursday should help support deferred live cattle contracts.

Feeder Cattle
Short Term: Down
Long Term: Down
Opening Call: Mixed

Feeder cattle futures felt the brunt of the big increase in corn values on Thursday, with several contracts posting limit down moves. Our fat feeder spreads that have languished for the past month have finally closed the gap. A modest selloff in corn overnight has feeder cattle trading marginally higher in early morning trade. Open interest climbed more than 800 contracts on Thursday, suggesting more active hedge activity entering the market. Rallies are for selling until fats can create a better margin for profit.