Corn                                          Estimated Fund Position
Trends – December Contract
Short Term: Up                       Net Long Futures and Options: -164692
Long Term: Down                  Change: -14000
Overnight Trade: Z +5 @7:30 AM

We have seen some good bull spreading in the corn market the past couple of days thanks to strong basis levels around the country. Harvest activity has begun in many areas around the country, but that doesn’t mean there aren’t shortages of corn elsewhere. Yesterday’s chart action in the December contract was bothersome with the close below the previous 3 day’s lows after stalling out at the 50% retracement. The market has been up one day and down the next and today should be the up day, but with the recent rains and the good yield numbers from Pro Farmer, I suspect that this rally has run its course and we will begin to trend lower from here.  And yes, an early freeze is still a wild card we may have to contend with at some point.

Wheat                                       Estimated Fund Position
Trends – September Contract
Short Term: Down                  Net Long Futures and Options: -72017
Long Term: Down                   Change: -3000
Overnight Trade: Chicago: U +3 KC: U +3 @7:30 AM

The new low for the move in the December KW looks pretty ugly on the charts. Technical indicators aren’t even oversold, which is really troublesome. What happens next will largely depend on the corn market, and to an extent, export sales. If the corn falls apart from here we will have to see strong sales to hold the wheat market together.

Soybeans                                   Estimated Fund Position
Trends – November Contract
Short Term: Up                         Net Long Futures and Options: 31153
Long Term:Up                           Change: -7000
Overnight Trade: X +11 @7:30 AM

The November soybeans are consolidating around the $13.00 level. The market hasn’t been able to move the past few sessions because there is a great deal of uncertainty regarding yields. There is great production potential, but that potential may not be realized due to the late maturity of the crop. If the yield is cut from the current level there is lots of upside potential in the market, if yield is increased the opposite is the case. We have to be prepared for volatility and large price swings.

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

Live cattle futures closed moderately to sharply lower on Thursday, with some fresh selling entering the market ahead of cash trade and this afternoon’s on feed report. Export sales were higher for the week, while carcass weights inflated once again. We will be interested to see if the weights decline dramatically once Tyson excludes Zilmax cattle from their kill mix. On feed estimates look supportive but cash will be the leader in today’s action.

Feeder Cattle
Short Term: Up
Long Term: Up
Opening Call: 10-30 Lower

Feeder cattle futures closed narrowly mixed on Thursday, with weakness in the live cattle offsetting the sharply lower corn values on the day. Overnight corn trade has firmed, allowing for some pressure on the feeders. The fats are not doing anything bullish enough to carry the feeders at this point. Cash index levels spiked to new highs for the move on Thursday. Weather and placement numbers in this afternoons report should be supportive.