Corn                                    Estimated Fund Position
Trends – December Contract
Short Term:Down                Net Long Futures and Options: -144420
Long Term: Down                Change: -10000
Overnight Trade: Z -2 @7:30 AM

To the surprise of many traders, USDA increased the corn yield and carry out estimates in yesterday’s report, which put pressure on the market. The losses yesterday and overnight haven’t been too heavy, which suggests that perhaps not everyone is convinced USDA is correct and that we will see a much different report in October. So far all the report has done is give us a little bit of volatility and now the market is right back to trading sideways in the $4.60 - $4.70 area. A move out of that range will determine how the market behaves for the rest of the month.

Wheat                                  Estimated Fund Position
Trends – December Contract
Short Term: Down               Net Long Futures and Options: -73491
Long Term: Down                Change: +2000
Overnight Trade: Chicago: Z -5 KC: Z -5 @7:30 AM

The wheat market saw good gains at the end of yesterday’s session, but gave most of that up overnight. Wheat ending stocks were increased by 10 million due to an increase in imports, so the fundamental outlook of the market is little changed and therefore still friendly. The solid export sales pace should allow for an increase in the estimate in the October or November report. The market should be sensitive to any surge in demand that we may see in the future. For now the market is still stuck in a holding pattern.

Soybeans                              Estimated Fund Position
Trends – November Contract
Short Term: Up                     Net Long Futures and Options: 131340
Long Term:Up                       Change: +15000
Overnight Trade: X +1 @7:30 AM

The soybeans jumped higher yesterday thanks to the 150 million bushel ending stocks estimate, but didn’t see much follow through overnight. The tighter stocks level means that traders will be watching Chinese buying and S. American production very closely. We are on the verge of having very tight stocks once again and beans may be scarce next summer. If these stocks estimates are correct it also implies that the corn will lose some acres to the soybeans next spring so the new crop price ratios will be watched closely as well. On the charts the November beans are back to the highs and need to clear $14.10 in order to start another leg higher.

Live Cattle
Short Term: Down
Long Term: Down
Opening Calls: 20-40 Higher

Live cattle futures closed narrowly mixed on Thursday, with October lower and deferred contracts modestly higher. Following the release of steady cash trade in all regions Thursday afternoon, the market has firmed in overnight trade, led by the October. The steady cash on a Thursday, in spite of lower cutouts throughout the week should be a confidence builder for the feedlots. Beef exports for the week were once again very solid for the third week in a row. Carcass weights should be monitored closely over the next few weeks to see the results of Zilmax being pulled off the market.

Feeder Cattle
Short Term: Up
Long Term: Up
Opening Call: 20-40 Higher

Feeder cattle futures closed moderately higher on Thursday but well off of session highs after a late day recovery in the grain markets. Feeders are firm again in overnight trade but holding inside of Thursdays’ wide trading range. The daily cash index price jumped above 158.00 on Thursday, with the 7 day average rising .30 to 156.36. Corn is modestly lower overnight, which should keep the  feeders supported, as long as fats can hold above recent lows.