Corn                                          Estimated Fund Position
Short Term: Up                      Net Long Futures and Options: -11763
Long Term: Up                       Change: -7000
Overnight Trade: N +4 Z +2 @7:30 AM

Traders were a little bit disappointed in the fact that crop condition ratings only improved by one point to 65% Good to Excellent. That is below the 5-year average and if final yield would happen to come in below the 5- year average we wouldn’t be talking about a big surge in ending stocks. If the ratings don’t show some improvement soon, the bears are going to be out of reasons to sell.

Wheat                                      Estimated Fund Position
Short Term: Down                Net Long Futures and Options: -62094
Long Term: Down                 Change: -5000
Overnight Trade: Chicago: N +4 KC: N +2 @7:30 AM

I have nothing encouraging to say about the wheat market. We saw a small bounce overnight, which was insignificant compared to the size of yesterday’s losses. We will probably see a test of the $7.00 level very soon in the July KW and after that, it is probably up to the USDA and their report numbers to determine the direction of the market in early July. In the short run plan on pressure and then we will see how the market reacts to the reports.

Soybeans                                Estimated Fund Position
Short Term: Down                Net Long Futures and Options: 94192
Long Term:Up                        Change: +3000
Overnight Trade: N +4 X +8 @7:30 AM

The soybeans made a nice recovery from the early losses yesterday. It seems that traders are now wondering if there will be any expansion in soybean acres due to the continual wet weather problems in some areas of the Corn Belt. Crop condition ratings came in at 65% Good to Excellent, which is above average, so rain may be causing a few problems, but overall the rain is probably helping the crop. Look for a corrective rally in soybeans, but the trend will remain lower barring a bullish surprise from USDA.

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

Live cattle futures closed moderately lower on Monday, with pressure stemming from weak equities and a bearishly construed May placement figure. Overnight we are seeing positive equity trade and higher cattle. There were 10 deliveries posted against the June contract, the first postings this month. Packers are buying for a short kill week and show lists appear to be larger in most locations. We could see more cash inventory procured this week, as packers have depleted their available captive supplies.

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

Feeder cattle futures closed moderately to sharply higher on Monday, with lower corn prices and stronger technical fueling the rally. Overnight trade has been narrowly mixed, with firm trade in the August, while deferred contracts are mostly flat. Corn prices are firmer in the overnight but remain well below Fridays’ closes. Cash index levels are back on the rise, following a one day hiatus. We are trading fats and feeders above the 50 day moving averages, which should provide outside support on any near term weakness.