Corn                                          Estimated Fund Position
Short Term: Up                         Net Long Futures and Options: 322206
Long Term: Up                          Change: +18000
Overnight Trade: N -4 3/4 Z -7 1/2
Opening Calls: 3-5 Lower

The corn shot higher yesterday, but failed to follow though overnight. However, every contract did make a new high yesterday and the supply and demand tables are more bullish than they were a month ago. There is also a good chance that the fundamental outlook continues to improve as we move ahead in the crop year, which means prices will be very well supported. Look for a retest of yesterday’s high at some point today.

Wheat                                       Estimated Fund Position
Short Term: Down                    Net Long Futures and Options: -11091
Long Term: Down                     Change: -3000
Overnight Trade: Chicago: N -4 1/2 KC: N -9 1/2
Opening Calls: 5-10 Lower

The wheat market is struggling. Yield reports seem pretty poor to me, but USDA raised the yield estimate for US wheat yesterday and the supply and demand tables still suggest we will have plentiful supplies of wheat for another year. At some point it still seems likely that we will see lower production estimates for the HRW Belt and maybe the other regions as well, but for now, the numbers say everything will be just fine so prices will continue to erode.

Soybeans                                  Estimated Fund Position
Short Term: Up                         Net Long Futures and Options: 78382
Long Term: Up                         Change: -5000
Overnight Trade: N -8 X-7 3/4
Opening Calls: 7-10 Lower

The higher ending stocks estimates weighed on the soybeans yesterday, but support hasn’t completely failed yet. The July soybeans need to hold above $13.80, but the market is lacking bullish news right now. Without traders becoming more concerned about weather/planting in the near future, the July soybeans could head back to the $13.00 area.

Live Cattle
Short Term: Down
Long Term: Down
Opening Calls: 10-30 Lower

Live cattle futures completed an odd trading session on Thursday, with the market sharply higher and bear spreading the feature. First quarter of 2012 contracts traded as much as 2.05 higher on the close, while front end months posted much more moderate gains. The reason for bear spreading was the new highs being posted in the corn pit. Higher corn is expected to limit the days on feed for deferred cattle. Overnight trade is trending lower, with profit taking after the recent surge higher.

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

Feeder cattle futures closed moderately higher on Thursday, after trading in a wide range on both sides of unchanged. When it became apparent that corn was not going to finish limit higher, feeders rallied behind strength in deferred live cattle contracts. Overnight saw some weakness in the corn and continued strength in the feeders. Feeders are attempting to break above the recent sideways trading pattern.