Corn                                                    Estimated Fund Position
Short Term: Up                                Net Long Futures and Options: 7849
Long Term: Down                           Change: +14000
Overnight Trade: K -3 Z -2 @7:30 AM

May corn posted an outside day higher on the chart yesterday, but saw no follow through strength overnight. After an outside day on the chart there is typically some follow through, so I expect to see a new high for the move shortly. Bull spreading was very active and the May – July spread is testing the recent highs, which is a good indication that cash demand is strong and that the shorts in May are scared.

Wheat                                              Estimated Fund Position
Short Term: Up                               Net Long Futures and Options: -48371
Long Term: Down                           Change: +3000
Overnight Trade: Chicago: K -5 KC: K -4 @7:30 AM

The wheat didn’t get back all of Monday’s losses like the other markets, but did have a solid close. There will be another freeze scare this week, so we could see some speculative buying because of that, but the lack of moisture in the western part of the HRW Belt is probably doing more damage than the cold temperatures. Look for the July KW to test the 50-day moving average near $7.60 soon.

Soybeans                                        Estimated Fund Position
Short Term: Up                              Net Long Futures and Options: 34626
Long Term: Down                         Change: +7000
Overnight Trade: K -2 X-4 @7:30 AM

Bull spreading is the main feature of the soybean market. Basis levels are strong enough to suggest that supplies are tighter than USDA would have us believe. The May beans still haven’t cleared Monday’s high, but that is bound to happen at some point this week. I am still looking for $14.30 this week.

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

Live cattle futures closed moderately higher on Tuesday, with support stemming from a drop in the Dollar and a sharp rally in equities. Both of those entities are reversing their fortune overnight, making follow through buying in the cattle hard to come by. Front months are modestly higher, with weakness seen in the deferred. Cash trade could begin to take shape today, with packers appearing to have an advantage due to April discount to recent cash. Cattle on feed estimates should be released today, with private sources expecting steady to slightly  higher Placements verses a year ago. Open interest was down on Tuesday’s rally, giving little reason for follow through buying.

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

Feeder cattle futures closed modestly higher on Tuesday, the first positive close in the May contract in more than a week. The March 20th low in the May did hold, providing a double bottom in the chart pattern, if we can climb away from this trading zone. Overnight corn values have backed off a few cents, which could provide needed support if it continues to decline. A steady to lower placement figure in Friday’s report would boost longer term bullish ideas in the feeders.