Corn Estimated Fund Position
Trends – December Contract
Short Term:Down Net Long Futures and Options: -204805
Long Term: Down Change: -3000
Overnight Trade: Z +1 @7:30 AM
The corn market has, so far, broken the string of lower lows that started last Thursday. The December contract hasn’t taken out yesterday’s high either, so it appears we are stuck in consolidation mode. The market is oversold and everyone is hoping for a short covering bounce ahead of Monday’s report, so perhaps that is what we will get. The 9-day moving average is about $4.68, which is a likely upside target for this week. The forecasts look too favorable to have too much strength.
Wheat Estimated Fund Position
Trends – September Contract
Short Term: Down Net Long Futures and Options: -75002
Long Term: Down Change: +2000
Overnight Trade: Chicago: U -1 KC: U -2 @7:30 AM
Yesterday the wheat made up for some of Monday’s losses, but there just isn’t much buying enthusiasm right now. Strong demand gives the wheat the potential to maintain separation from the corn, but that may mean that wheat is able to hold steady while the corn pushes lower into the fall. Plan on sideways trade until Monday’s report in the September KW. Meanwhile the rains in the HRW Belt will keep a lid on the July 14 contract.
Soybeans Estimated Fund Position
Trends – November Contract
Short Term: Down Net Long Futures and Options: 19164
Long Term: Down Change: -6000
Overnight Trade: X +3 @7:30 AM
November soybeans made another new low for the move overnight. Forecasts are non-threatening and we are often told that the beans are a crop of August. If the August weather is good we have to plan on big production. A little bit of short covering is likely ahead of the report since there is a possibility of a change in acreage, but unless the weather pattern changes, we have to sell rallies.
Short Term: Up
Long Term: Up
Opening Calls: 20-40 Higher
Live cattle futures closed higher across the board on Tuesday, with the August contract leading the way in spite of the 50 deliveries on first notice day. Overnight strength in the market is impressive, with the lead contract now trading above the 50 and 100 day moving averages. The extended move to the upside comes after additional 60 deliveries were put out against the August contract. The 50 retenders were all demanded, suggesting a strong stopper entering the process.
Short Term: Up
Long Term: Up
Opening Call: Mixed
Feeder cattle futures closed moderately higher on Tuesday but remain narrowly mixed in overnight trade, in spite of the solid strength in the live pit. Corn prices are trading mostly firmer in early morning trade. The cash index saw modest gains again on Tuesday but remain well below the August futures price. We expect the corn activity to be watched closely over the remainder of the week. A bounce in that market ahead of Monday’s grain report could limit strength in the feeders for a while.