Schwieterman: Cattle futures higher ahead of Friday's report

Corn                                                    Estimated Fund Position
Trends
Short Term: Down                           Net Long Futures and Options: 162821
Long Term: Up                                  Change: +4000
Overnight Trade: N +4 1/2 Z +4 1/2
Opening Calls: 3-5 Higher

Yesterday’s bounce back from early pressure and the follow through buying overnight suggests that the corn market has made a bottom. The overall pattern is still sideways, so at this point we should look for the July corn to move back to the top of the trading range at the $6.70 area. There haven’t been any fresh Chinese purchases announced this week, which is a little disappointing, but their price hasn’t broken either, which means sales are still possible.

Wheat                                                      Estimated Fund Position
Trends
Short Term: Down                                 Net Long Futures and Options: -78884
Long Term: Down                                  Change: +2500
Overnight Trade: Chicago: N +2 1/4 KC: N -1
Opening Calls: Mixed

July KW fell through the $6.80 support, but the wheat complex in general made a very strong rebound yesterday. Export sales were good and there is some talk of dry weather in eastern Europe, but there really isn’t any market moving news out there. Oversold technical indicators and yesterday’s rebound suggest more sideways trade ahead.

Soybeans                                                 Estimated Fund Position
Trends
Short Term: Up                                        Net Long Futures and Options: 150420
Long Term: Up                                         Change: -4000
Overnight Trade: N +12 3/4 X +11 3/4
Opening Calls: 10-15 Higher

S. American production estimates are shrinking again which increases our export prospects for both this year and next year. It looks like the soybeans are ready to resume the trend higher or at the very least retest the recent highs. Look for the July contract to move back to the $13.80 area by early next week. Technical indicators look bullish.

Live Cattle
Trend
Short Term: Down
Long Term: Down
Opening Calls: 30-50 Lower

Live cattle futures closed modestly higher on Thursday, after trading in a very wide range and on both sides of unchanged. This afternoon's on feed report is expected to be a feature today, with cash completed for the week. Outside markets are mixed, with a lower Dollar and lower equities offsetting. Thursday's export sales total of 52,000 mt was the highest that I can ever recall. Average estimates for the report are expecting 102.3% on feed, 102.7% placed and 99.5% marketed.

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

Feeder cattle futures closed moderately higher on Thursday, led by .50 gains in the April contract. Cash index levels were off a bit, but daily averages appear to be stabilizing. Overnight saw continued firming in the corn futures, which seemed to weigh on the feeders. we expect to see two sided trade ahead of the placement numbers this afternoon. Chart patterns continue to argue for selling any extended rally effort.

1. A conversation with Dr. Jim Marsden about the safety of beef
2. Traders evening up positions ahead of the weekend Friday
3. Nearly 1,000 emaciated cattle found on N.M. ranch
4. Ag groups assisting cattle operations affected by tornado
5. NOAA: Get ready for a busy hurricane season
6. NCBA Op-Ed: ADUFA/AGDUFA reauthorization advances in the House

1. Former Eastern Livestock CEO, CFO sentenced for federal crimes
2. Post-tornado composting a solution for disposal of dead livestock
3. TSCRA works with sale barns to catch Houston cattle thief
4. Michigan hay buyers should plan purchases early
5. More beef cows in worst drought regions than a year ago
6. New animal identification rules aid disease traceability

1. Commentary: In praise of animal foods
2. Meat industry associations quick to attack the new MCOOL rule
3. Seven jobs more dangerous than farming
4. What’s on America’s grill this weekend?
5. NASA backs 3D food printer to feed growing population
6. White House urges Senate to cut crop insurance in farm bill