Corn                                                Estimated Fund Position
Short Term: Up                            Net Long Futures and Options: 8333
Long Term: Up                             Change: -7000
Overnight Trade: K +2 @7:30 AM

May corn stalled out just below the 50% retracement of the last move down, then posted an outside day lower on the chart. The reversal is not a good sign, especially since we had some positive fundamental news in the form of a large sale of old crop corn to unknown destinations. We have to plan on follow through weakness after the reversal, but we also have to plan on more bull spreading because basis levels aren’t letting up, and they won’t if the futures are lower.

Wheat                                              Estimated Fund Position
Short Term: Down                         Net Long Futures and Options: -70171
Long Term: Down                          Change: -4000
Overnight Trade: Chicago: K Unch KC: K +1 @7:30 AM

The wheat market is the weak link. We are supposed to have the cheapest wheat in the world, but Saudi Arabia found cheaper wheat elsewhere. May Chicago wheat is cheaper than May corn. July Chicago wheat is about 21 over the July corn, but that spread will probably invert as well. New lows again today would be yet another sell signal in the wheat market.

Soybeans                                          Estimated Fund Position
Short Term: Up                                Net Long Futures and Options: 116999
Long Term:Up                                  Change: +6000
Overnight Trade: K +4 @7:30 AM

Old crop soybeans were strong yesterday and are seeing follow through buying this morning.  Demand and basis levels are too strong for the old crop beans to not go higher. Old crop ending stocks will likely shrink again in the supply and demand report Friday, which should remind traders that supplies will be very tight this summer. May beans should be at $14.90 soon.

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

Live cattle futures were moderately higher on Monday, supported by sharply higher cutouts and steady show lists with a week ago. Producers are pricing show lists $130-$132 in the south and $207+ in the north. Choice beef cuts closed above 190.00 for the first time in a month and a half. Look for support from continued strong equity market trade and new money entering the cattle market. Open interest was up 696 contracts on Monday. With trading funds net short, a short covering rally could ensue at any time.

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

Feeder cattle futures posted moderate gains on Monday, supported by live cattle strength and an improving cash market. Plains moisture should supply additional strength to the market, with grazers becoming more competitive in the auctions around the area. Overnight corn prices are modestly higher, with feeders firm in the front two months but softer in the deferred.