Corn                                          Estimated Fund Position
Trends
Short Term: Up                       Net Long Futures and Options: 281380
Long Term: Up                         Change: +14000
Overnight Trade: Z +4 @7:30 AM

The yield potential that Pro Farmer is finding is well below the current USDA estimates, which is making traders nervous. I don’t think that traders or end users in general are prepared for another 10 – 20% cut in the corn yield. If we see that much of a production cut, we obviously have a lot more demand that we will have to kill. $8.30 is the resistance right now in the December corn. A move through that level will point to a move up to the $8.49 high.

Wheat                                        Estimated Fund Position
Trends
Short Term: Up                        Net Long Futures and Options: 27840
Long Term:Up                          Change: +2000
Overnight Trade: Chicago: Z +4 KC: Z+3 @7:30 AM

Wheat lagged behind yesterday and to a lesser degree overnight, but I think that the wheat could turn into a leader very soon. The Russian wheat production estimates keep shrinking, which increase the likelihood of better exports for us, which is something we really can’t handle because we need as much wheat as possible for feed. At the same time, wheat is much more valuable for human consumption than for animal consumption, so I think we will have a battle on our hands. The December KW is headed to $9.50 in short order.

Soybeans                                   Estimated Fund Position
Trends
Short Term: Up                         Net Long Futures and Options: 210517
Long Term:Up                           Change: +8000
Overnight Trade: Z +26 @7:30 AM

November soybeans have cleared $17.00, making $18.00 the next upside objective. I would guess that we will see $18.00 very soon, and at the very least before the September supply and demand report. Yield estimates are going to be shrinking unless Pro Farmer finds something great in the next two days. Traders should buy breaks because I am sure the Chinese will be.

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

Live cattle futures closed moderately higher on Monday, supported by stronger beef prices and new money entering the market. Overnight trade has been mixed, with a slightly lower bias. A very weak Dollar is developing this morning, which should provide additional support. The injection of new money, ie… 7,544 rise in open interest, should find follow through support. The stronger corn should support deferred live cattle.

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

Feeder cattle futures closed moderately higher on Monday, reversing early weakness to close well over a Dollar off of daily lows. Overnight prices rejected the higher corn prices once again, and are just now backing into negative territory for the day. At some point the grain strength should put a drag on the feeders. Open interest was slightly higher on Monday’s rally.