Corn                                          Estimated Fund Position
Short Term: Up                      Net Long Futures and Options: -6151
Long Term: Down                 Change: -13000
Overnight Trade: K Unch Z +1 @7:30 AM

Corn was quiet overnight trading both sides of unchanged. Yesterday’s pressure was mostly due to the outside markets and with no follow through down in the gold or stock market, there  was little reason for further pressure in the corn. On the charts, however, we will need to see a positive close today for the bulls to have any sort of hope for a rally. The spread trade will be important to watch as well. Bull spreading with a positive close would be friendly.

Wheat                                         Estimated Fund Position
Short Term: Up                         Net Long Futures and Options: -51371
Long Term: Down                     Change: -6000
Overnight Trade: Chicago: K +1 KC: K -2 @7:30 AM

Crop conditions didn’t change much. Nationwide we are still at 36% Good to Excellent. In Kansas the wheat is rated at 30% Good to Excellent and 33% Poor to very poor, so things don’t look great. If the outside markets can avoid another meltdown today, then there should be decent chance at a recovery. Traders are always hesitant to chase a freeze rally, so it will probably take declining crop condition ratings to get speculators excited.

Soybeans                                     Estimated Fund Position
Short Term: Up                           Net Long Futures and Options: 27626
Long Term: Down                       Change: -7000
Overnight Trade: K +12 X+5 @7:30 AM

Basis levels continue to firm, which is a good indication that futures, at least in the old crop, are too low. The May contract should be able to reach $14.30 very soon, and a move towards $15.00 wouldn’t surprise me, especially if we end up seeing another good export sales report. New crop is a different story. Plan on more bull spreading.

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

Live cattle futures, like most commodities, closed sharply lower on Monday. The selloff was more a product of a macro-economic meltdown than anything meat market specific. Show lists are steady to slightly larger than a week ago. The key over coming weeks is going to be whether the slaughter rate continues to improve or not. Overnight activity has been two sided, with a higher bias as we write. Weakness in the Dollar, along with equity market strength should support.

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

Feeder cattle futures joined the procession lower on Monday, in spite of weakness in the grains. May feeders have now given up more than 8.00 since the first of the month. Overnight activity is lower again, with .30- .50 losses in all but the April contract. Cash index levels fell to 137.59 on Monday, but remain premium to the April board by about 1.00. Overnight corn values are rebounding modestly, which will not help the recovery effort in the feeders.