Corn                                            Estimated Fund Position
Short Term:Down                    Net Long Futures and Options: 4488
Long Term: Down                    Change: -11000
Overnight Trade: N +2 Z +2 @7:30 AM

The corn market started the overnight session weaker based on ideas that we would see good planting progress this week, but the losses didn’t last long. Initially bull spreaders supported the market. There are still no deliveries and basis is still very strong, so the old crop futures still aren’t keeping up with the cash market. There isn’t much that is bullish about the charts at the moment and we are likely in for a test of the April lows, particularly in the new crop contracts. 2 billion bushels of ending stocks will be hard for the market to overcome.

Wheat                                          Estimated Fund Position
Short Term: Up                          Net Long Futures and Options: -46000
Long Term:Up                             Change: -4000
Overnight Trade: Chicago: N +2 KC: N -1 @7:30 AM

Wheat futures also started off weaker, but also found buyers quickly. Perhaps traders were looking at the 90 degree temperatures we will be seeing in the HRW Belt early this week. Crop condition ratings will likely decline, especially in the HRW states, although some of them really can’t get much worse. The 50-day moving average is still acting as support in the July KW, and if that can hold through the next couple of sessions, we will probably see the wheat head to $8.00 again.

Soybeans                                   Estimated Fund Position
Short Term: Down                   Net Long Futures and Options: 39504
Long Term: Down                    Change: -4500
Overnight Trade: N +1 X -1 @7:30 AM

Bull spreaders are still active in the soybeans. That seems like a broken record, but why wouldn’t the bull spreads work with basis levels the way they are and the threat of ballooning new crop stocks? I don’t think that the old crop supply situation has been resolved in beans or the meal so there should be good support under those markets and in the meantime it will probably take a weather scare to support the new crop beans. As long as the weather is good the bias will be lower in the November contract.

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

Live cattle futures closed narrowly mixed on Friday but off 1.42 in the June contract for the week. Cash trade for the week was also off a good $2-$3 dollars in most regions. Packer margins have reached their best levels in several months, which should create additional chain speed if the cattle are available. We should see improved packer demand if this scenario develops as expected. Memorial Day weekend is closing in, which along with the warmer grilling season should kick in demand over the coming weeks. Exports have slowed some over the past three weeks and needs to be monitored closely.

Feeder Cattle
Short Term: Down
Long Term: Down
Opening Call: 10-30 Higher

Feeder cattle futures closed Friday mixed, with deferred contracts receiving a boost from sharply lower corn prices. we should see some follow through buying, as traders prepare for lower corn prices into the new crop time frame. Corn prices have actually firmed some in overnight trade, which may allow for some two sided trade in the feeders. The cash index broke out of its’ sideways consolidation to the downside on Thursday and Friday, with the index now more than 1.00 below the front month futures. The front end cash may continue to struggle until we start seeing positive closeouts out of the feedlots.