Corn                                      Estimated Fund Position
Trends – December Contract
Short Term:Down                 Net Long Futures and Options: -200991
Long Term: Down                 Change: +4000
Overnight Trade: Z +1 @7:30 AM

The corn market was very quiet overnight. The December contract has traded sideways into trend line resistance, which suggests that the path of least resistance is lower from here, at least until the market gets to $4.35. I still don’t expect much activity until we get a time line for the release of the  next supply and demand report.

Wheat                                    Estimated Fund Position
Trends – December Contract
Short Term: Up                      Net Long Futures and Options: -58219
Long Term:Up                        Change: -1000
Overnight Trade: Chicago: Z +3 KC: Z +3 @7:30 AM

The December KW is testing last week’s high again. I am still suspicious of a deeper correction, but it isn’t coming. The fundamental set up of the HRW market is quite bullish so breaks are for buying if we get them. The bull spreads should work as well due to the upfront demand and better conditions in the HRW Belt for the new crop.

Soybeans                              Estimated Fund Position
Trends – November Contract
Short Term: Down                Net Long Futures and Options: 91218
Long Term: Down                 Change: -3000
Overnight Trade: X +8 @7:30 AM

Soybean market is set up for another day of sideways trade. Basis levels are firm, which is supportive in the short run, but yield reports are good, which will serve to cap rallies, especially in the deferred contracts. Expectations were for another week of large export sales had we been given a report, but we are still flying blind.

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

Live cattle futures settle moderately lower on Wednesday, with front month bull spreading remaining a feature. Overnight saw more bull spreading, with the October contract equaling the highs since August 21st. There were 10 fresh deliveries against the October contract, with dates through the 7th of August. We should continue to see hedges rolled out of the October and into the December as the month progresses. Cash trade could start to take shape today, if packers are willing to bring more money to the table. There seems to be some firming interest from at least one major. The $128-$129 asking prices appear fairly priced, with the October futures at 128.40.

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

Feeder cattle futures closed mixed to mostly lower on Wednesday, with firmer corn values and weaker live futures weighing on the market. Corn is firmer again in overnight trade and feeders are feeling some additional pressure in spite of better live cattle trade. We believe that feeder prices are vulnerable to a more extended break, considering their extreme overbought condition on daily, weekly and monthly charts. Weekly jobless claims surged due to the Government shutdown. Equity markets surged to new overnight highs on the news. Go figure…