Corn Estimated Fund Position
Trends
Short Term: Up Net Long Futures and Options: 241401
Long Term: Up Change: +16000
Overnight Trade: Z +2 @7:30 AM
News is limited. December corn made a new high for the move overnight. As expected crop condition ratings declined another 2 points to 24% Good to Excellent. The crop is still shrinking, so prices should keep rising until conditions stabilize. The forecasts are warm and dry so we have to expect conditions to decline in the next report as well. Plan on choppy/higher trade.
Wheat Estimated Fund Position
Trends
Short Term: Up Net Long Futures and Options: 26086
Long Term:Up Change: +4000
Overnight Trade: Chicago: Z-2 KC: Z +1 @7:30 AM
Production cuts in eastern Europe could end up making the wheat balance sheets very bullish. Our competition in the export market is shrinking and our need for feed wheat is increasing. Sometimes it seems that the US is the supplier of last resort, which is generally negative to prices, but when you have the last wheat in the world it is very bullish. $9.50 is still the key resistance area for the December KW. A close above that level would be very bullish.
Soybeans Estimated Fund Position
Trends
Short Term: Up Net Long Futures and Options: 230629
Long Term:Up Change: +11000
Overnight Trade: X +12 @7:30 AM
The November soybeans still haven’t reached last week’s highs, but the market is headed that way. The condition ratings declined 2 points to 29% Good to Excellent, which was expected and like the corn we have to expect another decline next week. One story to watch is the Indian monsoon. If world vegetable oil prices start to pick up it will only make the fundamentals more bullish for the US soybeans. We should see $17.00 in the November contract soon.
Live Cattle
Trend
Short Term: Up
Long Term: Up
Opening Calls: Mixed
Live cattle futures posted modest to moderate gains on Monday, as short covering and higher cutouts provided a boost. Show lists appear to be smaller across the board, with our list down significantly from week ago and year ago levels. Packers started the week with an aggressive kill of 129,000. August continues to hold a large premium to last weeks’ cash highs of $115. It appears that cash has a chance to make some significant progress over the next few weeks. Exports remain active and school food programs are about to get started for the year.
Feeder Cattle
Trends
Short Term: Down
Long Term: Down
Opening Call: Mixed
Feeder cattle futures closed moderately lower on Monday, with pressure stemming from sharply higher corn prices and new contract highs. Overnight corn values are modestly higher, with feeders both sides of unchanged. Country prices seem to be firming slightly over the past few days, as replacements become harder to come by. We continue to like fats vs feeders, but are becoming less enamored with the short side of the feeders, due to its’ inability to break in the face of record corn prices. Remain hedged, with options as the preferred tool.
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