Corn                                        Estimated Fund Position
Short Term: Up                    Net Long Futures and Options: 190823
Long Term: Up                     Change: +3000
Overnight Trade: Z Unch @7:30 AM

The corn spent most of yesterday’s session lagging behind the wheat and corn, but ended the session on a strong note. The market has been quiet so far today, but did make a new high for the move and it still looks like the December and March contracts are headed for a test of the October high at $7.76. Keep one eye on the financial markets today. Pressure in the stock market, gold, and silver may weigh on the grains as we move through the session.

Wheat                                        Estimated Fund Position
Short Term: Up                        Net Long Futures and Options: -16005
Long Term:Up                          Change: +4000
Overnight Trade: Chicago: Z -1 KC: Z -1 @7:30 AM

Wheat futures came alive yesterday and blew through the 40 and 50-day moving averages. Growing conditions in the HRW Belt are horrible and prices keep rising in Russia, which leads to hopes of better exports. The market hasn’t taken out yesterday’s high yet, but eventually we will see the front months of the wheat back at the top of the channel. The new crop July KW is already near the recent highs and new highs for the move are likely, because the crop isn’t getting any better.

Soybeans                                   Estimated Fund Position
Short Term: Up                         Net Long Futures and Options: 90779
Long Term: Down                    Change: +6000
Overnight Trade: F -4 @7:30 AM

Soybean oil seems to be on everyone’s mind. The huge export sales and record net short fund position have traders thinking about a big short covering rally. For the January soybeans a move up to the $15.00 level looks likely, at that point we will have to see some fresh demand to keep the market moving. A break today caused by the outside markets would be a good buying opportunity.

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

Live cattle futures closed narrowly mixed on Tuesday, reversing midmorning strength along with weakness in equity markets. Spillover selling from weaker feeders also affected the market. Cash news, since Mondays’ trade in Texas has been nonexistent. Bids and asking prices remain a good $4.00 apart. Overnight trade is recovering from early weakness, with most months trading near .20 higher for the session. Slaughter rates remain slow, with meat sources reporting slowing demand. Open interest continues to rise, in spite of the liquidation going on in the December contract.

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

Feeder cattle futures closed moderately lower on Tuesday, with double digit gains in the corn weighing on the market. Overnight trade has been two sided, with current prices backing off .20-.40 in the front months. Corn prices are near steady, holding on to the previous days’ gains. Dryness in southern winter wheat areas is affecting the demand on grazing calves. If we don’t see improvement soon, these cattle will be heading into feedlots at lower prices.