Schwieterman: European concerns weigh on cattle markets

Corn                                         Estimated Fund Position
Trends
Short Term: Up                      Net Long Futures and Options: 115956
Long Term: Down                 Change: +3000
Overnight Trade: Z +1 N +3/4
Opening Calls: 1-2 Higher

Once again the overnight gains failed to hold during the day session. No one seems to be willing to chase the market higher, but at the same time the $6.46 continues to hold as support. News is limited today and the major market moving factor will be how traders react to the EU’s policy on Greek debt. Until that is known, plan on a directionless day.

Wheat                                        Estimated Fund Position
Trends
Short Term: Up                        Net Long Futures and Options: -71485
Long Term: Down                   Change: -2000
Overnight Trade: Chicago: Z +3 1/4 KC: Z +2 1/4
Opening Calls: 2-3 Higher

The slow grind higher continues in the wheat. World wheat prices seem to have bottomed for the time being, which is supportive to the US markets, and the corn may not be moving higher, but it isn’t moving lower either, which keeps selling pressure at bay in the wheat. Technical indicators are overbought, so a slide could occur at any time, but there is excellent support at the $7.15 area in the December KW contract.

Soybeans                                  Estimated Fund Position
Trends
Short Term: Down                   Net Long Futures and Options: 20796
Long Term: Down                    Change: -3000
Overnight Trade: F +3 N +4 1/4
Opening Calls: 3-5 Higher

Expect to see more consolidation trade in the soybeans as well. Until we get this round of the Greek debt problem behind us, traders probably won’t push the market in either direction. There is very little fresh news, so traders don’t have much else to go on today. A move above $12.50 in the January contract would be bullish, if traders get a reason to buy today.

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

Live cattle futures closed moderately to sharply lower on Tuesday, with April posting triple digit losses. The decline came in spite of sharply higher cutout values and good demand. Weaker equity markets and renewed concerns about Europe were seen as major factors in the selloff. Overnight trade started with follow through weakness, but has rebounded along with equities to trade both sides of unchanged. Cash asking prices remain firm, near the $123‐$124 levels.

Feeder Cattle
Trends
Short Term: Up
Long Term: Up
Opening Call: 10-30 Lower

Feeder cattle futures fell to triple digit losses in the three most active contracts on Tuesday. Weakening technical indicators added to pressure from falling equity markets. Overnight has seen some follow through selling, with some firming action as the morning goes by. Cash index levels are approaching 140.00, leaving deferred feeder contracts carrying a 6‐7 dollar premium to the cash.

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