Corn                                Estimated Fund Position
Trends – December Contract
Short Term:Down            Net Long Futures and Options: -219799
Long Term: Down            Change: -12000
Overnight Trade: Z +2 @7:30 AM

The December corn took out the pre-report low yesterday then posted another new low for the move overnight. News that China rejected a load of US corn due to concerns about an unapproved GMO was probably the worst news of the day and there is fear that more rejections will add to the bearishness of the market. The easiest way for the corn to keep ending stocks from ballooning is large export sales, so any interruption is very negative. The most positive aspect of the market is the divergence in the technical indicators, which suggests selling enthusiasm is waning.

Wheat                               Estimated Fund Position
Trends – December Contract
Short Term: Down            Net Long Futures and Options: -92715
Long Term: Down             Change: -1500
Overnight Trade: Chicago: Z +4 KC: Z +3 @7:30 AM

The wheat failed to hold yesterday’s early gains and ended up closing very poorly. We have seen a lot of action like that recently so it makes me very suspicious of the overnight strength. Paris Milling Wheat is still at the top of the trading range, which seems supportive, but we are likely going to lose another Egyptian wheat tender because the French still have us beat on freight. The synopsis of the wheat market is the same as it has been for weeks; the market is oversold, but bottom picking is dangerous.

Soybeans                         Estimated Fund Position
Trends – January Contract
Short Term: Up                 Net Long Futures and Options: 78224
Long Term: Down             Change: +4000
Overnight Trade: F -2 @7:30 AM

The January soybeans posted a solid recovery yesterday and for a while overnight. Export inspections were record large since soybeans are being shipped as fast as possible, which is keeping basis levels firm and keeping some interest in the old crop futures. This week we will find out if traders are more concerned with the current export pace or the idea that sales will come to an end as the S. American crop becomes available.

Live Cattle
Short Term: Down
Long Term: Up
Opening Calls: 10-30 Lower

Live cattle futures closed sharply lower on Monday, with most contracts closing at or below key longer term moving averages. Boxed beef price and demand weakness over the past week are seen as key fundamentals for the decline. Show lists were smaller overall, with our list unchanged but carrying 38% over from a week ago. Overnight activity has been softer throughout the session but resting on its daily highs as we write. Technical damage has taken place, which will encourage more aggressive pricing strategies on any recovery effort.

Feeder Cattle
Short Term: Down
Long Term: Down
Opening Call: 20-40 Lower

Feeder cattle futures closed moderately to sharply lower on Monday, in spite of double digit losses in the corn futures. Spillover weakness from the live pit, along with recent weakness in the cash index brought new sellers into the fold. Overnight weakness continues, with a modest rebound in corn values adding to the pressure. Expectations that a big placement number could show up in Friday’s report is another factor being discussed.