Corn                                               Estimated Fund Position
Short Term:Down                       Net Long Futures and Options: 82919
Long Term: Down                      Change: -1500
Overnight Trade: H -1 @7:30 AM

The corn market is slipping lower to start the week. The overnight low is just above the 62% retracement of the January rally, so we do have some reason for support at the $7.04 - $7.05 area. With the supply and demand report behind us traders are back to watching S. American weather and US demand numbers. So far it looks like it will be a two sided, consolidation type trading day.

Wheat                                               Estimated Fund Position
Short Term: Down                         Net Long Futures and Options: -61625
Long Term: Down                          Change: Unch
Overnight Trade: Chicago: H -3 KC: H Unch @7:30 AM

The failure to hold gains Friday following the surprisingly friendly supply and demand report is disappointing, but not particularly surprising. The pressure in the soybeans and lack of strength in the corn was bound to weigh on the wheat market. 691 million bushels of ending stocks was better than expected, but still a large figure and there is no immediate threat of tight supplies unless exports ramp up soon. Look for directionless trade today.

Soybeans                                           Estimated Fund Position
Short Term: Down                           Net Long Futures and Options: 80393
Long Term:Up                                   Change: -11000
Overnight Trade: H -14 @7:30 AM

The soybeans are seeing follow through selling following Friday’s melt down. The US supply and demand numbers were not negative, but traders were disappointed that the Argentine production figures weren’t cut more. Forecasts for Argentina seem to be a bit wetter as well, which is adding to the pressure. Another week of strong exports, statistically speaking, should offset concerns about a larger than expected Argentine soybean crop. However, the momentum of the market is clearly down, which makes $14.21 and $14.04 possible downside targets for the March contract.

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

Live cattle futures imploded on Friday, leaving the April contract 1.40 lower for the day and off 2.65 for the week. Steady cash trade was seen across the board, with cutout values continuing to falter. We expect to see continued tight show list numbers to combat the reduced chain speed of packing plants. Open interest was off more than 3,500 contracts on Friday, with hedge liquidation and long spec liquidation noted. There were 25 new deliveries posted against the February contract, all in Dodge City.

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

Feeder cattle futures finished a disappointing week on Friday, with March off 2.20 for the day and 3.82 for the week. The weekly decline came in spite of the March corn losing 26 cents for the same period. Overnight corn values are modestly lower, with outside influences showing a negative bias. It will be very difficult for feeders to garner much strength unless the fat cattle market improves. Losses are just too great for cattle feeders to pay up in the sale and continue to bet on the come.