Corn                                               Estimated Fund Position
Short Term:Down                      Net Long Futures and Options: 107852
Long Term: Down                      Change: -10000
Overnight Trade: H +4 @7:30 AM

The corn is rebounding a little overnight, but there isn’t any change in the news that would suggest a change in the trend. Seeing a short covering rally through the day is likely, but at this point it will take a close above $7.15 or maybe even $7.35 in the March contract to convince short traders they are really wrong. As usual buyers are waiting to see if exports ever improve before jumping in.

Wheat                                           Estimated Fund Position
Short Term: Down                      Net Long Futures and Options: -55922
Long Term: Down                       Change: -5000
Overnight Trade: Chicago: H +4 KC: H +3 @7:30 AM

The recovery effort so far in the wheat is rather poor, especially considering the wheat has had the most bullish news lately. Exports are improving and crop conditions are not, but the perception right now is that supplies are adequate and the corn market is acting as an anchor on the market as well. The next support area in the March KW is at $8.22 and the bearish attitude in the grain markets will have to change to avoid a move down to that level next week.

Soybeans                                      Estimated Fund Position
Short Term: Down                      Net Long Futures and Options: 79013
Long Term: Down                       Change: -9000
Overnight Trade: H +12 @7:30 AM

The March soybeans have gotten back most of yesterday’s losses, but after yesterday’s close below the 62% retracement and the market being inundated with cancellations by the Chinese, we probably aren’t quite done with the selling pressure. The $13.90 area is a likely downside target for the March contract and somewhere between $13.90 and $13.50 the Chinese will probably return to buying US soybeans. In the meantime, picking a bottom will be dangerous.

Live Cattle
Short Term: Up
Long Term: Up
Opening Calls: 20-30 Lower

Live cattle futures saw some pressure into the close on Thursday, with closing prices off .52-.95 out thru the August contract. Some moderate cash trade took place in Kansas and Texas at the $126 level, with most feedlots remaining priced at $128. There were 31 new deliveries posted after the close, with no retenders. Cattle on feed estimates are 92-93% on feed, 91% placed and 100% marketed. Weights were up again and remain well above year ago levels. The extra weight is helping to offset the shortage of numbers and solid exports.

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

Feeder cattle futures closed sharply lower on Thursday, with the lead January down 1.20 at settlement. For the week, January is down a full dollar in spite of the 30 cent drop in March corn values. If we see a solid rebound in corn values the feeders could see a significant correction. Outside market influences this morning suggest more concerns over fiscal cliff potential, which is pressuring the equities and leading to some flight to quality buying in bonds. The sharply lower equities will add pressure to cattle.