Corn                                     Estimated Fund Position
Trends
Short Term: Down           Net Long Futures and Options: 263141
Long Term: Up                  Change: +10000
Overnight Trade: Z -5 N -5
Opening Calls: 5-7 Lower

Yesterday’s reversal higher certainly looks good on the charts. Traders either feel that we will see further production cuts or that it won’t be that easy to slow down demand. To me it appears that it will be the job of the market to make sure prices don’t get weak enough to attract demand and draw down stocks, especially when crop size is still unknown. There was pressure in the corn overnight, but look at a test of yesterday’s low as a buying opportunity.

Wheat                                  Estimated Fund Position
Trends
Short Term: Down            Net Long Futures and Options: -38449
Long Term: Up                  Change: -2000
Overnight Trade: Chicago: Z -5 1/4 KC: Z -9 3/4
Opening Calls: 7-10 Lower

The wheat market made a good rebound yesterday, but that doesn’t change the fact that the wheat will still be dependent on the corn market for any strength. The wheat, especially in Kansas City will be used as the short leg of spreads for a while, due to the big jump in HRW stocks. A close below $8.20 today would make the $7.70 area the next downside target for the December KW.

Soybeans                          Estimated Fund Position
Trends
Short Term: Down           Net Long Futures and Options: 133345
Long Term: Up                 Change: -8000
Overnight Trade: X -6 N -8 3/4
Opening Calls: 7-10 Lower

The $14.00 support failed yesterday and the $13.84 support failed overnight, so it doesn’t look good for the November soybeans. In all likelihood the $13.50 area is now the next downside objective unless traders become convinced that USDA is wrong about their yield estimate, and so far it doesn’t look like anyone is doubting it too much.

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

Live cattle futures got off to a good start this week, with the lead October contract continuing to lead the way higher. Show lists are smaller this week, with our list showing a decline of 17% in western Kansas. Boxed beef prices also showed strength, with triple digit gains in choice and select cuts. October’s premium to December, this early in the trade indicates a broadening of supplies into the fourth quarter. We like using strength brought on by the October to establish hedges in the December.

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

Feeder cattle futures followed the fats higher on Monday, in spite of the higher trade in the corn futures. Key resistance in the October feeders is near Friday’s high of 136.27. Overnight feeders are firm, with support from a decline in corn values and continuing strength in the live market. Outside markets are mixed, with both the Dollar and equities trending towards lower prices. Selling feeders on rallies below Friday’s high continues to look attractive.