Corn Estimated Fund Position
Short Term:Down Net Long Futures and Options: 174539
Long Term: Down Change: -10000
Overnight Trade: H -3 @7:30 AM
There were no changes to the US corn supply and demand numbers and the changes to the world numbers were minuscule. The reaction to the report has been two sided trade inside a narrow range. Corn traders have no new fresh news to trade, and probably won’t until the January report unless we see an improvement in the exports. What that means for the market is another month of range bound trade. Look for a test of the November low and then a bounce back.
Wheat Estimated Fund Position
Short Term: Down Net Long Futures and Options: -24704
Long Term: Down Change: -3000
Overnight Trade: Chicago: H -7 KC: H -3 @7:30 AM
There was one change to the US wheat supply and demand tables and that was a cut in the export estimate. It was probably warranted, but I was a little surprised to see it happen in the December report, since this tends to be the dullest report of the year. The higher ending stocks that were the result of the cut in exports will give traders an excuse to sell and could result in weakness in Kansas City vs. Chicago since it is the HRW exports that were adjusted the most. Dry weather in the HRW Belt will remain a supporting factor, but a move down to $8.85 in the March KW is likely.
Soybeans Estimated Fund Position
Short Term: Up Net Long Futures and Options: 82661
Long Term: Down Change: +3000
Overnight Trade: F+5 @7:30 AM
The soybean numbers were friendly, but expected. Crush was increased by 10 million and ending stocks were cut to 130 million, which was the average trade guess. Meal and oil exports were increased significantly, but there was no change to the soybean export estimate, which was a little surprising. Today’s action will determine if the correction is over or not. A poor close will suggest further weakness and a strong close with make $15.03 the next objective for the January contract.
Short Term: Down
Long Term: Up
Opening Calls: 20-40 Lower
Live cattle futures closed moderately lower on Monday, ahead of first notice for delivery on the December contract. We ended up getting more deliveries than expected, with 112 total issues and dates partially through October 8th. The heavy deliveries are pressuring the front months, in spite of higher cutouts and an aggressive slaughter of 127,000 to start the week. Most of the deliveries are expected to be retendered today, with no true stoppers surfacing at this time. Show lists were steady from a week ago, with bigger numbers in Texas offset by smaller lists in Kansas.
Short Term: Down
Long Term: Down
Opening Call: Mixed
Feeder cattle futures posted another round of triple digit gains in the front months, as lower trending corn prices and improving cash levels supported. This morning’s supply/demand report on the grains should key feeder cattle trade for the day. Overnight corn prices have continued lower, with March taking out Monday’s low by a tick. Feeders are overbought on the charts and due for a correction, but will find willing buyers on any breaks as long as the corn remains on the defensive.