Corn                                                     Estimated Fund Position
Short Term: Up                                 Net Long Futures and Options: 208846
Long Term: Up                                  Change: -6000
Overnight Trade: Z -4 @7:30 AM

The directionless trade continues in the corn. Traders are simply waiting for Friday’s report. The average trade guess calls for a 2 billion bushel cut in corn production and new crop ending stocks to be cut to 651 million. Dips in price will attract more demand, which is something we can’t have until more is known about the size of the crop.

Wheat                                                Estimated Fund Position
Short Term: Up                                 Net Long Futures and Options: 13569
Long Term:Up                                  Change: -2000
Overnight Trade: Chicago: Z-11 KC: Z -12 @7:30 AM

Wheat traders were disappointed that the Russian’s didn’t ban wheat exports so the market sold off overnight. The market is still stuck in a sideways pattern and the drop overnight did nothing to change that. I’m a little surprised that the average trade guess calls for a small increase in new crop wheat ending stocks considering how much corn production will be lost and how much extra wheat feed usage there could be. This could be setting us up for a bullish surprise.

Soybeans                                             Estimated Fund Position
Short Term: Down                              Net Long Futures and Options: 183709
Long Term:Up                                      Change: -6000
Overnight Trade: X -4 @7:30 AM

Soybeans have been under pressure this week due to ideas that the weather has/will improve enough to salvage some of the bean crop. Judging by the percentage of poor to very poor soybeans, I don’t think that is a given. Price breaks will only attract more demand and basis levels were strong yesterday, which is a good indication that is happening. Buy breaks.

Live Cattle
Short Term: Up
Long Term: Up
Opening Calls: 40-80 Higher

Live cattle futures closed narrowly mixed on Tuesday, but got a strong boost overnight, as 66 of the 71 retenders from Monday were demanded. There were 10 fresh deliveries in Tulia, but the August contract led the overnight rally, gaining well over 1.00 as we write. The bull spreading and cash enthusiasm received additional support from sharply higher cutouts on Tuesday. Cash asking prices are firming to the $121-$122 level at midweek. Outside markets are leaning toward a risk off day.

Feeder Cattle
Short Term: Up
Long Term: Down
Opening Call: 40-80 Higher

Feeder cattle futures closed steady to .22 higher on Tuesday, supported by weaker corn prices and additional rains in the forecasts. Thoughts that beneficial rains could be headed for wheat  pasture country will have follow up forecasts monitored closely. Overnight corn values are modestly lower, adding to the support from the fat futures. Feeders remain range bound heading into Friday’s grain report.