Corn                                 Estimated Fund Position
Trends – December Contract
Short Term: Down            Net Long Futures and Options: -207799
Long Term: Down             Change: -6000
Overnight Trade: Z -4 @7:30 AM

The December corn is back to testing the pre-report lows. Strong exports, strong basis, and the winding down of harvest have failed to support the market. The current ending stocks estimate is still below the psychologically important 2 billion level, but traders are still generally content with the amount of corn projected to be available this year. $4.15 ½ is now critical support. Failure at that level would suggest a move down to the $4.00 area as we head into option expiration Friday.

Wheat                             Estimated Fund Position
Trends – December Contract
Short Term: Down          Net Long Futures and Options: -91215
Long Term: Down           Change: -2000
Overnight Trade: Chicago: Z +1 KC: Z +1 @7:30 AM

The December KW spent the night trading positive, but we still don’t have any indication that this market has bottomed. 15 of the past 17 closes have been negative and technical indicators have been oversold the entire month, but we are still waiting on a short covering rally. Perhaps the recent bull spreading in the market is a sign that the market is about to bounce and the Paris Milling Wheat is still trading at the top of the trading range, but neither of those have helped yet.

Soybeans                       Estimated Fund Position
Trends – January Contract
Short Term: Up              Net Long Futures and Options: 74224
Long Term: Down          Change: -10000
Overnight Trade: F Unch @7:30 AM

The January soybeans completed at 62% retracement of the last leg up overnight, so there is some hope of a bounce in early week trading. However, attitudes seem to be very negative at the moment and traders are far more concerned with the bio-diesel mandate being left unchanged and the potential for a large S. American crop than they are with our current export sales pace and potential tightening of our ending stocks estimate.

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

Live cattle futures closed moderately higher on Friday, as the feedlots were rewarded with higher cash in all regions for the week. Packers paid $132 in the south and $208-$209 in northern beef trade. Technical pictures look very supportive and feedlots will be asking at least $134 in the south and $210+ in the north. Strong equity markets continue to support the meats.

Feeder Cattle
Short Term: Up
Long Term: Up
Opening Call: 20-40 Higher

Feeder cattle futures closed moderately higher on Friday and nearly 1.50 higher for the week. Corn prices are continuing to weaken in overnight trade. Cash index levels have actually fallen for the past two days but continue to show underlying strength. We look for a boost in index levels this week, as well as follow through buying in the futures market ahead of on feed report and the holiday break.