Corn                                         Estimated Fund Position
Trends
Short Term: Down                 Net Long Futures and Options: 81490
Long Term: Down                 Change: -11000
Overnight Trade: Z Unch N Unch
Opening Calls: Mixed

The December corn is hovering around the $6.00 area and may continue to do so until Friday’s option expiration. The new low for the move yesterday and the downward momentum of the market indicates that a move down to the October low is not out of the question, but it seems that traders will be reluctant to push the market very far from the $6.00 strike price until next week. Fresh news is limited and the outside markets are much quieter to far today, which suggests we will be in for a two sided/consolidation trading day.

Wheat                                        Estimated Fund Position
Trends
Short Term: Down                  Net Long Futures and Options: -85755
Long Term: Down                   Change: -2000
Overnight Trade: Chicago: Z + 1/2 KC: Z +2 1/4
Opening Calls: 1-2 Higher

The December KW made a new low for the move yesterday, but at the same time the Kansas City wheat showed more strength than any other market. The market is consolidating, waiting for fresh news or a major move in the corn. The market is oversold and due for a corrective bounce, but at the moment any bounce would have to be viewed as a selling opportunity.

Soybeans                                    Estimated Fund Position
Trends
Short Term: Down                     Net Long Futures and Options: -20480
Long Term: Down                     Change: -5000
Overnight Trade: F +1 3/4 N +1 3/4
Opening Calls: 1-2 Higher

Technical indicators still suggest that the soybeans should see an upward correction soon, but yesterday’s action proved that one shouldn’t get excited about chasing the soybean market higher. The January soybeans continue to follow the trading channel lower and despite the improved export sales haven’t given any indication that the pattern is about to change.

Live Cattle
Trend
Short Term: Down
Long Term: Up
Opening Calls: Mixed

Live cattle futures reversed early weakness on Monday to close mostly higher on the day. The front end of the market settled nearly 2.00 above their daily lows. Choice cutouts were strong, rising back over the 18.00 premium to the select cuts. With the long holiday weekend approaching, we expect some buying interest to surface today. Our show list was off 30% from a week ago. With packers buying for a full kill week, we expect cash to remain steady at worst.

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

Feeder cattle futures closed moderately to sharply lower on Monday, in spite of the recovery in the fats and double digit losses in the corn futures. Overnight trade is narrowly mixed, with corn trading near steady. Cash index levels fell more than 40 points on Monday, suggesting the possibility of at least a small correction in the feeder complex. A test of the 141.50-142.00 level in the January contract looks doable.