Corn                                              Estimated Fund Position
Short Term:Down                      Net Long Futures and Options: 42661
Long Term: Down                      Change: +10000
Overnight Trade: K +1/4 Z +1 @7:30 AM

The corn has traded both sides of unchanged in relatively quiet pre-report trade. Yesterday’s gains were very good and would be an indication that the market is trying to bottom, if it were not for the fact that we have a report out today. Traders are generally looking for a big jump in ending stocks, and if that doesn’t happen there is a good chance the May contract makes a quick return to $7.00.

Wheat                                            Estimated Fund Position
Short Term: Down                       Net Long Futures and Options: -39547
Long Term: Down                        Change: -1500
Overnight Trade: Chicago: K -5KC: K -5 @7:30 AM

There were freezing temperatures in a significant part of the HRW Belt overnight, but it will take time to determine if there was any damage. The fact that the market hasn’t been able to move higher is a good indication that speculators aren’t too concerned about freeze damage. Traders are probably more concerned about the fact that USDA hasn’t confirmed any sales of wheat to China. The $7.50 area will be key resistance in the May KW today. The bulls need a close above that level to keep the upward momentum going.

Soybeans                                      Estimated Fund Position
Short Term: Down                      Net Long Futures and Options: 53287
Long Term: Down                       Change: +6000
Overnight Trade: K -1 X-1 @7:30 AM

The beans made a good bounce yesterday, but saw no follow through buying overnight. Traders are obviously waiting for the report to make their next move. My favorite number to watch today will be the residual usage figure. That is what USDA changes when they don’t know what else to do and occasionally they even print a negative number even though that defies logic. If ending stocks end up lower, the May contract will quickly return to $14.30.

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

Live cattle futures closed mixed on Tuesday, with April moderately higher and deferred contracts modestly lower. Cash trade is yet to develop, with April futures now a full 2.00 below last weeks’ southern cash trade. We expect that firmer cash will be hard to come by, unless futures are able to rally from current support levels. Outside influences are narrowly mixed, with the Dollar and equities modestly higher this morning. Key support in the April is near 125.70 and then 124.65.

Feeder Cattle
Short Term: Up
Long Term: Down
Opening Call: 30-50 Lower

Feeder cattle futures closed narrowly mixed on Tuesday, with overnight trade softening .50-.70 heading into this mornings’ grain report. We hear rumblings of much higher March placements vs a year ago. It seems possible considering that last year was a four year low in placements. Near term price is likely to reflect the supply demand numbers to be released at 11 am this morning. Yesterday’s strength in the corn spilled over into new crop, which could pressure deferred feeders if we see follow through.