Corn                                        Estimated Fund Position
Trends
Short Term: Down                   Net Long Futures and Options: 75078
Long Term: Down                   Change: +9000
Overnight Trade: Z + 3/4 N +1/2
Opening Calls: 1-2 Higher

The corn made a decent rebound yesterday, but traded sideways overnight. The outside markets traded both sides of unchanged overnight, which didn’t provide any clear direction for the grain markets. The corn is oversold and due for a bounce, but it will probably take sideways/higher trade in the stock market to make that happen. Fresh fundamental news is lacking at this time.

Wheat                                     Estimated Fund Position
Trends
Short Term: Down                   Net Long Futures and Options: -89620
Long Term: Down                   Change: +1000
Overnight Trade: Chicago: Z +3 1/4 KC: Z +2 3/4
Opening Calls: 1-3 Higher

The wheat gave up all of the early strength yesterday and didn’t manage much of a rally overnight. There isn’t any reason for a rally in wheat unless there is strength in the corn and spread traders are going to use the wheat as the short leg until we see consistent bullish demand news. One good export sales report is a start, but it will take more than that with all the market jitters we are dealing with now.

Soybeans                                Estimated Fund Position
Trends
Short Term: Down                   Net Long Futures and Options: -29522
Long Term: Down                    Change: +4000
Overnight Trade: F +4 1/4 N +2 3/4
Opening Calls: 3-5 Higher

The soybeans held together fairly well yesterday and made a new high for the move overnight. Recent fundamental activity has been supportive, but so far large speculators haven’t gotten involved with the soybeans. The soybean market is set for recovery and if the overnight high is taken out early this morning it will likely generate a good deal of short covering.

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

Live cattle futures closed narrowly mixed on Monday, after posting early triple digit gains. The setback from early strength, have technicians hesitant to buy any strength in this market. Cutout values started the week with a lower tone, creating additional skepticism. Overnight trade has been quiet, with slightly higher lead month and moderately lower on deferred. This week’s show lists are smaller in most of the regions. Ours is down 11% from a week ago.

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

Feeder cattle futures closed moderately higher in all but the March contract. Higher corn values limited gains, after early morning strength. Overnight activity is once again mixed, with strength in the January and modest weakness in the deferred. We continue to expect quietly weaker trade into month’s end. Rallies are expected to find sellers awaiting.