Corn                                 Estimated Fund Position
Trends – March Contract
Short Term: Up                Net Long Futures and Options: -128067
Long Term: Up                 Change: +3000
Overnight Trade: H +2 @7:30 AM

The March corn traded through the $4.35 ½ resistance overnight, and a close above that level today would look very friendly on the charts. Export sales have been very, very good, which is drawing down stocks and supporting the old crop contracts. Bull spreading should work in the corn in the coming weeks as the old crop stocks get much tighter than was anticipated as few months ago and the negative rhetoric in the new crop continues.

Wheat                              Estimated Fund Position
Trends – March Contract
Short Term: Down            Net Long Futures and Options: -99505
Long Term: Down             Change: +1500
Overnight Trade: Chicago: H +1 KC: H +1 @7:30 AM

The March KW has managed two consecutive positive closes, but that really hasn’t had any impact on the way the chart looks, which is still bearish. There will be some moisture in parts of the HRW Belt this week, but there will still be a large area left dry with very cold temperatures. More importantly, demand has picked up, but so far that hasn’t mattered to the old crop wheat market. There is still a negative bias to the market and hedgers still have to look as selling rallies when we get them.

Soybeans                        Estimated Fund Position
Trends – March Contract
Short Term: Down           Net Long Futures and Options: 103105
Long Term: Down            Change: +4000
Overnight Trade: H +1 @7:30 AM

The soybeans are still consolidating. The bears are hoping for cancellations by the Chinese in order to start another leg lower, and the bulls are just watching the export sales pile up. To me it seems that it is up to the bears to prove their case since we have already sold more soybeans than USDA expected and we are still shipping them out at a very rapid pace. Plan on choppy, volatile trade this week with the export news being the driver.

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

Live cattle futures settle mostly lower on Friday, ahead of the cattle inventory release. For the week April live closed up .47 and narrowed the gap with the lead February contract. Cash trade finally developed well after the release of the inventory numbers. Southern cattle traded no better than $145, with northern beef prices slipping to $232. Cutout values fell significantly for the week, with Friday’s choice cuts off 7.26. The report suggests that numbers will continue to decline into the 3rd quarter of this year. After pulling a majority of the February contracts this week, packers may have to return to a more aggressive buying program.

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

Feeder cattle futures settled moderately higher on Friday, leaving March .55 higher for the week. The cash index backed off .43 on Friday but finished the week up .78 from the Friday before. Overnight corn values put in new highs for the recent move, which may limit some of the bullish enthusiasm that may have been derived from the inventory report. The report appears to be friendly for the feeders and deferred live cattle contracts. We will be monitoring sales this week for signs of a slowdown in numbers from the recent aggressive pace.