Corn Estimated Fund Position
Trends – December Contract
Short Term: Up Net Long Futures and Options: -150692
Long Term: Down Change: +17000
Overnight Trade: Z -5 @7:30 AM
Despite the strong gains and lower than expected crop condition ratings yesterday, the corn market was unable to move higher overnight. That has basically left us with a double top at the 50% retracement of the last move down and an overbought market. I have read a number of comments from the Pro Farmer crop tour suggesting disappointing yields, but so far the numbers from Ohio and S. Dakota have been outstanding. Crop maturity is definitely a concern and we still have the talk about dry weather, but if the yield estimates don’t start coming in far worse, the bulls aren’t going to have much to go on.
Wheat Estimated Fund Position
Trends – September Contract
Short Term: Down Net Long Futures and Options: -68517
Long Term: Down Change: +3500
Overnight Trade: Chicago: U -4 KC: U -2 @7:30 AM
Guess what? The wheat is still trading sideways. The market has no direction, and probably won’t have any direction, until we see the corn market close above $4.90 or start making new lows. In order to see independent strength the wheat will need more export sales and less rain in the HRW Belt. It looks like the weather is drying out, which could help the July 14 contract, but a number of areas need a little less rain. Selling options seems to be the best course of action right now.
Soybeans Estimated Fund Position
Trends – November Contract
Short Term: Up Net Long Futures and Options: 38153
Long Term:Up Change: +14000
Overnight Trade: X -15 @7:30 AM
The November soybeans were very impressive yesterday, closing at the highest level since mid-June. Concerns about crop maturity, forecasts for dry weather, and strong demand from China are all very supportive to the market. The market is overbought, but the momentum is clearly up. $12.90 - $12.50 is now going to be a good support area for the market and many traders will look to buy breaks as long as there are concerns about crop maturity and an early freeze.
Short Term: Up
Long Term: Up
Opening Calls: Mixed
Live cattle futures closed mostly higher on Monday, with the exception of the lead August contract. Show lists appear smaller overall, with our list actually up about 1% from a week ago. Asking prices are developing near $125 in the south and $202+ up north. Overnight trade has been narrowly mixed, with modest strength on the back of a weaker Dollar. We continue to like this market into the Labor Day time frame. Overall open interest fell another 1,273 contracts on Monday, due to liquidation of the August contract.
Short Term: Up
Long Term: Up
Opening Call: 50-70 Higher
Feeder cattle futures posted moderate gains on Monday and are trading firmer in early morning trade. The ability of this market to rise in the face of the sharply higher corn on Monday was impressive. The fact that corn is giving back 5-6 cents this morning is allowing for follow through buying in the feeders. The cash index leapt more than 2.50 on Monday to close the day at 155.01. Driving across the state of Kansas the past few days, I saw some of the best pasture conditions in many years. Competition for calve and young yearling should continue to be strong.