Corn Estimated Fund Position
Short Term:Down Net Long Futures and Options: 71385
Long Term: Down Change: -40000
Overnight Trade: K -32 Z -3 @7:30 AM
Old crop corn is still getting crushed by the surprisingly large quarterly stocks estimate. USDA has been notorious for seemingly random quarterly stocks estimates and that are either shockingly high or low and this time we got one on the high side. If you believe the numbers then our animals didn’t eat much during the second quarter, but who know what will happen during the 3rd quarter. The things to watch this week will be the basis levels and the spread trade. If we are back to bull spreading, especially between the May and July contracts, then it tells us that supplies are still hard to come by. In the meantime, there is no way to describe the charts other than bearish.
Wheat Estimated Fund Position
Short Term: Down Net Long Futures and Options: -61651
Long Term: Down Change: -12000
Overnight Trade: Chicago: K -8 KC: K -6 @7:30 AM
The wheat market is getting sucked lower by the corn. The wheat numbers weren’t market movers, we have seen a couple weeks of good export sales and crop condition ratings are still horrible, so there are actually some reasons for strength in the wheat. The problem is that wheat is still very dependent on feed usage to keep stocks in check and those horrible crop conditions are improving, so if the corn is under pressure there isn’t much hope for the wheat. Traders will be looking for $7.00 in the July KW.
Soybeans Estimated Fund Position
Short Term: Down Net Long Futures and Options: 78172
Long Term: Down Change: -15000
Overnight Trade: K -14 X-5 @7:30 AM
The May soybeans fell to the lowest level since early January thanks in part to the corn stocks figure and the higher than expected soybean stocks estimate. I suspect that this price break will attract some fresh export demand, which will send the beans back to the top of the trading range, but it will take a little time to get nerves settled down following Thursday’s plunge. Be patient picking a bottom.
Short Term: Up
Long Term: Down
Opening Calls: 20-40 Higher
Live cattle futures closed with triple digit gains on Thursday, supported by a $2-3 rise in the cash trade. For the week April live cattle were up 2.75. A moderately bearish hog and pig report could limit the follow through gains in the fat cattle market. Today will be spent analyzing this weeks’ show lists and whether domestic demand is ready to show improvement. Look for any pullbacks to be well supported in this market. Open interest was up more than 4,000 contracts on the rally.
Short Term: Up
Long Term: Down
Opening Call: 40-60 Higher
Feeder cattle futures finished limit up on Thursday, with April gaining 5.35 in the shortened four day trading week. Additional weakness in overnight corn prices should give feeders a lift on their opening bell. The .70 drop in old crop corn values since Wednesday should go a long way in supporting cash and futures in the feeders. Some reports showed cash yearlings trading as much as $10 per hundred weight higher than a week ago.