Corn                                             Estimated Fund Position
Short Term: Up                         Net Long Futures and Options: 170097
Long Term: Up                          Change: -7000
Overnight Trade: H +10 @7:30 AM

The March corn completed a 38% retracement on Friday, then managed a mid-range close followed by solid gains overnight. The market hasn’t taken out last week’s high, but we should plan on a test of that level very soon. A new high for the move would put the market back on track for a test of the October high at $7.76. Some good export sales news would make such a move easy, but we are still waiting on that.

Wheat                                        Estimated Fund Position
Short Term: Up                        Net Long Futures and Options: -21442
Long Term: Down                    Change: -5000
Overnight Trade: Chicago: H +11 KC: H+7 @7:30 AM

The forecast is still devoid of moisture for the HRW Belt for the foreseeable future, which should keep speculators interested in the wheat market. There is also word that Egypt purchased US wheat, which would be a big help to the market. Confirmation of that business will be supportive and have traders wondering if Eastern Europe is finally done selling wheat and if our sales will stay strong? Failure to stay above the 50-day moving average on Friday is a concern, but the market has made a decent rebound so far today and a positive close in the corn, wheat and beans would give speculators confidence.

Soybeans                                  Estimated Fund Position
Short Term: Up                        Net Long Futures and Options: 70150
Long Term: Down                    Change: -4000
Overnight Trade: F +18 @7:30 AM

The January soybeans made a new high for the move overnight and once again appear to be headed for the $15.00 level. Export demand is still very good, which is obviously a major supporting factor, and the S. American weather is a major factor as well. Traders will be watching the forecasts closely for any hint of a problem in Brazil. Until the market reaches $15.00 it looks like breaks are for buying.

Live Cattle
Short Term: Up
Long Term: Up
Opening Calls: 20-40 Lower

Live cattle futures closed sharply lower on Friday and down more than 2.00 for the week. Cash trade was lower across the board, with volume of trade extremely limited. Texas saw a few sales at $126, with Kansas only receiving $125. The number of contracts available along with formula cattle could limit cash demand for a second week in a row. We will be monitoring show lists closely as they are released today. A test of the 123.50-124.00 level in the front month looks technically sound on the charts.

Feeder Cattle
Short Term: Down
Long Term: Down
Opening Call: 20-40 Lower

Feeder cattle futures closed with near triple digit losses on Friday, in spite late week struggles in the corn market. For the week, January feeders were off 2.20 and saw short and long term trends turn lower. Double digit gains in overnight corn prices will do nothing to improve the feeder outlook. We expect weakness to last into the latter part of the week.