Corn                                                    Estimated Fund Position
Short Term:Down                            Net Long Futures and Options: 151565
Long Term: Down                            Change: +11000
Overnight Trade: Z +1 @7:30 AM

The corn market performed well yesterday and the March contract peaked out at the 40-day moving average. Meanwhile the December contract is trading at the $7.40 area, which is at the bottom end of the expected trading range for the upcoming option expiration. I look for the December contract to chop between $7.40 and $7.50 for the rest of the week.

Wheat                                                 Estimated Fund Position
Short Term: Down                            Net Long Futures and Options: -17776
Long Term: Down                             Change: +1000
Overnight Trade: Chicago: Z +1 KC: Z -1 @7:30 AM

The wheat market was rather lackluster yesterday and isn’t much better today. The market is consolidating at the bottom of the trading range and so far we don’t have any news that will push the market in either direction. US wheat conditions came in at 34% Good to Excellent, which was expected. The poor wheat, as we know, is in the HRW Belt, which means that Kansas City should be favored in the spreads.

Soybeans                                             Estimated Fund Position
Short Term: Down                             Net Long Futures and Options: 94054
Long Term: Down                              Change: +4000
Overnight Trade: F -7 @7:30 AM

The soybeans posted solid gains yesterday, but have given them up today. The soybean market still hasn’t confirmed a bottom, so we should at least look for a retest of Friday’s low. Demand is still very strong, the market has that going for it, but traders are still concerned about higher production in the January report, the lack of threatening weather in S. America, and fund liquidation. Demand will keep the market supported, but we can’t move consistently higher without speculative buying.

Live Cattle
Short Term: Down
Long Term: Down
Opening Calls: 10-20 Higher

Live cattle futures closed moderately higher on Monday, supported by bullish on feed numbers and stronger cash from the previous week. Overnight trade is firmer, with December trading in narrow range between the 50 and 100 day moving averages. A close above the 100 day would likely jumpstart additional speculative buying. Packers are buying for a full kill next week, with new contracts not available until the following week. We could see one more week of stronger cash and futures before those contracts hit the market.

Feeder Cattle
Short Term: Down
Long Term: Down
Opening Call: 10-30 Lower

Feeder cattle futures closed moderately higher on Monday, in spite of the higher corn prices for the day. Corn is steady to higher in overnight trade and the cash index is on its’ recent lows. Feeders are softer, with weaker cash outweighing the firm feel in the live cattle market. We continue to expect solid selling to enter the market on any reasonable correction to the upside. A post holiday slide appears to be a good possibility.