Corn                                           Estimated Fund Position
Short Term:Down                   Net Long Futures and Options: 189134
Long Term: Down                   Change: -14000
Overnight Trade: Z +7 @7:30 AM

Yesterday the December corn held just above last week’s low and has managed a decent rebound since then. However, unless the market makes a quick turn around and closes back above $7.50, the market is still in jeopardy of falling back to the September low of $7.05. What this market needs is some fresh demand news. Until that happens it is hard to expect consistent gains.

Wheat                                           Estimated Fund Position
Short Term: Down                     Net Long Futures and Options: -11993
Long Term: Down                      Change: -4000
Overnight Trade: Chicago: Z +8 KC: Z +7 @7:30 AM

So far the December KW has held at the bottom end of the trading range. The market has made a small rebound, but speculators won’t get excited until the we see a close back above $9.00. News is limited and the wheat market will likely take directional cues from the corn and soybean markets.

Soybeans                                      Estimated Fund Position
Short Term: Down                      Net Long Futures and Options: 132974
Long Term: Down                       Change: -9000
Overnight Trade: X +10 @7:30 AM

The close below $15.00 in the November contract looks bearish. $14.50 is the next major support and a move to that level is likely as long as traders are convinced that USDA will increase the production estimate in the November supply and demand report. In the mean time look for more large export sales to the Chinese.

Live Cattle
Short Term: Down
Long Term: Down
Opening Calls: 20-40 Higher

Live cattle futures closed moderately higher on Monday, supported by sharply higher cutouts and a discount to recent cash. Overnight activity saw bull spreading reenter the market, with gains of more than .50 in the October contract. The strength in the front month should bolster feedlot resolve in higher asking prices. Show lists appear smaller overall, as front end supplies remain very manageable. A test of the 50 day moving average in the December futures appears to be the next target.

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

Feeder cattle futures posted triple digit gains on Monday, boosted by sharply lower corn values. Overnight corn prices have recovered half of their Monday selloff, which has created modest selling in the feeders. Range bound trade between 143.50 and 146.50 in the November contract is expected to remain intact. The expectations of lower September placements in this Friday’s report should add underlying support.