Schwieterman: More losses for cattle futures

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Corn                                             Estimated Fund Position
Trends
Short Term:Down                     Net Long Futures and Options: 39103
Long Term: Down                     Change: +6000
Overnight Trade: H -1 @7:30 AM


Corn futures closed higher yesterday, but haven’t seen any follow through buying yet. So far it looks like we are set for another day of consolidation. Good ethanol production figures could support the market today, but weakness in the energy markets will hold the corn back, which is yet another reason to expect sideways trade today. The March contract needs to have a close above $7.04 or below $6.87 in order to get some direction in this market.

Wheat                                           Estimated Fund Position
Trends
Short Term: Down                      Net Long Futures and Options: -66078
Long Term: Down                       Change: +2000
Overnight Trade: Chicago: H -4 KC: H -4 @7:30 AM


The wheat posted decent gains yesterday, but with just an inside day on the chart, it doesn’t give one much confidence in a move higher. It will at least take a positive close today to get traders thinking about short covering. In the meantime there is still talk of good export business, which should support the market. We are also contending with our winter weather event, which is providing moisture to the HRW Belt, but for Garden City, the snowfall totals seem to be lagging behind the forecasts, but they day isn’t over yet.

Soybeans                                       Estimated Fund Position
Trends
Short Term: Up                              Net Long Futures and Options: 115075
Long Term:Up                                Change: +4000
Overnight Trade: H +2@7:30 AM


The March soybeans still haven’t been able to push through $15.00. If it hasn’t happened by tomorrow morning we will probably see a sell off. Argentine weather is still threatening and demand in the US is strong, which should keep the market moving higher, but if we don’t see new highs soon the technical traders will put pressure on the market regardless of the fundamental news.

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


Live cattle futures closed with triple digit losses on Wednesday, as liquidation of positions in many markets was the theme of the day. The cattle did manage to close well off of session lows, but put in new lows for the move in the active April contract. Some very light cash trade was seen in Texas at the $123 level, which is steady with week ago trade. Offers in Kansas and northern feedlots remain $126+, as they try to withstand damage from the ongoing winter storm. Friday’s on feed report should be supportive, with estimates of 93.8% on feed, 100.3% placed and 104.7% marketed.

Feeder Cattle
Trends
Short Term: Down
Long Term: Down
Opening Call: 20-50 Higher


Feeder cattle futures exceeded the weakness in the fats on Wednesday, with well over 200 point losses in the front four months. Limit down trade was seen late in the session, before a modest recovery took place. Contract lows posted a week ago today remain intact, with overnight trade showing a moderate recovery effort. Overnight corn values are off a couple cents, adding to the positive trade in fat market for support. Fat feeder spreads have been going against seasonal tendencies that favor feeders.



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