Corn                                            Estimated Fund Position
Short Term:Down                   Net Long Futures and Options: 206134
Long Term: Down                   Change: +12000
Overnight Trade: Z +6 @7:30 AM

The December corn is trading above the 40-day moving average for the first time since early September, which makes the $7.75 area the next upside objective. The news is improving, which is either a cause or a symptom of the higher prices, but either way there is growing optimism that we will see exports improve soon since the rest of the world is running out of corn. Gulf basis improved yesterday, and it will have to in order to compete with the cattle feeding regions of the US.

Wheat                                         Estimated Fund Position
Short Term: Up                         Net Long Futures and Options: -7993
Long Term:Up                           Change: +3000
Overnight Trade: Chicago: Z +11 KC: Z +9 @7:30 AM

The December KW closed back above the 50-day moving average yesterday even though we had a poor close. Hope is growing once again that we will see more export business turn to the US. It is interesting that the news stories improve when we are at the bottom of the trading range, then they start to turn negative when we are at the top. Right now look for the December KW to move up to the $9.25 - $9.30 area to begin testing the upper bounds of the range.

Soybeans                                    Estimated Fund Position
Short Term: Down                    Net Long Futures and Options: 150974
Long Term: Down                     Change: +10000
Overnight Trade: X +3 @7:30 AM

Yesterday the November soybeans closed above the 9-day moving average, but we haven’t seen two in a row in over a month. It will take a positive close today to convince short traders to become more aggressive with liquidation. We obviously have great demand, production is still a major unknown, and money flow has been a negative factor, but putting a couple positive closes in a row together would probably put the money flow back in favor of the bulls.

Live Cattle
Short Term: Up
Long Term: Up
Opening Calls: 10-30 Higher

Live cattle futures closed moderately higher on Thursday, with most months closing above their 50 day moving average. Choice cutouts have risen 5.50 in the past week, providing additional leverage for cattle feeders to hold to their higher asking prices. Packers have been slow to the table this week, but all indications are that if they want inventory, they are going to have to pay up. Report estimates are for 3% less on feed, 15% lower placements and 10% lower marketing. Nine fresh deliveries were all demanded right away.

Feeder Cattle
Short Term: Up
Long Term: Up
Opening Call: Mixed

Feeder cattle futures settled modestly lower on Thursday, pressured by sharply higher corn and supported by the deferred live cattle strength. Overnight trade has been two sided, with a slightly higher bias. This afternoons’ report is expected to be bullish on lack of September placements. Corn is firmer again in overnight trade, and is within reach of recent highs. The premium to cash in the feeder complex, may be enough ahead of the report.