Corn                                           Estimated Fund Position
Short Term:Down                   Net Long Futures and Options: 14851
Long Term: Down                   Change: +2000
Overnight Trade: H +4 @7:30 AM

Bull spreading is still very active. The March – May spread is setting records due to strong basis levels and the lack of deliveries. Export sales were a little light at 302,600 MT of old crop and 210,000 MT of new crop sales. Fortunately it is feed demand and rising ethanol production that traders are concerned with and poor exports are expected. Look for the March corn to reach the $7.25 area soon.

Wheat                                       Estimated Fund Position
Short Term: Down                 Net Long Futures and Options: -78947
Long Term: Down                  Change: +1000
Overnight Trade: Chicago: H +7 KC: H +11 @7:30 AM

Yesterday’s close in the wheat wasn’t impressive, but the overnight strength has been enough to take out yesterday’s high, so at least the charts look like we can see more short covering. Right now we are looking for a rebound back to $7.70 in the March KW. Wheat export sales were disappointing at 372,600 MT of old crop and 152,300 MT of new crop thanks to cancellations by the Chinese.

Soybeans                                Estimated Fund Position
Short Term: Down                Net Long Futures and Options: 97248
Long Term:Up                        Change: +4000
Overnight Trade: H +6 @7:30 AM

Soybean exports were back on track at 689,000 MT of old crop and 482,000 MT of new crop sales. It would only take 3 more weeks of sales at this level to reach the USDA estimate for the year. The March beans have held support at the 40 and 50-day moving averages for several days and are now starting to work back to the $15.00 level.

Live Cattle
Short Term: Down
Long Term: Down
Opening Calls: Mixed

Live cattle futures closed moderately to sharply higher on Wednesday, with the expiring February contract up 1.27 on the day. Overnight activity continues to see bull spreading in the market, with the front two months firmer and deferred contracts modestly lower. Cutouts were sharply higher for the second day in a row. Overnight highs in the Feb contract have reached 129.00, which is 4.00 above last weeks’ cash highs. We expect cash to surface with a minimum of 2.0 gains from a week ago and very possibly stronger. The Feb contract will expire at noon today. There were 11 fresh deliveries posted after Wednesday’s close.

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

Feeder cattle futures closed modestly higher on Wednesday, supported by higher fats and a late day sell off in the corn market. Overnight trade in the feeders is trending higher as we write, after seeing moderate pressure for most of the session. Corn is modestly firmer in old crop positions, weaker in new crop. We have stated that fats would need to be the upside leader if feeders were going to recover. We are getting some of that leadership out of the expiring Feb fats. First resistance for the March contract is 142.15 and then 142.60.