Corn                                     Estimated Fund Position
Short Term:Down             Net Long Futures and Options: 2851
Long Term: Down             Change: +3000
Overnight Trade: H +3 @7:30 AM

The March corn is still trading sideways, but the bull spreading is active and the March is building its premium over the other contracts and the spreads are nearing record levels. Basis levels are also setting records for this time of year in some locations, which tells us that the futures are too low and we won’t be seeing deliveries unless it is the longs demanding them.

Wheat                                   Estimated Fund Position
Short Term: Down              Net Long Futures and Options: -81947
Long Term: Down               Change: -3000
Overnight Trade: Chicago: H -1 KC: H -3 @7:30 AM

Once again the wheat made new lows for the move overnight. There is nothing positive to say about the wheat market. The bears are convinced that the wheat crop is made and demand, despite improving recently, isn’t enough to offset the increase in production potential. Time will tell if that is true, but for the moment that is what the market is dealing with. Since the $7.50 support has failed in the July KW, $7.00 is the next downside objective.

Soybeans                               Estimated Fund Position
Short Term: Up                     Net Long Futures and Options: 97248
Long Term:Up                       Change: -4000
Overnight Trade: H -8 @7:30 AM

The March soybeans found support at the 40 and 50-day moving averages overnight, but the market is a long way from trading positive. Demand is still strong, but the bulk of the recent export sales activity has been in the new crop. Rainfall chances are improving for Argentina, but production estimates are shrinking. Look for a day of consolidation in the soybeans. A close below $14.35 in the March contract would be bearish.

Live Cattle
Short Term: Down
Long Term: Down
Opening Calls: 10-30 Lower

Live cattle futures closed mixed on Monday, with the Feb and April bull spread against the summer months. Concerns over the March first sequester and budget cuts continue to weigh on the markets in general. As much as 15-17 inches of snow fell on Texas panhandle feedlots on Monday, with additional snow into the southern Kansas counties. Weight losses will continue to gain momentum, as seasonal and weather issues combine. Our show list was the smallest I’ve seen in the past 21 years. Changes in marketing practices will account for part of the reduction, but numbers are tight.

Feeder Cattle
Short Term: Down
Long Term: Down
Opening Call: 40-80 Lower

Feeder cattle futures closed modestly lower on Monday and appear to be gaining downside momentum in overnight trade. Cash index levels tumbled 1.48 on Monday, posting their lowest average since the 8th on August. The feeders are in need of live cattle strength, if they expect to stabilize or have any chance of a rally effort. Closeouts continue to punish the cattle feeder, which in turn takes money off the table at the sale barn.