Corn                                                  Estimated Fund Position
Short Term:Down                          Net Long Futures and Options: -26669
Long Term: Down                          Change: +7000
Overnight Trade: K -5 Z -7 @7:30 AM

Today is option expiration for the May contracts. Look for the May futures to gravitate towards one of the round number strike prices between $6.40 and $6.60. This morning it is looking like $6.40 is the number, but another strong day in the wheat could change that by the time we get to the close. The extended forecasts will play a big role in the new crop today with a forecast favorable for planting adding to the bull spreading and to the pressure in the December contract.

Wheat                                               Estimated Fund Position
Short Term: Down                          Net Long Futures and Options: -56102
Long Term: Down                           Change: +3500
Overnight Trade: Chicago: K -5 KC: K -5 @7:30 AM

The wheat had a great day yesterday with no follow through buying overnight. The July KW closed above the 50-day moving average for the first time since early December, so the chart outlook is certainly brighter than it has been for quite some time and we can now be thinking about a move towards $7.80. The Wheat Quality Council’s tour will be next week, so we will get an opinion from them on the condition of the Kansas HRW crop. A few warm days could have things looking pretty bad.

Soybeans                                         Estimated Fund Position
Short Term: Up                               Net Long Futures and Options: 39225
Long Term: Down                          Change: +8000
Overnight Trade: K -3 X -7 @7:30 AM

Soybean basis bids are still strong and the front months of the futures are set up for a run at the highs once we get option expiration out of the way. The November contract still looks very bearish and it will probably take a dry weather scare in June or July to change that. Don’t put too much stock in yesterday’s export sales cancellations and plan on more bull spreading.

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

Live cattle futures posted strong gains on Thursday, with the lead months closing above their respective 40 day moving averages. The board strength along with short bought northern packer demand is increasing cash enthusiasm heading into week’s end. We now expect cash trade to be better in all sectors this week, with many southern lots raising asking prices to at least $129. It appears retailors are prepared to be more aggressive and the national beef folks are entering into an aggressive promotion for their products. Overnight trade is mixed in  a narrow trading range.

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

Feeder cattle futures continued their upward surge on Thursday, in spite higher grain prices. The market is definitely overbought in relation to the cash market but could get a boost from weakness developing in the corn this morning. The cash index is on the rise, with cattle buyers reporting price jumps of several dollars over the past few days. This weeks’ live cattle trade will be a deciding factor in how far we can extend this market over the coming week.