Corn                                              Estimated Fund Position
Trends – December Contract
Short Term:Down                     Net Long Futures and Options: -125916
Long Term: Down                     Change: -3000
Overnight Trade: Z -7 @7:30 AM

Corn traders weren’t too concerned about the 3 point drop in condition ratings. The market was under pressure overnight due in part to the cool forecasts for the bulk of the Corn Belt and rain that fell in Iowa yesterday. On the chart we are still watching the $4.90 level in the December contract. A new low for the move could start another wave of selling, which could push the market down to $4.50. The forecasts are, of course, still critical so be prepare for mid-day volatility.

Wheat                                        Estimated Fund Position
Trends – September Contract
Short Term: Down                  Net Long Futures and Options: -70902
Long Term: Down                   Change: -2000
Overnight Trade: Chicago: U -4 KC: U -2 @7:30 AM

Overnight the September KW fell to the lowest level in a couple of weeks. Blame the weakness in the corn and the inability to push through trend line resistance for the pressure. We need another round of big export sales to maintain the separation between the wheat and corn. I like the old crop vs. new crop spreads in the wheat right now due to the tight old crop stocks levels and because there has been some rain in western Kansas. Some decent moisture would  really boost production next year.

Soybeans                                Estimated Fund Position
Trends – August Contract
Short Term: Up                      Net Long Futures and Options: 83190
Long Term:Up                        Change: +6000
Overnight Trade: X +1 @7:30 AM

Condition ratings declined 1 point to 64% Good to Excellent, which was expected. The market started the overnight session under considerable pressure, but made a very good recovery. There is concern about the potential for a cut in the acreage estimate in the August supply and demand report and there is still concern that USDA may have been too optimistic in using a record high yield estimate. Plus we can’t forget the fact that old crop stocks are still exceptionally tight. A move through $13.00 in the November beans today would look bullish.

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

Live cattle futures closed moderately lower on Monday, with the October contract taking the majority of the selling pressure. Show lists appear to be significantly smaller in the south, with our list trimmed by about 15% from week ago levels. Cutout values continue to struggle, with select taking the brunt of the hit on Monday. Overnight activity has a slightly firmer tone and open interest was up again on Monday’s trade.

Feeder Cattle
Short Term: Up
Long Term: Up
Opening Call: 10-30 Higher

Feeder cattle futures posted moderate gains on Monday and are seeing follow through buying in the overnight trade. Weakness in corn futures, approaching recent contract lows are giving feeders a boost. Cash index levels were up another 48 points on Monday but remain 6.50 below the lead August futures contract. The April double top of 154.47 should be the next target for the August contract.