Schwieterman: Export demand saving cattle futures

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Corn                                            Estimated Fund Position
Trends
Short Term:Down                    Net Long Futures and Options: 169010
Long Term: Down                    Change: -3000
Overnight Trade: Z +2 @7:30 AM


The December corn failed at the 50-day moving average again on Friday then ended up posting an outside day lower on the charts. Overnight the corn spent most of the session in positive territory, so for the moment the bottom of the trading range is holding as support. A close below $7.32 would suggest that the market is headed down to the $7.05 area, and that is a concern since the soybean haven’t stopped falling yet. I expect the support to hold and the sideways trading pattern to continue.

Wheat                                         Estimated Fund Position
Trends
Short Term: Up                         Net Long Futures and Options: -8976
Long Term:Up                           Change: -8000
Overnight Trade: Chicago: Z -9 KC: Z -9 @7:30 AM


The December KW nearly reached $9.50 Friday before failing and posting an outside day down on the charts. The wheat has since headed back to the middle of the trading range and will likely use the $9.05 - $9.15 area as support this week. Dry weather and poor crop condition ratings will provide buying interest on breaks.

Soybeans                                     Estimated Fund Position
Trends
Short Term: Down                     Net Long Futures and Options: 109657
Long Term: Down                      Change: -12000
Overnight Trade: F -24 @7:30 AM


The soybeans are still under pressure. Friday’s low was near the 62% retracement of the entire move higher and the 200-day moving average, but both of those support levels failed overnight, which will have traders looking for a move to the $13.75 area in the January contract. The market is oversold, but the momentum is clearly to the downside at this point and there is no sense in trying to pick a bottom.

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

Live cattle futures closed steady to higher on Friday and modestly higher for the week. Cash trade remained sluggish through week’s end, with most trade a buck lower than the previous week. Packers should enter the week somewhat short bought, which may limit kills through the middle of the week. Export demand remains the bright star in this market, with domestic demand lagging. We could see a boost on the domestic side as the east coast continues to rebound from Sandy.

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


Feeder cattle futures closed mostly lower on Friday, with January off 1.10 for the week. Cash index levels continue to hover just above the 144.00 level. Overnight corn prices traded 1-4 higher. It appears that rallies are for selling in the feeders, with key support near 144.85 in the January contract. Corn is nearer support than resistance at current levels.



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