Schwieterman: Live cattle futures higher Tuesday

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Corn                                  Estimated Fund Position
Trends – March Contract
Short Term: Up                 Net Long Futures and Options: -155356
Long Term: Down              Change: +2000
Overnight Trade: H +2 @7:30 AM


The March corn closed positive yesterday after testing the $4.20 support and has since seen follow through buying. The bull flag formation is still intact and there is still potential to see a move to the $4.50 area. The weather in S. America won’t help the corn market so any strength will have to come from fresh demand and short covering by the trading funds.

Wheat                                Estimated Fund Position
Trends – March Contract
Short Term: Down             Net Long Futures and Options: -95512
Long Term: Down              Change: -1000
Overnight Trade: Chicago: H Unch KC: H +3 @7:30 AM


The wheat had a little bit of excitement overnight and the March KW traded as high as $6.28. This is still part of an overall sideways pattern and the market hasn’t given any indication of a turnaround at this point. Our wheat is very competitive on the world market, but we have to see sales in order for that to matter. It will take a close above $6.34 in the March KW to get traders interested in covering short postitions.

Soybeans                            Estimated Fund Position
Trends – March Contract
Short Term: Down               Net Long Futures and Options: 99823
Long Term: Down                Change: -10000
Overnight Trade: H -4 @7:30 AM


The $12.91 support failed in the March soybeans, so the next downside objective is the $12.65 area. Traders are worried about our exports at the moment, and as long as that is the case the beans will struggle. Keep in mind, however, that if another purchase by the Chinese shows up it will likely turn the market around. Don’t underestimate the Chinese appetite for soybeans.

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


Live cattle futures closed sharply higher on Tuesday, with the lead February contract leading the way gaining 1.20 for the day. Cutouts remain in hyper mode and several cattle have been locked up for the week with high of the week + money. Overnight activity is mixed, with April higher, Feb flat and deferred contracts modestly lower. We continue to expect cash to be higher for the week, with some possible trade development today.

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


Feeder cattle futures closed moderately higher in most months on Tuesday, but fell significantly off of session highs by the close and are trending lower in overnight trade. The bull flag in the corn market is taking shape, which may limit upside potential in the feeders. We need to see new contract highs in the feeders, or some weakness is possible near term.



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