Schwieterman: Cattle futures close higher, corn modestly lower

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Corn                                      Estimated Fund Position
Trends – December Contract
Short Term: Up                     Net Long Futures and Options: -137591
Long Term: Down                 Change: -10000
Overnight Trade: Z -1 @7:30 AM


The December corn is working into the open chart gap, barely, but working into the gap makes the chance of going down to the bottom of the gap at $4.74 ½ greater. New crop export sales of 673,000 MT were ok, but not enough to get anyone excited, so the weather will be the main market factor again today. The forecasts at mid-day will most likely determine the direction of today’s close. A close below $4.74 ½ will be bearish.

Wheat                                    Estimated Fund Position
Trends – September Contract
Short Term: Up                      Net Long Futures and Options: -71977
Long Term: Down                  Change: -2000
Overnight Trade: Chicago: Z -3 KC: Z -3 @7:30 AM


After one day of excitement it seems that the wheat has slipped back into a sideways trading pattern. Export sales were good at 551,300 MT, but it is doubtful that we see much buying because of it if the corn and soybeans stay negative. The chances are increasing that we see the market go back and fill the open chart gap at $6.97 ¼ in the December KW contract.

Soybeans                               Estimated Fund Position
Trends – November Contract
Short Term: Up                       Net Long Futures and Options: 89529
Long Term:Up                         Change: -6000
Overnight Trade: X -6 @7:30 AM


Export sales were very good again for the soybeans at 868,700 MT. It is encouraging that we are seeing good demand with the higher prices. Today and tomorrow’s action will be very important on the charts. If the weather is threatening and the November soybeans can hold above the open chart gap the market will probably start another leg higher, which could result in a move over $15.00. Otherwise, with a good finish to the crop year we are looking for a move back to $12.56 fairly quickly.

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


Live cattle futures closed moderately higher on Wednesday, with support stemming from higher equity trade and solid cash prospects. Asking prices remain firm, with $125 in the south and $200+ up north holding solid. Seeing some $122 bids surface on Wednesday, with no takers is a good sign that packers may become aggressive enough today to see some action on a Thursday. Outside influences are mixed this morning, with the Dollar and equities both higher.

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


Feeder cattle futures closed with gains of .65-.90 on Wednesday, garnering solid support from lower corn values. Cash index levels remain stagnant, dropping a modest 7 points on the day. Overnight activity has been narrowly mixed, with a slightly higher bias building due to modestly lower corn values. Uneasiness in the Middle East continues to cap any rally attempt ahead of the three day weekend.



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