Schwieterman: Cattle futures higher Friday, dollar stronger

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Corn                                 Estimated Fund Position
Trends
Short Term: Up             Net Long Futures and Options: -4763
Long Term: Up              Change: -8000
Overnight Trade: N -8 Z -12 @7:30 AM


Traders are content with the weather and the forecasts, and for the moments aren’t too afraid of what USDA will come up with in Friday’s reports. As long as traders are happy with the weather the December contract will likely remain under pressure. On the December chart we had a gap lower, just like last Monday, but I guessing we won’t see a reversal higher like last week. Look for the bull spreaders to be in control as we start the week.

Wheat                              Estimated Fund Position
Trends
Short Term: Down        Net Long Futures and Options: -57094
Long Term: Down         Change: -2000
Overnight Trade: Chicago: N -9 KC: N -6 @7:30 AM


It is going to be difficult to come up with anything positive to talk about for the wheat. The corn is lower and there is widespread harvest activity in Kansas. Traders are going to be stuck watching the corn market and waiting for Friday’s reports. What the bulls need now are some big export sales to help mark the harvest low.

Soybeans                      Estimated Fund Position
Trends
Short Term: Down     Net Long Futures and Options: 91192
Long Term:Up             Change: -5000
Overnight Trade: N -4 X -14 @7:30 AM


Bull spreading was active in the soybean complex overnight. Traders are still concerned about tight old crop supplies of beans and meal, but at the same time there isn’t much hope for the new crop contract if the weather is favorable. The gap lower in the November soybean contract suggests we will see $12.41 very soon.

Live Cattle
Trend
Short Term: Up
Long Term: Down
Opening Calls: 20-40 Lower


Live cattle futures finished the week strong and strong for the week. August live were up 1.60 on Friday and 3.30 for the week. Liquidation in the June contract was the key to a 6,000 drop in open interest. The on feed report showed larger than expected placements for the month of May, with all of the increase coming in the over 700 lb. categories. Even more important was the 20% gain in placements over 800 lbs.. The large placement of heavy yearlings could build ready numbers for late summer and early fall kill. Weakness in the equities and strength in the Dollar should weigh on prices as well.

Feeder Cattle
Trends
Short Term: Up
Long Term: Down
Opening Call: 20-40 Lower


Feeder cattle futures posted gains of more than 2.00 on Friday and August picked up 3.50 for the week. The higher than expected May placements will likely offset the weakness in the corn futures overnight. We look for feeders to follow the lead of the fats, as they have in recent trade. Technical indicators will start the week with short term turned up. The technical strength could bring enough buyers into the mix to offset weaker outside influences.



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