Schwieterman: Cattle futures lower, cash trade develops at $125

Corn                                                  Estimated Fund Position
Trends
Short Term: Up                               Net Long Futures and Options: 57299
Long Term: Up                                Change: +9000
Overnight Trade: K +3 @7:30 AM

The May corn closed above the 100 and 200 day moving averages yesterday and is now approaching trend line resistance that began in late November. The news is all the same with strong basis and bull spreading being the most important features in the market. There are also still hopes that next week’s Quarterly Stocks figure is bullish, which will keep the basis levels strong and the bull spreading going. For today a close above $7.34 in the May contract would suggest a move up to the February high of $7.47.

Wheat                                               Estimated Fund Position
Trends
Short Term: Up                               Net Long Futures and Options: -61816
Long Term: Down                          Change: +2500
Overnight Trade: Chicago: K +8 KC: K +6 @7:30 AM

The May KW made a new high for the move overnight, which should help generate some short covering. The 38% retracement of the last leg down is at the $7.74 area and that would make a viable upside target ahead of next week’s reports. For consistent gains, however, we will have to see consistently large export sales.

Soybeans                                          Estimated Fund Position
Trends
Short Term: Down                          Net Long Futures and Options: 88210
Long Term: Down                           Change: -3000
Overnight Trade: K +9 @7:30 AM

The May soybeans are making a test of the February low and holding so far. A positive close today would encourage short covering and fresh buying. The long term trading pattern suggests that if the February low holds it will only be a matter of time until the market is back at $14.90. Demand is still too strong for the supplies we have.

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

Live cattle futures closed moderately lower on Tuesday, with key support on the weekly continuation chart now in play. Some cash trade developed at $125 in the south and western Nebraska, as hedged cattle took advantage of the good basis levels. Remaining show lists appear to be priced around the $126 level in Kansas and Texas, while eastern Nebraska is asking $198-$200 in the beef. Overnight activity has been mixed, with current prices rebounding to as much as .20 higher in the lead contract. On feed report estimates call for low placement and marketing numbers, with total on feed below 94%.

Feeder Cattle
Trends
Short Term: Down
Long Term: Down
Opening Call: 70 – 100 Lower

Feeder cattle futures closed moderately to sharply lower on Tuesday, with several months posting triple digit losses. Overnight business has remained on the defensive, with new lows for the move seen across the board. Cash index levels have resumed their downward trend and accelerated in the past two days. Corn prices are making new highs for their move overnight, which will add fuel to the bearish fire in the feeder pit. Friday’s report is expected to show another month of 7-10% drop in placements. The market remains more reliant than ever on  the fat market to lead the way out of the current rut.

1. Vilsack: Taking time to remember the fallen
2. Livestock Marketing: Beef prices remain strong, cattle pressured
3. Farm Bill progress
4. Feeder cattle review: Choice beef prices keep rolling higher
5. Ag markets diverge just before the long holiday weekend
6. Armyworms eat fescue pastures, hayfields

1. Commentary: New rules un-COOL
2. Former Eastern Livestock CEO, CFO sentenced for federal crimes
3. TSCRA works with sale barns to catch Houston cattle thief
4. More beef cows in worst drought regions than a year ago
5. NASA backs 3D food printer to feed growing population
6. Post-tornado composting a solution for disposal of dead livestock

1. Commentary: New rules un-COOL
2. Commentary: In praise of animal foods
3. What’s on America’s grill this weekend?
4. NASA backs 3D food printer to feed growing population
5. Meat industry associations quick to attack the new MCOOL rule
6. Commentary: Message to Occupy Monsanto: Occupy yourself