Schwieterman: Corn lower overnight, cattle futures up moderately

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Corn                                 Estimated Fund Position
Trends – December Contract
Short Term: Up                Net Long Futures and Options: -140591
Long Term: Down            Change: +2000
Overnight Trade: Z -4 @7:30 AM


The December corn is working deeper into the open chart gap and one should expect to see the market hit the bottom of the gap at $4.74 ½ at some point today. However, as we move closer to the close today traders will be making their final bets on the weekend weather and the Monday night forecast. With large declines in the crop condition ratings expected on Tuesday the market could be very explosive if the weather looks threatening for the first half of September.

Wheat                                Estimated Fund Position
Trends – September Contract
Short Term: Up                  Net Long Futures and Options: -75977
Long Term: Down              Change: -2500
Overnight Trade: Chicago: Z -1 KC: Z Unch @7:30 AM


The December KW came very close to filling the open chart gap overnight and then bounced back. There hasn’t been a lot of love for the wheat market since Monday morning, but with pressure in the corn and soybeans, perhaps the wheat will benefit from spread trade. Wheat demand is still strong, which should at least keep the wheat from falling apart, but there obviously hasn’t been much speculative enthusiasm in the wheat for over a month so it is hard to expect any now. Plan on more sideways trade.

Soybeans                         Estimated Fund Position
Trends – November Contract
Short Term: Up                Net Long Futures and Options: 88529
Long Term:Up                  Change: -4000
Overnight Trade: X -14 @7:30 AM


The November soybeans fell into the open chart gap overnight, but did manage to finish the overnight session in the middle of the range. We should have volatile trade today as traders try to balance the ideas that we normally see a seasonal decline from here with ideas that we could see further crop deterioration next week. The soybean crop needs rain very soon to avoid a substantial reduction in yield and ending stocks. A threatening forecast Monday night will send this market to new contract highs, while a wet one will take in back to $12.50 quickly.

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


Live cattle futures closed modestly higher across the board on Thursday, with cash trade waiting for Friday once again. The three day holiday weekend looks perfect for outdoor activity and grilling. Some modest cash trade in Nebraska took place, with a regional packer, while the majors remain at a stalemate with feedlots. The August contract expires today and is currently trading .55 above last weeks’ southern cash. Last weeks’ export sales were the best in the past five months.

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


Feeder cattle futures closed with moderate gains on Thursday and the August contract went off above the 155.00 level. Overnight corn prices continued to work lower, boosting overnight feeder prices to new highs for the week. Cash index levels were lower on Thursday but are expected to rise today, based off the August contracts higher expiration. Higher live cattle prices and better cash trade are needed to see feeders take out near term resistance levels. Numbers should remain tight.



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