Schwieterman: Feeder cattle, corn settle lower, live cattle up

Corn                                         Estimated Fund Position
Trends
Short Term: Up                     Net Long Futures and Options: 217401
Long Term: Up                      Change: -6000
Overnight Trade: Z -2 @7:30 AM

There is very little fresh news. The weather isn’t getting any better and the crop is maturing rapidly, which will mean earlier than normal harvest. Early in the season the September contract was weak vs. the December because of the early planting. It turns out we will still see an early harvest, but the circumstances are a little different now. Yield estimates are shrinking, but everyone seems to be waiting for next week’s report to take action. Plan on choppy, two sided trade again today.

Wheat                                         Estimated Fund Position
Trends
Short Term: Up                          Net Long Futures and Options: 15086
Long Term:Up                            Change: -3000
Overnight Trade: Chicago: Z+3 KC: Z +4 @7:30 AM

The December KW has found support at the $8.85 area, and the market may see some strength through the day today. Overall, however, the pattern is still sideways and I still look for that to continue as we head into the supply and demand report next Friday. It should be a friendly report next week, but I don’t think most people are prepared for just how bullish it could be when USDA cuts 2 billion bushels from corn production.

Soybeans                                     Estimated Fund Position
Trends
Short Term: Up                           Net Long Futures and Options: 217629
Long Term:Up                              Change: -5000
Overnight Trade: X -4 @7:30 AM

Like the other markets, the soybeans aren’t really going anywhere. Traders are biding their time waiting for the supply and demand report or some other fresh news. Everybody knows about the weather at this point, but it seems that people want confirmation of the crop losses from USDA. The job of the market is still slow down, but we still don’t know how much demand has to slow.

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

Live cattle futures closed sharply higher in the front two months on Thursday. Cash trade provided the support, with southern cash jumping $3-$4 to $118 and the north mostly $185 in the beef. August live settled right at 120.00 heading into option expiration today and first notice for deliveries after Monday’s close. August closed above the 100 day moving average and at its’ highest level since June the 12th. Open interest climbed 879 contracts in spite of hedge closeouts.

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

Feeder cattle futures closed moderately lower on Thursday, in spite of lower settlements in the corn and sharply higher live cattle. Overnight markets are firm, as traders add length due to a stronger technical picture. Strength in deferred live cattle futures, has feedlot managers who had backed away from recent purchases talking about getting back into the action. The corn market is modestly lower as we write.

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4. Representative Lucas discusses new Farm Bill
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6. The relationship between retail gasoline prices and futures prices

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