Schwieterman: Feeder cattle futures post new contract highs

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Corn                                    Estimated Fund Position
Trends – July Contract
Short Term: Up                   Net Long Futures and Options: -17777
Long Term: Up                    Change: -3000
Overnight Trade: N -3 @7:30 AM


Corn export sales were great at 840,800 MT for the old crop. This is well below the pace from a few weeks ago, but still strong enough to justify USDA’s last increase in the export estimate and strong enough, if it continues, to warrant another increase at some point in the future. The market didn’t get a positive reaction from the numbers though and after yesterday’s failure to hold gains it looks like the July contract will fall back to trend line support near $4.57. The December contract has, so far, failed to move through the $4.70 resistance and is in consolidation mode.

Wheat                                  Estimated Fund Position
Trends – July Contract
Short Term: Up                    Net Long Futures and Options: -69772
Long Term:Up                      Change: -5000
Overnight Trade: Chicago: N -7 KC: N -7 @7:30 AM


Wheat ending yesterday’s session under pressure and saw follow through selling overnight. Export sales were a little light at 365,100 MT of sold crop and there is concern about world demand shifting elsewhere after the cancellation by the Egyptians and the issue of fresh export licenses by the Argentines. Plus, there will be a little snow in the HRW Belt. The market hasn’t completely rolled over yet, but $6.61 is now critical support in the July KW.

Soybeans                              Estimated Fund Position
Trends – July Contract
Short Term: Up                     Net Long Futures and Options: 194443
Long Term:Up                       Change: +6000
Overnight Trade: N +7 @7:30 AM


Soybeans keep marching on. The March contract closed well above $14.00, the May contract is trading above $14.00, and the July seems to be headed that way. Export sales were great at 327,700 MT of old crop and 315,000 MT of new crop sales. Any positive number is too big for the old crop. The shipment pace is so fast right now that the Chinese are running out of bushels they could potentially cancel, which is making the bears really nervous. This market is due for a correction, but it may not  come for a long time. $13.50 is now support in the July contract.

Live Cattle
Trend
Short Term: Up
Long Term: Up
Opening Calls: 30-80 Higher


Live cattle futures traded sharply higher on Wednesday, with a much stronger cash market leading the way. In the beef trade up north most of the business took place at the $240 level. Southern trade saw cattle move as high as $150 in the cash market, with western Nebraska and Colorado movement reaching $152. Cutouts were more than 2.00 higher across the board and hide and offal set a new all-time high. The February contract expires on Friday and is leading futures in effort to catch the cash trade. The next spot month is currently 5.00 discount to the Feb.

Feeder Cattle
Trends
Short Term: Up
Long Term: Up
Opening Call: 30-50 Higher


Feeder cattle futures closed sharply higher on Wednesday, with every contract posting new contract highs. The new highs followed the fats strength and came in spite of a 7th consecutive lower cash index posting. Overnight corn prices are 3-4 cents weaker, after a modestly lower close on Wednesday. The combination of higher fats and lower corn is lifting feeders to overnight highs of .40-.60 higher.



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