Schwieterman: Feeder cattle futures post strong week

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Corn                                       Estimated Fund Position
Trends – December Contract
Short Term:Down                   Net Long Futures and Options: -210991
Long Term: Down                   Change: -5000
Overnight Trade: Z -1 @7:30 AM


December corn slipped to another new low for the move overnight. Slowly, but surely, this market will reach the $4.25 area. I would plan on another week of choppy action, but since yield reports are still very good the market will maintain a weaker bias. I am hoping for a bounce back to $4.40 for another opportunity to sell.

Wheat                                     Estimated Fund Position
Trends – December Contract
Short Term: Up                       Net Long Futures and Options: -57219
Long Term:Up                         Change: +3000
Overnight Trade: Chicago: Z -5 KC: Z -5 @7:30 AM


December KW moved to the top of the trading range on Friday and back to the bottom overnight. So far, this market has been correcting by trading sideways, but a deeper correction is still a possibility. The fundamental outlook for the HRW is very bullish, but we probably need to see a USDA report to remind everyone of that and there is no way of telling when the next report will be. I am still going with a “buy the breaks” attitude.

Soybeans                                 Estimated Fund Position
Trends – November Contract
Short Term: Down                    Net Long Futures and Options: 82218
Long Term: Down                     Change: -7000
Overnight Trade: X +4 @7:30 AM

Soybean traders seem to be caught between fears of a higher production estimate and some very good demand news. We probably won’t see a major move in either direction until we get some fresh USDA data and then price direction will come down to the production estimate. If production doesn’t come in higher then we are selling too many soybeans and the market will turn bullish again.

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


Live cattle futures closed the week with a positive session, capped by $2 higher cash trade late in the day. For the week October futures gained about .75, while deferred contracts alleviated some of their overbought conditions by trading sideways. The jump in cash happened after the futures close and should support this mornings’ opening. The improved cash may also draw a few more green cattle onto this week’s show lists. Outside market influences appear mixed, with the Dollar and equities under pressure. Bull spreading should remain a feature.

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


Feeder cattle futures continued their strong week on Friday, with the front two months posting triple digit gains. For the week the November contract posted gains of 3.20 and remains in overbought territory. Overnight corn prices are modestly lower putting in new contract lows at 4.32 basis the  December contract. Feeders candefinitely stay overbought or oversold for an extended period of  time. We are into the upper end of our price goals and advise put option strategies for producers on any early week strength in this market.



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