Schwieterman: Feeder cattle futures settled sharply lower Tues.

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Corn Estimated Fund Position

Trends – December Contract

Short Term:Down Net Long Futures and Options: -11488

Long Term: Down Change: +1000

Overnight Trade: Z +1 @7:30 AM

The December corn posted an outside day higher on the chart yesterday and saw a little bit of follow through strength overnight. The market posted an outside day higher last week as well, and that didn’t amount to much of a rally, so don’t get your hopes up for this one either. The weather is still mostly favorable, crop condition ratings are high, and expectations will be for a higher yield estimate in the September supply and demand report. It will take a move to $3.75 to give the bulls any hope of a bigger recovery.

Wheat Estimated Fund Position

Trends – December Contract

Short Term: Down Net Long Futures and Options: -86487

Long Term: Down Change: -3000

Overnight Trade: Chicago: Z +4 KC: Z +4 @7:30 AM

The December KW fell to a new low yesterday, but the Chicago and Minneapolis contracts did not. HRW production was a bit higher than expected, which was disappointing to the bulls. We are now waiting for the export sales report to see if we can maintain the solid sales pace we have seen, otherwise this market doesn’t have much fresh news.

Soybeans Estimated Fund Position

Trends – November Contract

Short Term: Down Net Long Futures and Options: -64180

Long Term: Down Change: -5000

Overnight Trade: X +2 @7:30 AM

After the report the November soybeans fell to a new low, but managed a mid-range close. There was a little bit of strength overnight, but nothing to get too excited about. Just like the corn with favorable weather ahead and high crop condition ratings, it is hard to expect anything other than higher production estimates as we move into the fall. Look for the sideways to lower pattern to continue.

Live Cattle

Trend

Short Term: Down

Long Term: Down

Opening Calls: 20-40 Lower

Live cattle futures closed sharply lower on Tuesday, with limit to near limit lower moves for the third time in four days. There was some modest cash trade in the north on Tuesday, with beef values off $3-$4 from week ago levels. Asking prices in the south remain near $162, with additional northern cattle priced $252+. Hide and offal values are at record high levels and the beef market is holding much more level than the futures market would suggest. Overnight trade is recovering, after the October contract tested the 100 day moving average early last night.

Feeder Cattle

Trends

Short Term: Down

Long Term: Up

Opening Call: 50-100 Lower

Feeder cattle futures settled sharply lower on Tuesday, with more than 2.50 losses in most contracts. Cash index levels were off modestly but remain more than 7.50 premium the front end futures contracts. Overnight trade is lower, with September off more than 1.30 as we write. The recovery in the fats is not yet spilling over into the feeders. Corn prices are up a couple of cents overnight, after seeing modest gains on Tuesday. Early estimates have the July placements off 10+% from year ago levels.



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