Schwieterman: Feeder cattle jump as corn market struggles

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Corn                                         Estimated Fund Position
Trends
Short Term: Up                      Net Long Futures and Options: 61372
Long Term: Up                       Change: +4000
Overnight Trade: H -3 @7:30 AM


Corn export sales were back to being horrible coming in at 138,500 MT for the old crop and 51,300 for the new crop. After a poor start yesterday the market climbed back to close near the high of the day, but the March contract is slipping back below the 40-day moving average this morning and a retest of yesterday’s low looks likely. Today’s close will be determined by how much faith traders are putting in the extended S. American forecast.

Wheat                                      Estimated Fund Position
Trends
Short Term: Up                      Net Long Futures and Options: -59304
Long Term: Down                 Change: -2000
Overnight Trade: Chicago: H -3 KC: H -3 @7:30 AM


Wheat export sales were good for the second week in a row at 572,500 MT for the old crop and 75,000 MT for the new crop. These good demand numbers are exactly what the bulls need to see. When coupled with the drought conditions in the HRW Belt, it creates a very bullish scenario. Moisture in the forecasts have has helped to pressure the wheat recently, so now it will have to materialize or we will see big gains on Monday. $8.11 is still a possible downside target for the March KW. Failure to hold at yesterday’s low of $8.16 ¾ will confirm that we are headed lower.

Soybeans                                Estimated Fund Position
Trends
Short Term: Up                      Net Long Futures and Options: 43313
Long Term:Up                        Change: -2000
Overnight Trade: H -6 @7:30 AM


Soybean export sales were good with 383,300 MT of old crop and 595,000 MT of new crop sales. Meal and oil sales were good as well. There is obviously nothing wrong with the demand for soybeans or the products, but traders are still nervous about the moisture in the extended forecasts for S. America. The Sunday night trade will probably be active in the soybeans and the direction of the trade will be determined by the moisture and moisture prospects for the dry areas of Argentina.

Live Cattle
Trend
Short Term: Down
Long Term: Down
Opening Calls: 30-60 Higher


Live cattle futures closed moderately higher on Thursday in the regular session, with additional strength developing as cash improvement was seen in the afternoon. Northern cattle traded as high as $199 in the beef on Thursday, after seeing significantly lower trade just one day earlier. The firm cash trade comes in spite of lower cutouts and ahead of this afternoons’ on feed report. A lower us Dollar and firm equity markets should be supportive today.

Feeder Cattle
Trends
Short Term: Down
Long Term: Down
Opening Call: 10-30 Higher


Feeder cattle futures saw mostly triple digit gains on Thursday, with support from the live and a struggling corn market. The cash index has fallen 3.80 since Friday of last week. Placement numbers are expected to be higher than a year ago, due to poor wheat pasture conditions. Overnight trade is moderately higher, with March now 2.00 higher than the close of business on Friday. Corn futures are 6 cents lower following another poor week of export sales.



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