Schwieterman: Feeders may benefit as corn moves lower overnight

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Corn                                     Estimated Fund Position
Trends – March Contract
Short Term: Up                    Net Long Futures and Options: -16777
Long Term: Up                     Change: -5000
Overnight Trade: H -4 @7:30 AM


The corn has built on Friday’s losses with further losses overnight. As much as anything it looks like the market was overbought and due for a correction. Trend line support for the July contract will come in near the $4.55 level and at about $4.60 for the December, so this may not be much of a correction. With less tension in the Ukraine there is some fear that we may see some exports shift back to them, so the export activity will be a key market mover in the next few weeks.

Wheat                                  Estimated Fund Position
Trends – March Contract
Short Term: Up                    Net Long Futures and Options: -69772
Long Term:Up                      Change: -3000
Overnight Trade: Chicago: H -4 KC: H -6 @7:30 AM


Wheat futures reversed lower Friday and saw further weakness overnight with a gap lower. That combination is a little ominous and will likely result in a deeper correction. For the moment we should look for the July KW to fall back to at least the $6.50 area and possibly $6.30. After the correction, traders will go back to watching exports and the weather. It’s almost March and the HRW Belt needs some spring moisture.

Soybeans                              Estimated Fund Position
Trends – March Contract
Short Term: Up                     Net Long Futures and Options: 175443
Long Term:Up                       Change: +7000
Overnight Trade: H +12 @7:30 AM


The soybeans made another round of new highs for the move overnight, with the March contract trading at the highest level since September of 2012. The Chinese just aren’t canceling orders fast enough, which makes USDA’s export estimate look way too low and the ending stocks estimate way too high. Traders are preparing for exceptionally tight supplies this summer. The March contract is headed to $14.00 this week and then it’s up to the weekly sales numbers.

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


Live cattle futures closed moderately lower on Friday, in spite of the large jump in cash prices. Placement numbers in Friday’s on feed report were above expectations at 109% of year ago levels. The higher than expected placements could offset the $145 cash in the south on this morning trade resumption. Charts remain a little suspect, with April looking like a double top. Additional strength will need to be cash driven.

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


Feeder cattle futures closed moderately lower on Friday and only modestly higher for the week. The placements at 109% were large enough to expect lower calls this morning. Overnight weakness in the corn market could give the feeders a much needed lift. The market itself is starting to have a bit of a tired feel to it. Fresh hedge strategies should be viewed at current price levels.



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MEL    
NE  |  February, 24, 2014 at 10:12 AM

Keep cheering for cheap corn.Shame;


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