Schwieterman: Heavy snow to limit cattle feed conversion

Corn                                         Estimated Fund Position
Trends
Short Term:Down                 Net Long Futures and Options: 33031
Long Term: Down                  Change: -5000
Overnight Trade: H +1 @7:30 AM

The corn market continues to consolidate. It was very disappointing that the corn market couldn’t even trade positive with the soybeans nearly 50 cents higher. The export pace is still too slow for many traders liking and the rebound in ethanol production hasn’t lasted long enough to give buyers confidence. If the market can avoid making a new low for the move today, then there is still a chance for a short covering bounce. As usual some good export news would be a big help.

Wheat                                      Estimated Fund Position
Trends
Short Term: Down                 Net Long Futures and Options: -68078
Long Term: Down                  Change: -3000
Overnight Trade: Chicago: H +2 KC: H +3 @7:30 AM

The wheat chart looks horrible after the new lows made yesterday. The market is definitely oversold and due for a bounce, but our weather event has the bears thinking the crop is made. I’ve swept an inch of wet snow off the sidewalk so far this morning, so we are off to a good start, but the crop is not made. There has been talk of fresh export business, which should support the market once the snow has past, but until then the bears will be eyeing $7.50 in the March KW.

Soybeans                                    Estimated Fund Position
Trends
Short Term: Up                          Net Long Futures and Options: 111075
Long Term:Up                            Change: +12000
Overnight Trade: H +14 @7:30 AM

Soybeans are strong again and on the verge of testing $15.00. $15.00 is the critical technical hurdle for the soybean market. Failure here again will not look good on the charts. However, a close above the resistance would make the $15.84 level the next upside objective. The Chinese are back in the market and we really can’t stand too much more export demand.

Live Cattle
Trend
Short Term: Down
Long Term: Down
Opening Calls: 10-20 Lower

Live cattle futures closed lower in the front four months on Tuesday, with the active April contract down .90 for the day. A winter storm is entering the cattle feeding region this morning, with heavy wet snow already into the Garden City area. Temps for the next couple weeks appear below normal, which should limit feed conversion. Beef prices were higher on Tuesday, with good movement. With the storm showing heavy snow potential over the next 30 hours, packer buyers may be limited in their ability to secure this weeks’ show list until Friday.

Feeder Cattle
Trends
Short Term: Down
Long Term: Down
Opening Call: 30-50 Lower

Feeder cattle futures closed moderately lower on Tuesday and are under additional pressure in overnight trade. Overnight corn values are near steady as we write, with no clear direction from Tuesday’s price action. The first clear support for the March feeders rests near the 141.00 level. Outside markets are offering little support heading into today’s trade. Sloppy feedlots over the next week or so may limit buyers of replacement cattle.

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