Schwieterman: Live cattle futures post key reversal, close higher

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Corn                                                 Estimated Fund Position
Trends
Short Term: Up                              Net Long Futures and Options: 23023
Long Term: Down                         Change: +8000
Overnight Trade: K +1 @7:30 AM


The May corn traded above, but did not close above, the March 4th high. The market did close  well above the 50-day moving average, so I think we can once again look for a move up to the $7.22 level. Fresh news is limited today. Traders are still looking at the strong basis levels and lack of deliveries as we head into expiration of the March contract. Plan on more bull spreading.

Wheat                                            Estimated Fund Position
Trends
Short Term: Down                       Net Long Futures and Options: -70987
Long Term: Down                        Change: +1500
Overnight Trade: Chicago: K -2 KC: K -3 @7:30 AM


It has been several days since we had a new low for the move in the wheat and we have seen the market trade sideways through trend line resistance. That is about all the positive news I can come up with. Continued strength in the corn should keep the wheat from making new lows for a little bit and if we can get a good export sales report this week perhaps we will see some short covering. Plan on another day of consolidation today.

Soybeans                                        Estimated Fund Position
Trends
Short Term: Up                              Net Long Futures and Options: 106422
Long Term:Up                                Change: +4000
Overnight Trade: K -7 @7:30 AM


The soybeans have seen some pressure in overnight trade, perhaps in response to a lack of fresh news. Export sales and the NOPA crush report will be out on Thursday, until then traders will be waiting for fresh export sales news. On the charts the pattern has been a slow grind higher and it looks like that is what we should keep looking for. Like the corn, look for bull spreading.

Live Cattle
Trend
Short Term: Down
Long Term: Down
Opening Calls: Mixed


Live cattle futures posted a key reversal on Monday, with April setting new lows for the move in early trade, before rallying above Fridays’ high and closing higher for the day. Cutout values were mixed, with support stemming from new record highs in the Dow. Open interest gained 1,613 contracts on the rally, suggesting new buying interest. Overnight activity has been two sided, with bull spreading noted in fats. Steady cash trade with a week ago could see some play, with strong basis levels noted near 128.00.

Feeder Cattle
Trends
Short Term: Down
Long Term: Down
Opening Call: Mixed


Feeder cattle futures have seen two sided trade overnight, after Monday’s mixed close. Cash index levels dropped .87 to 137.77, which is a new low for the year. Feeders did rebound from their early day lows, but were unable to hold midday gains into close on Monday. Corn prices are flat overnight, after posting solid gains to open the week. Feeders are in need of deferred live cattle strength to encourage new buyers into this market. The improved moisture and pasture conditions will help, but the carrot at the end of the feeding process needs to improve.



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