Schwieterman: Weaker weekly corn futures, feeder cattle fall too

Corn                                                   Estimated Fund Position
Trends
Short Term: Up                                Net Long Futures and Options: 15023
Long Term: Down                           Change: +10000
Overnight Trade: K +3 @7:30 AM

The corn is building on Friday’s gains and the May contract is back to testing the 40 and 50-day moving average resistance. The bull spreaders took control on Friday and we should see that continue this week. As long as the basis stays strong and there are no deliveries, then the front months will be stronger than the deferred. On the chart the May corn has to move through the March 4th high of $7.12 ¾ to keep the bull’s hopes alive.

Wheat                                                Estimated Fund Position
Trends
Short Term: Down                           Net Long Futures and Options: -72487
Long Term: Down                            Change: +1000
Overnight Trade: Chicago: K +2 KC: K Unch @7:30 AM

The wheat ended up going nowhere Friday and so far that has been the case overnight. The May KW keeps stalling out at the 9-day moving average and it looks like it will take a strong move higher in the corn to get the wheat to move through even the first level of resistance. As usual, some decent export sales news would be a big help to this market and right now we have only one week in a row of good numbers. A close above $7.40 in the May KW will be needed to generate a short covering rally.

Soybeans                                          Estimated Fund Position
Trends
Short Term: Up                                Net Long Futures and Options: 102422
Long Term:Up                                  Change: -3000
Overnight Trade: K +6 @7:30 AM

The May soybeans continue to creep towards $14.90. Friday’s supply and demand numbers were disappointing since there were no changes, but the numbers were also hard to believe. USDA is apparently content with leaving the ending stocks estimate at 125 million and disregarding the current strong demand. The trend in the market is still up and one should respect that. The gains may not be coming fast, but plan on a new high for the move very soon.

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

Live cattle futures closed sharply lower on Friday, with April dropping 2.40 for the week. The decline in futures came in spite of sharply higher cutout values for the week and steady to slightly lower cash trade. We expect to see slightly bigger show lists this week, due to the limited cash trade in many locations by week’s end. Asking prices of $130 in the south and $206+ in the north should be the norm. Early week cutout values and movement will be closely monitored by traders. We await technical signals to make any changes in current hedge biased positions.

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

Feeder cattle futures saw another round of triple digit losses on Friday, with the April contract giving up 2.85 for the week. The decline came in spite of 5 cent weaker weekly corn futures. The fresh contract lows on Friday keep the feeders in a negative technical pattern, without becoming extremely oversold. Overnight corn values are trending a few cents higher. Cash index levels dropped to 138.64 on Friday and are within .44 of the yearly lows posted a couple of weeks ago.

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