Schwieterman: Boxed beef prices see triple digit gains

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Corn                           Estimated Fund Position
Trends – December Contract
Short Term: Up          Net Long Futures and Options: -198991
Long Term: Down      Change: +4000
Overnight Trade: Z -1 @7:30 AM

The December corn closed at the top end of the range yesterday, but saw no follow though overnight. That is a pretty good indication that we can expect to see another directionless session. There really isn’t any fresh information to work with other than the Dollar Index making new lows today. Once we establish the size of this year’s crop more focus will be put on the Dollar and the potential for large exports, but for now traders are nervous about what kind of yield estimate USDA will throw out.

Wheat                        Estimated Fund Position
Trends – December Contract
Short Term: Up          Net Long Futures and Options: -58219
Long Term:Up            Change: -3000
Overnight Trade: Chicago: Z -2 KC: Z -2 @7:30 AM


The wheat lost some of its luster when it was revealed that the Argentine governments production estimate of 8.8 MMT may not be a complete estimate. At least their government is as inept as ours so the playing field is equal. Anyway, stay tuned for further guesses on the crop size out of S. America and watch the export sales data as we get it to get an indication of how much wheat is actually available on the world market. The weak Dollar is probably going to be a big help to our market at some point. Buy breaks.

Soybeans                  Estimated Fund Position
Trends – November Contract
Short Term: Up         Net Long Futures and Options: 95218
Long Term: Down      Change: +4000
Overnight Trade: X -8 @7:30 AM


The November soybeans are still flirting with the $13.00 level. Demand is outstanding and once we get all the export sales data it will most likely indicate that USDA will have to increase the export estimate. The problem is that a lot of traders are convinced that the yield estimate is being understated significantly and we are going to have a lot more soybeans available to export. Time will tell, so for the moment traders are waiting for more data and the market isn’t moving. Plan on more choppy trade.

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


Live cattle futures closed mixed on Monday and are expected to see two sided trade again this morning. Boxed beef prices saw triple digit gains on Monday and show lists were smaller in most regions. Our list was the smallest in history, with zero carryover from week ago numbers. There were no deliveries posted against the October contract, which should keep bull spreads moving forward. This morning’s jobs report could be as much of a market mover as anything else this morning.

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

Feeder cattle futures closed mostly lower on Monday and are modestly lower in overnight trade. Corn was firmer on Monday but giving back most of the gains in early morning trade. Cash has definitely pulled back over the past few days, with index levels at 164.81 and front month futures about a dollar higher. Some additional weakness in the futures is to be expected. Our near term target between 164.00 and 165.00 is within striking distance.



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