Schwieterman: Feeder cattle futures, corn both higher Friday

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Corn                                               Estimated Fund Position
Trends – December Contract
Short Term: Up                            Net Long Futures and Options: -127607
Long Term: Down                        Change: +2000
Overnight Trade: Z +8 @7:30 AM


December corn held at trend line support Friday then jumped higher overnight due to weather concerns in the Corn Belt. Some areas received decent rains over the long weekend, but there were many that didn’t and the forecasts look dry, which won’t provide a good finish to either the corn or soybean crops. For the moment, last week’s high of $5.08 ¼ is a likely upside target.

Wheat                                         Estimated Fund Position
Trends – December Contract
Short Term: Up                         Net Long Futures and Options: -71796
Long Term: Down                    Change: +1000
Overnight Trade: Chicago: Z +6 KC: Z +4 @7:30 AM


The wheat was higher overnight, but is by no means keeping up with the corn or beans. The overnight high in the December KW was near the 40 and 50-day moving averages and we have been waiting for a close above those averages since May. If the corn can hold gains this week the chances are good that the wheat can finally turn the corner on the charts, but one should be patient getting long wheat until we have a solid technical signal to do so.

Soybeans                                  Estimated Fund Position
Trends – November Contract
Short Term: Up                        Net Long Futures and Options: 94243
Long Term:Up                          Change: -5000
Overnight Trade: X +50 @7:30 AM


The November soybeans jumped back to last week’s high overnight and look set to begin another leg higher. Further gains are certainly possible if the forecasts stay threatening because a small cut in the yield estimate will have a large impact on ending stocks. Obviously we have to see the market move through last week’s high if the uptrend is to continue, so the overhead resistance is clear at $14.09 ½.

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


Live cattle futures closed mixed on the deferred contracts on Friday, while the August contract went off the board with losses of .85 on the day. Cash trade was reflected in the lower close by the August, with the south steady and northern beef trade $1.00 lower for the week. Retail business is expected to show good weekend clearance, as weather was conducive to outdoor grilling along with opening weekend of college football. Packers remain short bought and will be buying for a full kill week. The Dollar and equities remain strong.

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


Feeder cattle futures closed sharply higher on Friday, in spite of a slightly higher close in the corn futures. Overnight corn prices have firmed even more, which may allow for feeders to see some early pressure. The lack of strength in the live cattle pit is keeping a lid on the feeder market. Cash index levels jumped 56 points on Friday and should remain reasonably firm to start this week.



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