Schwieterman: Feeder cattle futures modestly higher

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Corn                                      Estimated Fund Position

Trends – July Contract

Short Term:Down            Net Long Futures and Options: 177027

Long Term: Up                  Change: +10000

Overnight Trade: N +2 @7:30 AM

Corn export sales were good at 618,900 MT of old crop and 382,900 MT of new crop sales. At this pace we are just a few weeks away from reaching the yearly sales estimate, which means it is likely that USDA has to increase the export estimate again in the May supply and demand report. The corn market has posted solid gains following Monday’s selloff and the market is now reaching the upper end of the range and the area it has struggled to move through. The July corn needs a close above $5.13 to keep the upward momentum going.

Wheat                                  Estimated Fund Position

Trends – July Contract

Short Term: Up                 Net Long Futures and Options: -10291

Long Term:Up                   Change: +3000

Overnight Trade: Chicago: N +10 KC: N +8 @7:30 AM

Wheat export sales were ok when you add the old crop at 339,100 MT and new crop at 271,700 MT together, but the numbers won’t get any speculators excited about wheat. There was some decent rain in parts of the HRW Belt with some locations getting more than an inch, but the coverage was very spotty and inconsistent. There are more chances ahead, which may keep a lid on the market today, but a close above $7.55 in the July KW will turn a number of technical indicators positive.

Soybeans                            Estimated Fund Position

Trends – July Contract

Short Term: Down           Net Long Futures and Options: 136012

Long Term:Up                   Change: -6000

Overnight Trade: N +4 @7:30 AM

Old crop soybean export sales were only 800 MT, but the fact remains that any positive number is still too much. There is lots of talk about imports, which definitely weighed on the market yesterday, but we have to have those imports to make the supply and demand balance sheets work out. The imports are not going to bury us in soybeans, they are going to prevent us from running out of beans. The $14.60 area is holding as support and a move above $14.80 will mark the end of the correction.

Live Cattle

Trend

Short Term: Down

Long Term: Down

Opening Calls: 10-30 Lower

Live cattle futures closed higher across the board on Wednesday, with the 3rd quarter contracts leading the advance. Cutout values posted triple digit gains for the 3rd day this week. Overnight trade has been two sided and is currently trending lower as the weeks’ cash trade closes in. Open interest did increase 708 contracts inspite of the daily liquidation in the spot April contract. Estimates for Friday’s on feed r ort are 100.4 percent on feed, 101.7 percent placed and marketings of 96.6 percent.

Feeder Cattle

Trends

Short Term: Down

Long Term: Up

Opening Call: Mixed

Feeder cattle futures closed modestly higher in all months on Wednesday, with front months seeing some follow through buying in overnight trade. Corn prices were strong on Wednesday and continue to trade a couple cents better overnight. Beef exports for the week were strong for the 3rd week in a row at 18,000 mt. Cash index levels rose .22 on Wednesday, as the cash continues to look very supportive.



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