Schwieterman: Feeder, cattle futures move higher Wednesday

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Corn                            Estimated Fund Position
Trends – December Contract
Short Term:Down       Net Long Futures and Options: -214799
Long Term: Down       Change: -3000
Overnight Trade: Z +3 @7:30 AM


Corn export sales were very good again at 945,100 MT. The current sales pace is more than double last year and at strong enough pace that we can handle a big slowdown when Argentine corn becomes available. The market has lost downside moment and is correcting higher as we approach option expiration. There are many owners of in the money put options that want to take profits and I can’t rule out a move to $4.30 or better by tomorrow.

Wheat                           Estimated Fund Position
Trends – December Contract
Short Term: Down        Net Long Futures and Options: -91715
Long Term: Down         Change: -2000
Overnight Trade: Chicago: Z +3 KC: Z +3 @7:30 AM

Wheat export sales were back on track at 618,000 MT. Consistent numbers like that would imply USDA’s current export estimate is too low. Yesterday we saw a sale of 110,000 MT of SRW to Egypt which was a bit of a surprise and means we are very competitive in the world market. The Paris Milling wheat made a new high for the move overnight, which is also supportive. Cross your fingers for a short covering rally back to $7.35 in the December KW.

Soybeans                       Estimated Fund Position
Trends – January Contract
Short Term: Up              Net Long Futures and Options: 71224
Long Term: Down          Change: -2000
Overnight Trade: F +10 @7:30 AM


As expected the soybean export sales were huge at 1.38 MMT. Bean oil was huge at 95,800 MT and the meal was a little disappointing at 116,000 MT. Overall it was another great demand week, but the concern lies ahead of us with the S. American crop. So far the market is just consolidating today. The critical support in the January contract lies at Tuesday’s low of $12.68 ¼.

Live Cattle
Trend
Short Term: Down
Long Term: Down
Opening Calls: 10-20Lower


Live cattle futures closed moderately higher on Wednesday, with deferred contracts garnering most of the support. With cash trade yet to develop, trade will likely be two sided and choppy until cash is established. We look for trade to be a full dollar lower this week. Slaughter pace has picked up compared to a week ago but remains sluggish verses historical data. The on feed report should be supportive to front months and more neutral to the deferred.

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


Feeder cattle futures posted solid gains on Wednesday, but remain in negative trend as we edge toward the holiday season. Corn prices are gaining 2-4 cents in overnight trade, which is putting some modest pressure on the feeders. We do need to remind followers that a 10% rise in October placements is still the second lowest placement number for that month in the past 10 years. Cash index levels remain on a decline heading into weeks’ end. It has dropped .50 since peaking on Monday.



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