Schwieterman: Grilling season pushes cutout values 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 -1 @7:30 AM

The corn was mixed overnight with the market giving up some of yesterday’s bull spreading. There is still concern about planting progress, which is keeping the market supported and yesterday’s gains may encourage follow through buying later in the day. A move back above $5.00 in the December contract is possible, but if it happens the weather will have to stay cool and wet to keep the threat of planting delays alive and the market moving higher.

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 -4 KC: N -5 @7:30 AM

The wheat gave up yesterday gains in overnight trade. Rain in the forecast for parts of the HRW Belt seems to be the best reason for the pressure. Many areas are going to be missed, which means there is a good chance crop condition ratings will be lower once again on Monday. In the meantime, the charts suggest further weakness in the market and the July KW is likely headed for the $7.25 area.

Soybeans                     Estimated Fund Position

Trends – July Contract

Short Term: Up           Net Long Futures and Options: 136012

Long Term:Up                        Change: -6000

Overnight Trade: N -6 @7:30 AM

The soybeans were weak again overnight and the July contract is now at trend line support. The talk is still focused on Chinese default and US imports. As we move lower the talk will likely shift back to the fact that we still haven’t got the old crop balance sheet figured out. In the short run, if the trend line fails today, the next support lies at the $14.50 area. As we approach $14.50 look for the talk to shift back to the fact that we still don’t have the old crop supply and demand balance sheet resolved.

Live Cattle

Trend

Short Term: Down

Long Term: Down

Opening Calls: 20-40 Lower

Live cattle futures posted moderate gains on Tuesday, with deferred contracts seeing the most upside movement. Cutout values continue to push higher, as we work our way into the grilling season. Overnight trade has softened, with June-Oct giving up .50-.60 as we write. Open interest in the lead April contract remains quite high, with only 6 trading days remaining on the contract. Early cash bids of $143-$144 in the south remains a good

$4 under asking prices at midweek. Open interest increased overall on Tuesday’s rally but the market needs to see a close above yesterday’s highs to confirm any near term lows in the charts.

Feeder Cattle

Trends

Short Term: Down

Long Term: Up

Opening Call: 10-30 Lower

Feeder cattle futures followed the fats to moderate gains on Tuesday, with the gains coming in spite of a solid advance in the corn market. The cash index was even with the previous day and remains nearly 1.00 discount to the May board price. Overnight corn prices are narrowly mixed, with feeders softer across the board. Friday’s cattle on feed report is expecting slightly higher placements for the month of March, with average estimates up 1.7 percent.



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