Schwieterman: Higher boxed beef pulls up cattle futures

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Corn                             Estimated Fund Position
Trends – December Contract
Short Term: Up            Net Long Futures and Options: -204991
Long Term: Down        Change: -6000
Overnight Trade: Z +2 @7:30 AM


There was no follow through selling after yesterday’s poor close, which isn’t much of a surprise given the choppy nature of the market. It was a little disappointing that the corn didn’t gain more support from the weak Dollar, but the good yield reports we keep hearing are probably weighing on everyone’s mind. I’m looking for the December corn to drift down to $4.32, but I certainly don’t look for the market to get in a hurry about getting there.

Wheat                             Estimated Fund Position
Trends – December Contract
Short Term: Up               Net Long Futures and Options: -57219
Long Term:Up                 Change: +1000
Overnight Trade: Chicago: Z +6 KC: Z +7 @7:30 AM


The December KW is back to testing the recent highs. Monday’s weakness is beginning to look like an anomaly and this market is ready to move higher. The weak Dollar and problems around the world are very support to our wheat, and each time the Paris Milling wheat makes a new high, like it is today, we become more competitive in the world market. If we start seeing more sales into North Africa we will definitely have another leg higher in the wheat.

Soybeans                       Estimated Fund Position
Trends – November Contract
Short Term: Up              Net Long Futures and Options: 92218
Long Term: Down           Change: -3000
Overnight Trade: X +7 @7:30 AM

The November soybeans reached the highest level since September 30th thanks to the weak Dollar and strong exports. The market isn’t particularly overbought, but I do question how far the market can move right now with a potential yield increase ahead of us. I think that the market will have an easier time moving higher once we have a better idea what the crop size is. Be careful chasing rallies.

Live Cattle
Trend
Short Term: Up
Long Term: Up
Opening Calls: 10-30 Higher


Live cattle futures closed sharply higher on Tuesday, with boxed beef strength and record high equities providing support. Open interest was up 3,268 contracts on the rally, with December posting triple digit gains. Overnight activity has been higher as well, with October posting new highs for the past 8 ½ months. December and beyond could be getting into some major resistance levels that held the market on its’ last run higher. Feedlots are firm with asking prices of $131-$132 in the south and $205 or better up north.

Feeder Cattle
Trends
Short Term: Up
Long Term: Up
Opening Call: 10-30 Higher


Feeder cattle futures came out of their recent slumber on Tuesday, with triple digit gains in all but the October contract. Weaker corn futures and higher live cattle are good formula for higher feeders. Overnight corn values are better but feeders have continued their positive momentum, with gains of .15-.40 as we write. We expect that overnight lows near 168.40 in the November contract may be decent near term resistance.



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