Schwieterman: Live cattle futures close stronger with new money

Corn                                                 Estimated Fund Position
Trends
Short Term: Down                        Net Long Futures and Options: 169167
Long Term: Down                         Change: +13000
Overnight Trade: N +1 1/2 Z -1/2
Opening Calls: Mixed

Despite all the talk of early planting, corn planting progress was estimated at 3% complete compared with 2% last year. That seemed to be a little disappointing and led to some bear spreading when the overnight trade got started, but by the end of the session the bull spreaders were back. The May contract continues to separate from the July and the old crop is distancing itself from the new crop. Look for the May and July contracts to reach the $6.75 level soon.

Wheat                                               Estimated Fund Position
Trends
Short Term: Down                          Net Long Futures and Options: -77103
Long Term: Down                           Change: -2500
Overnight Trade: Chicago: N -7 KC: N -3
Opening Calls: 5-7 Lower

Wheat is still the weak link. Even Minneapolis wheat was lower overnight. There is only so much support the corn can provide the wheat market. At some point we have to see better demand. The rain in the HRW Belt doesn’t help matters either. Wheat supplies are already abundant and a good crop would make supplies burdensome.

Soybeans                                        Estimated Fund Position
Trends
Short Term: Up                              Net Long Futures and Options: 198708
Long Term: Up                               Change: +8000
Overnight Trade: N -6 1/4 X -6 3/4
Opening Calls: 5-7 Lower

The soybeans had a setback overnight, but it still looks temporary. The market keeps getting fed bullish news and traders are beginning to anticipate bullish numbers from USDA in both the April and May supply and demand reports. Buy breaks and look for the July contract to reach $14.70 soon.

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

Live cattle futures traded both sides of unchanged on Monday, finishing near session highs and well over a Dollar off of session lows. The stronger close came on the back of new money, as open interest rose 2,320 contracts on the day. Show lists were smaller overall, with our list dropping 18% from a week ago and only carrying 3% over from last week’s list. Overnight activity has been mixed, with the front three months showing the most strength. Outside market influences are slightly negative to start the day.

Feeder Cattle
Trends
Short Term: Down
Long Term: Down
Opening Call: 10-20 Higher

Feeder cattle futures closed mixed to mostly higher on Monday and as much as 2.00 off of session lows. Strength in old crop corn contracts kept a lid on any additional rally effort for the day. Overnight activity has been mostly firmer, in the wake of Monday’s recovery. Open interest fell more than 3,100 contracts for the day, suggesting short covering was leading the rally effort. The board remains sharply discounted to the current cash index, with April nearly 4.00 lower.

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