Schwieterman: Live cattle futures closed sharply higher on Tues.

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Corn Estimated Fund Position

Trends – July Contract

Short Term:Down Net Long Futures and Options: 75437

Long Term: Down Change: -4000

Overnight Trade: N -2 @7:30 AM

The December corn continues to hold above the $4.35 level. For the most part the weather looks good for the Corn Belt, but there is a little bit of concern that Monday’s stocks and acreage numbers may be friendly, which is keeping traders from pushing the market lower. Unless we see some very bullish information Monday we will probably end up seeing the support fail then and the market begin its push to $4.00.

Wheat Estimated Fund Position

Trends – July Contract

Short Term: Down Net Long Futures and Options: -50849

Long Term: Down Change: -4000

Overnight Trade: Chicago: N -3 KC: N -2 @7:30 AM

Wheat continues to weaken despite the wet weather in Kansas. The July KW hasn’t made a new low for the move, but the Chicago and Minneapolis contracts have. The Paris Milling Wheat also made a new low for the move overnight, which keeps traders thinking that we are overpriced on the world market. $6.96 is still a potential downside target for the July KW.

Soybeans Estimated Fund Position

Trends – July Contract

Short Term: Down Net Long Futures and Options: 6574

Long Term: Down Change: -4000

Overnight Trade: N Unch @7:30 AM

Soybeans are much like the corn in the sense that it seems that traders are waiting for Monday’s reports before making another move. The conventional wisdom says that the November beans should be falling, but they aren’t because the stocks and acreage figures are still big unknowns. Plus, we still haven’t got the old crop supply and demand situation sorted out and if the bears don’t get their big stocks numbers the July and August contracts will post big gains.

Live Cattle

Trend

Short Term: Up

Long Term: Up

Opening Calls: 60-90 Higher

Live cattle futures closed sharply higher on Tuesday, with the spot June contract finishing limit higher for the session. The strength in the futures market actually moved June to premium to last weeks’ cash trade for the first time in recent months. Open interest gained 4,663 contracts on the rally, suggesting new buyers still willing to enter this market. Strength in the beef market continues to be a catalyst to the historic rally. Asking prices in the south look solid at $152+, with northern asking prices near $242 in the beef. Profit taking is certainly possible but momentum is firmly in the bull camp.

Feeder Cattle

Trends

Short Term: Up

Long Term: Up

Opening Call: 150-200 Higher

Feeder cattle futures traded limit higher late in the session on Tuesday, settling just off of those levels. Continued weakness in the corn market and strength in the deferred live cattle remain the driving forces. The market is firming again this morning, with the lead August contract gaining well over half a limit as we write. Corn prices are dropping another 2-3 cents in overnight trade. Cash index levels rose another 1.09 on Tuesday to reach 207.63.



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