Schwieterman: Live cattle reversed early strength, close low Wed.

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Corn Estimated Fund Position

Trends – December Contract

Short Term:Down Net Long Futures and Options: -901

Long Term: Down Change: -5000

Overnight Trade: Z +1 @7:30 AM

Corn export sales were good at 363,000 MT of old crop and 381,600 MT of new crop sales. We are closing in on the yearly sales estimate for the old crop, but I doubt that USDA will make an upward revision to the estimate this month because it will be difficult to actually ship much more than 1.9 billion bushels with so little time left in the crop year. On the chart, the $4.00 support failed in December contract, which makes the $3.80 area the next downside objective. The market is oversold and we may see some short covering ahead of tomorrow’s report, but as long as the weather remains non-threatening, the trend will remain down.

Wheat Estimated Fund Position

Trends – December Contract

Short Term: Down Net Long Futures and Options: -67121

Long Term: Down Change: -1500

Overnight Trade: Chicago: Z +3 KC: Z +3 @7:30 AM

Wheat export sales were a little lower than expected at 338,100 MT. It will definitely take more than this to get speculators excited about the wheat market. The market was higher overnight, but we will have to see the December KW move above $6.75 to encourage any short covering. Attitudes remain negative and the biggest problem the wheat has right now is the weakening corn and soybean markets.

Soybeans Estimated Fund Position

Trends – November Contract

Short Term: Down Net Long Futures and Options: -46938

Long Term: Down Change: -1500

Overnight Trade: X +7 @7:30 AM

Soybean export sales were good at 56,300 MT of old crop and 526,000 MT of new crop sales. China was a buyer of both old crop and new crop. The November contract has held at $11.00 so far and perhaps we won’t see any more pressure ahead of the report. However, like the corn, as long as the weather doesn’t make a dramatic change the trend will remain down.

Live Cattle

Trend

Short Term: Up

Long Term: Up

Opening Calls: Mixed

Live cattle reversed early strength to close sharply lower on Wednesday. The reversal has become a pattern this week and could lead to additional long liquidation from these still lofty levels. Overnight trade attempted another recovery effort, with weakness in the feeders spilling over into the live cattle by early morning. Cash trade could take better shape today but is likely to wait until Friday. Asking prices of $160+ in the south remain intact but could waiver with additional weakness in the futures. Beef prices were strong again on Wednesday.

Feeder Cattle

Trends

Short Term: Up

Long Term: Up

Opening Call: 40-60 Lower

Feeder cattle futures closed sharply lower to limit down on Wednesday, with a five dollar trading range. Overnight activity remains weak, with pressure coming in after an early recovery effort. Corn prices are up a couple cents in overnight trade, but remain locked in a down trend heading into tomorrow’s supply demand report. The fact that we will be seeing the availability of grass cattle over the next 40-50 days could pressure the feeders from a fundamental standpoint.



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