Schwieterman: Moderate cash cattle trade at $123, feeders down

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Corn                                             Estimated Fund Position
Trends
Short Term:Down                    Net Long Futures and Options: 60919
Long Term: Down                    Change: -3000
Overnight Trade: H +1 @7:30 AM


As expected, corn export sales were poor again with 225,400 MT of old crop and 59,300 MT of new crop sales. Everyone knows sales are going to be poor, so this is not market moving information. What is more interesting is the rising ethanol production figure, which is expected to continue to rise in coming weeks. There is still a possibility that USDA is underestimating ethanol usage. On the charts, the March corn has closed lower for 9 consecutive days, which I am told is the first time that has happened since 1980. The market is obviously oversold and due for a bounce, but that has been the case for days and hasn’t mattered yet.

Wheat                                           Estimated Fund Position
Trends
Short Term: Down                     Net Long Futures and Options: -67153
Long Term: Down                      Change: +1500
Overnight Trade: Chicago: H +4 KC: H +4 @7:30 AM


Wheat export sales were very good this week at 651,700 MT of old crop and 54,600 MT of new crop sales. A few weeks of numbers like this would get traders attention. The wheat managed a positive close yesterday and it is likely that we see some short covering to finish out the week. This export sales figure will help that effort and we should look for a recovery back to the $8.00 area in the March KW.

Soybeans                                        Estimated Fund Position
Trends
Short Term: Down                        Net Long Futures and Options: 70893
Long Term: Down                         Change: +2500
Overnight Trade: H -2 @7:30 AM


Soybean export sales were surprisingly poor due to cancellations and came in at -109,200 MT on the old crop and a positive 345,000 on the new crop. After yesterday’s recovery the market didn’t need any bad news, but now the market is at risk of a retest of yesterday’s low. The sales will probably be back on track when the Chinese New Year is over, so the bad news probably won’t last long. The recovery process is due to begin.

Live Cattle
Trend
Short Term: Down
Long Term: Down
Opening Calls: 20-30 Lower


Live cattle futures closed moderately lower on Wednesday, with open interest still on the rise. Continued modest cash trade at $123 was seen through the region, as lower board prices strengthened the basis somewhat. Overnight business remains weak, with front months trading from 25-50 lower. We are seeing some divergences on the daily charts, indicating that some sort of recovery could be just around the corner.

Feeder Cattle
Trends
Short Term: Down
Long Term: Down
Opening Call: 30-50 Lower


Feeder cattle futures posted another day of 200 point losses, with new sellers remaining on the rise. Open interest jumped another 995 contracts as the market moved to new contract lows out thru the May contract. August posted a new low in overnight trade. Corn prices were narrowly mixed on Wednesday and are trading modestly higher this morning. Cash trade in Dodge City on Wednesday was a good 5-6 lower than week ago levels on yearlings.



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