Schwieterman: No indication corn is done heading lower

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Corn                                               Estimated Fund Position
Trends
Short Term: Down                     Net Long Futures and Options: 50525
Long Term: Down                      Change: +4000
Overnight Trade: H -1 @7:30 AM


The overnight corn trade has been choppy and mixed in very low volume. There is still no indication that this market is done heading lower, but hopefully the fact that expectations are for a cut in corn production and a historically low quarterly stocks estimate will keep the market supported. Also, there was a large sale of corn to unknown destinations announced yesterday which is a sign that maybe demand is about to pick up. A surge is sales would be very beneficial to the market.

Wheat                                           Estimated Fund Position
Trends
Short Term: Down                      Net Long Futures and Options: -79295
Long Term: Down                       Change: +1500
Overnight Trade: Chicago: H +2 KC: H +3 @7:30 AM


It looks like another day of consolidation for the wheat market. The positive close yesterday and the strength overnight are encouraging, but there is no indication of a change in trend and there is no reason to expect one until after Friday’s numbers. A move down to $7.90 in the March KW is still a possibility and it will take a close over $8.25 to generate much short covering.

Soybeans                                      Estimated Fund Position
Trends
Short Term: Down                      Net Long Futures and Options: 53525
Long Term: Down                       Change: +7000
Overnight Trade: H Unch @7:30 AM


The soybeans posted solid gains yesterday and have seen some follow through buying overnight, but like the other markets there is still no indication of a change in trend. The fear is that Friday’s numbers will be bearish due to higher production and for the moment the S. American weather isn’t causing a great deal of concern. A close above $14.00 in the March contract would generate some short covering, but the market hasn’t got there yet.

Live Cattle
Trend
Short Term: Down
Long Term: Up
Opening Calls: 10-20 Lower


Live cattle futures closed narrowly mixed on Monday, as open interest continues to build in this complex. Show lists are mixed, with larger numbers in Texas the most significant change. Our list was 11% lower than a week ago, with 22% carried over from last week. Overnight activity is modestly lower as we write, with February holding its’ 5.00 premium to last weeks’ cash trade. Asking prices in the south are $130+ , with northern feedlots priced at $207 or better.

Feeder Cattle
Trends
Short Term: Down
Long Term: Up
Opening Call: Mixed


Feeder cattle futures recovered from a midday selloff to close narrowly mixed on Monday. Corn prices were up 4-5 cents on Monday and are trading near unchanged in overnight trade. Feeders have been in .40 range in overnight trade, with current prices near Monday’s closing range. Cash index levels have moved above the 150.00 level, but remain a full 3.00 below the January futures.



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