Corn                                         Estimated Fund Position
Short Term: Down                  Net Long Futures and Options: 12003
Long Term: Down                  Change: +3000
Overnight Trade: N -1 3/4 Z -2 3/4
Opening Calls: 1-2 Lower

By the end of yesterday’s trading session the corn had returned to the upper end of the recent trading range, but there was no follow through buying overnight. Strong corn demand has supported the market despite the weakness in the outside markets, but nervousness about the world economy and weakness in the crude oil is preventing speculators from chasing the market higher. Plan on another day of consolidation with good buying interest on the breaks.

Wheat                                     Estimated Fund Position
Short Term: Down                 Net Long Futures and Options: -58278
Long Term: Down                 Change: +2000
Overnight Trade: Chicago: N -2 1/4 KC: N -1 1/2
Opening Calls: 1-2 Lower

After a great deal of volatility the July KW posted an outside day higher on the charts. There was, however, no follow through buying. Technical indicators are oversold and the market is due for a correction, but right now it appears that the market will correct by going sideways. A move towards $5.00 in the July would be a great selling opportunity.

Soybeans                               Estimated Fund Position
Short Term: Down                Net Long Futures and Options: +1818
Long Term: Down                Change: +2000
Overnight Trade: N +1/4
Opening Calls: 1-2 Higher

The bull spreaders were at work yesterday and again overnight due to the strong up front demand. The US is competitive with S. American beans so we could see the Chinese continue to make purchases. The $9.50 area is proving to be strong resistance in the July contract and it will likely be tested again today. A close above $9.50 would point to a move back to $9.70.

Live Cattle
Short Term: Down
Long Term: Down
Seasonal: Down
Opening Calls: 20-40 Lower

Live cattle futures continued to get pressure from outside markets on Thursday, with new lows for the move posted in all but the August contract. Equity markets have started weakening again this morning, providing some additional pressure on livestock. The extreme oversold conditions heading into another supportive on feed report could provide a good rebound in the cattle if equities and other outside markets can just stabilize. Packer margins continue to widen, providing windfall profits and plenty of room for spending. The downward momentum is going to be tough to reverse, even though tight supplies and huge packer margins remain in tact. COF report estimates show average on feed at 96.7%, placements 102.3% and marketings 100.2%.

Feeder Cattle
Short Term: Down
Long Term: Down
Seasonal: Up
Opening Call: Lower

Feeder cattle futures closed below key support levels on Thursday, with next downside target 109.25-109.40 basis the active August contract. Early stability in the overnight trade is giving way, as equity markets weaken again. Corn prices have been steady to firmer over the past three sessions, but are showing a little weakness in overnight trade. Cash index levels fell sharply on Thursday, with single day averages dropping below 109.00 for the first time in weeks. If placement numbers come in as expected this afternoon, we consider those figures supportive, even though they are slightly above year ago levels.