Schwieterman: Live cattle futures higher across the board

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Corn                               Estimated Fund Position
Trends – December Contract
Short Term:Down          Net Long Futures and Options: -206991
Long Term: Down          Change: +4000
Overnight Trade: Z +1/2 @7:30 AM


The December corn spent most of the overnight session trading higher. The market made a move up towards trend line resistance, which lies at the $4.40 area. Another test of the trend line either today or tomorrow is likely, but one should not expect more strength than that at the moment. Eventually we will see a move down to the $4.25 area.

Wheat                            Estimated Fund Position
Trends – December Contract
Short Term: Up              Net Long Futures and Options: -58219
Long Term:Up                Change: -1000
Overnight Trade: Chicago: Z -4 KC: Z -4 @7:30 AM


The December KW is still trading sideways. It still seems to me that this market could see a deeper correction and that in the long run this market still has very good bullish potential. At the same time it appears that nobody wants to try and push the market in either direction until we see some data from the government. Buy breaks if we get them.

Soybeans                        Estimated Fund Position
Trends – November Contract
Short Term: Down          Net Long Futures and Options: 85218
Long Term: Down           Change: +3000
Overnight Trade: X -3 @7:30 AM


The soybeans are still stuck in between supply fears and great demand. It is hard to say how much business the Chinese have done, but when we finally get the reports there will be some awfully big numbers. The question of course is, will there be a yield increase that offsets all that demand? On the chart, the $12.60 area is very critical support in the November contract. Failure there would open the door to a move down to $11.75.

Live Cattle
Trend
Short Term: Up
Long Term: Up
Opening Calls: 10-30 Lower


Live cattle futures traded higher across the board on Monday, with the front three months .65-.72 higher at settlement. The October contract posted its highest trade since the 28th of March. There were 33 fresh deliveries against the October, with dates partially through the 1st of October. Show lists were generally smaller than a week ago, with our list actually up 2%. A correction from the recent gains in the fats is very realistic from current levels. We remain supportive of this market on any decent sell off. Open interest continues to climb, jumping 3,784 contracts on Monday.

Feeder Cattle
Trends
Short Term: Up
Long Term: Up
Opening Call: 40-80 Lower


Feeder cattle futures reversed early gains on Monday to close mixed to mostly lower on the day. Overnight business has been more one sided, with near triple digit losses in the Nov-Mar time frame. Corn traded 4 cents higher on Monday and is modestly higher as we write. Cash trade remains supportive but we expect some weakness from the record highs that we have reached in the past week. The market is just a couple weeks away from settling the October contract to an index that doesn’t exist until the Government goes back to work.



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