Schwieterman: Feeder cattle futures post major turnaround

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Corn                                                Estimated Fund Position
Trends
Short Term:Down                        Net Long Futures and Options: 57919
Long Term: Down                        Change: -3000
Overnight Trade: H +6 @7:30 AM


The March corn made its 10th consecutive lower close yesterday, but is finally seeing some strength in the overnight trade and the market has taken out the previous two day’s highs. A positive close today would confirm that we are going to see an upward correction. A move to $7.24 next week is not out of the question.

Wheat                                           Estimated Fund Position
Trends
Short Term: Down                      Net Long Futures and Options: -69153
Long Term: Down                       Change: -2000
Overnight Trade: Chicago: H +7 KC: H +7 @7:30 AM


The March KW posted an outside day lower on the chart yesterday, which adds to the negative look of the chart. However, so far this morning it looks like we are going to see a short covering bounce in the grains, so perhaps the wheat market can avoid follow through selling today. The wheat, after all, did see decent demand news yesterday, and the bulk of the HRW belt is still in miserable condition. Look for a rally back to $8.00.

Soybeans                                       Estimated Fund Position
Trends
Short Term: Down                       Net Long Futures and Options: 67893
Long Term: Down                        Change: -3000
Overnight Trade: H +8 @7:30 AM


The soybeans saw considerable pressure yesterday following the disappointing export sales report, but the March contract didn’t make a new low so the 62% retracement is still holding as support. For today the 40-day moving average at $14.29 will act as resistance. A close above that level would be a victory for the bulls and generate some short covering next week.

Live Cattle
Trend
Short Term: Down
Long Term: Down
Opening Calls: Mixed

Live cattle futures put in a strong reversal on Thursday, with April closing more than 2.00 off of session lows and taking out the previous days’ high. We see this action as a near term low in the market, with opportunity for recovery over the next month. February futures are now 3.00 above this weeks’ cash trade, which should raise asking prices for additional sales to at least $125 in the south and $200 in the north. Overnight futures prices are narrowly mixed, with February firm and deferred contracts steady to slightly lower. Beef exports for last week were poor.

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


Feeder cattle futures posted a major turnaround on Thursday, with the March thru October contracts posting key reversals. March settled 3.50 above session lows and back to a slight premium to the days’ cash index of 142.42. Overnight corn values have caught a bid and are trading 7 cents higher as we write. If the corn is able to hold onto its’ early morning strength, feeder rallies could remain limited. Outside market influences are mixed at best, with a three day weekend ahead.



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