Schwieterman: Cash bids start early, corn weaker overnight

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Corn                                              Estimated Fund Position
Trends
Short Term: Up                          Net Long Futures and Options: -21169
Long Term: Down                     Change: -9000
Overnight Trade: N -7 Z -8 @7:30 AM


Market watch The corn finished poorly yesterday and saw plenty of follow through weakness overnight. The planting delay concerns haven’t carried much weight since the limit higher move on Monday. The July contract has given up nearly half of the run up from last week’s low. $6.39 and $6.32 will be the support levels to watch today. Rain, snow, and cold temperatures in the forecasts should provide support on today’s break.

Wheat                                           Estimated Fund Position
Trends
Short Term: Up                            Net Long Futures and Options: -39058
Long Term:Up                              Change: +5000
Overnight Trade: Chicago: N -11 KC: N -9 @7:30 AM


As expected the wheat tour found less yield potential than last year. Much of the wheat they see today will be much worse than what they say yesterday. The July KW closed above the pre-stocks report highs, which looks good on the charts, but we did see considerable pressure overnight despite the US breaking hard. The combination of poor planting conditions in the Corn and HRS Belts, along with the poor growing conditions in the HRW Belt, should make this break a buying opportunity.

Soybeans                                      Estimated Fund Position
Trends
Short Term: Up                            Net Long Futures and Options: 48963
Long Term:Up                              Change: -5000
Overnight Trade: N -22 X -11 @7:30 AM


Soybeans were under heavy pressure overnight, due in part to yesterday’s poor technical performance and due in part to ideas that there will be more soybean acres. Basis levels continue to improve in Illinois, which makes it hard for me to want to be short old crop beans. New crop is a different story and I would look for bull spreads to work in the long run.

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


Live cattle futures closed moderately lower on Tuesday, after testing resistance above the 50 day moving average in the June. April expired at 128.40, which may lend support to the new lead contract. Some cash offers as high as $127 in the south surfaced on Tuesday. The firm bids this early in the week should bode well for eventual cash trade of steady to better money. We wouldn’t be surprised to see June trade down to the continuation chart gap at 121.50. Outside market influences are all over the board, with a weaker Dollar unable to support  equities or commodities.

Feeder Cattle
Trends
Short Term: Up
Long Term: Down
Opening Call: 20-30 Higher


Feeder cattle futures were unable to take advantage of a weak close in the corn market on Tuesday. Continued weakness in corn overnight has been enough to lift the feeders to modest gains in early morning activity. Cash index levels continue to trail the lead May feeder contract by nearly 4.00 heading into midweek. We’ve seen enough improvement in many of the pasture regions of the plains to promote solid demand for grass cattle. We look for feeders to begin finding support at current trading levels.



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