Schwieterman: Cattle futures mixed, corn futures see strong gains

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Corn                                         Estimated Fund Position
Trends
Short Term: Up                     Net Long Futures and Options: 86634
Long Term: Up                      Change: +11000
Overnight Trade: H -1 @7:30 AM


Yesterday the March corn posted an outside day higher on the chart and closed at the highest level since December 6th. The close above $7.35 looks very look and the market is on track to reach $7.67 soon. Export sales were poor at 186,800 MT of old crop and 66,500 MT of new crop, but the poor total was expected and shouldn’t derail the rally for long if at all.

Wheat                                     Estimated Fund Position
Trends
Short Term: Up                     Net Long Futures and Options: -51292
Long Term: Down                Change: +4000
Overnight Trade: Chicago: H -3 KC: H -3 @7:30 AM


Like the corn, the March KW also posted an outside day higher on the chart and reached the 40-day moving average objective overnight. The wheat market is still lagging behind the corn and soybeans and hasn’t moved through the January high yet and there is still strong overhead resistance. Export sales were disappointing at 293,600 MT of old crop and 94,300 MT of new crop. We still have lots of talk about US wheat being the cheapest in the world, but that doesn’t mean anything without sales.

Soybeans                                Estimated Fund Position
Trends
Short Term: Up                      Net Long Futures and Options: 76481
Long Term:Up                        Change: +9000
Overnight Trade: H -10 @7:30 AM


The soybeans are giving back a big part of yesterday’s strong gains thanks to some better than expected rainfall in Argentina. It will take some time to find out the actual rainfall numbers, but if they are good we will end up seeing the soybean fall back to trend line support. Export sales were huge again, but mostly weighted towards the new crop, which mutes the market impact. Old crop sales came in at 386,000 MT and new crop and 867,000 MT.

Live Cattle
Trend
Short Term: Up
Long Term: Down
Opening Calls: 20-40 Higher


Live cattle futures closed mixed on Wednesday, with the front three months modestly lower and deferred contract modestly higher. Cash trade in Kansas and Texas saw moderate trade volume at the $125 level, which is $3 better than a week ago. Nebraska remains quiet, with asking prices of $203+ in the beef and $127+ in the cash market. More trade is expected in the south as well, with asking prices of $126-$127. Friday’s inventory report is expected to be friendly, with average estimates of all cows and calves 98.2% and a calf crop of 97.9%.

Feeder Cattle
Trends
Short Term: Up
Long Term: Down
Opening Call: 20-40 Higher


Feeder cattle futures settled mixed on Wednesday, with modest gains in the March, while deferred contracts were moderately to sharply lower. Strong gains in the corn futures led to a breakout close and double digit gains in the old crop months. Fridays report should be friendly enough to offset some of the strength in corn. Overnight gains are ranging from .30-.60 as we write.



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