Schwieterman: Cattle futures sharply higher Monday

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Corn                                            Estimated Fund Position
Trends
Short Term: Up                         Net Long Futures and Options: 73634
Long Term: Up                          Change: +6000
Overnight Trade: H +2 @7:30 AM


The corn posted a strong close yesterday and made another new high for the move overnight. S. American weather is still a concern, which is supportive to the market. A move to the $7.35 area in the March contract is likely today and it still looks like the market is headed to the $7.67 area at some point. A little bit of fresh demand news would get the market there quickly. Plan on more bull spreading and for the December contract to find stiff resistance at $6.00.

Wheat                                         Estimated Fund Position
Trends
Short Term: Up                         Net Long Futures and Options: -54292
Long Term: Down                    Change: +1000
Overnight Trade: Chicago: H +1 KC: H +1 @7:30 AM


The wheat is climbing, although at a very slow pace. Weather in the HRW Belt is still a huge concern, but it isn’t anything new or different. We need to see the export sales reports continue to be good to keep the market moving. On the charts it looks like the March KW is ready to make a move up to the 40-day moving average, which is at the $8.45 area, at some point this week, and with any luck maybe today.

Soybeans                                     Estimated Fund Position
Trends
Short Term: Up                           Net Long Futures and Options: 63981
Long Term:Up                             Change: +4000
Overnight Trade: H +4 @7:30 AM


Soybeans are the upside leader at the moment and they should be if Argentine weather is really a concern. We really can’t handle much extra demand this year, so if exports are shifted from S. America to N. America, supplies will be very tight this summer. I am still looking for the March contract to be back at $15.00 very soon.

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


Live cattle futures closed sharply higher on Monday, fueled by the bullish on feed report and news that Japan is officially accepting beef from 30 month old cattle. Show lists appear smaller in all regions this week, which should support higher asking prices into weeks’ end. Some profit taking from the strong two day rally is to be expected, with good support anticipated on any moderate selloff. Asking prices in the country have increased to $128 and $204.

Feeder Cattle
Trends
Short Term: Up
Long Term: Down
Opening Call: 30-50 Lower


Feeder cattle futures finished sharply higher on Monday, but due to a late rally in corn, finished off of session highs. Some additional weakness is being seen this morning, as corn pushed its’ way to within 3 cents of recent highs. March feeders finished more than a 5.00 premium to the current cash index, which may be a little aggressive considering the price of corn and the losses coming out of feedlots in recent months.



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