Schwieterman: Corn futures, feeder cattle futures lower Wednesday

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Corn                                      Estimated Fund Position
Trends – March Contract
Short Term:Down                    Net Long Futures and Options: -174263
Long Term: Down                    Change: -4000
Overnight Trade: H +1 @7:30 AM


Corn export sales were very good at 827,100 MT for the old crop and China was listed as a buyer, which is a little strange considering all the talk about the Chinese rejecting so much corn due to GMO issues. The market is still oversold and consolidating. The combination of export sales and ethanol production is supportive and could very well result in more short covering at some point before the end of the year. A move back to the 40 and 50-day moving averages is still likely.

Wheat                                      Estimated Fund Position
Trends – March Contract
Short Term: Down                   Net Long Futures and Options: -111496
Long Term: Down                    Change: -1000
Overnight Trade: Chicago: H +1 KC: H +1 @7:30 AM


Wheat export sales were very good at 656,100 MT of old crop wheat. Brazil was listed as a buyer and was rumored to have been a buyer overnight. Sales to Brazil imply that the Argentines are worried about their supplies, but that news seems to have been overcome by the Canadian and Australian production figures. The market is oversold and it is hard not to be a bottom picker with the March KW approaching the round number support at $6.50.

Soybeans                                 Estimated Fund Position
Trends – January Contract
Short Term: Up                        Net Long Futures and Options: 140672
Long Term:Up                          Change: +5000
Overnight Trade: F -4 @7:30 AM


Soybean sales came in at a marketing year low at 415,500 MT, but China was still the main buyer and the sales pace is still way more than we need and unsustainable. Yesterday’s weakness, however, suggests we are going to see some corrective action in the short run. $13.15 is the next support level in the January contract, so watch that closely. Failure at that level would probably send the market below $13.00 soon.

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


Live cattle futures closed lower to sharply lower on Wednesday, with moderate selling seen throughout the deferred contract. Cash trade remained on the sidelines, with most expecting cash to wait until Friday and possibly until after the on feed report. Estimates for the report have on feed at 95.4%, placements of 100.9% and 94.6% marketed. Overnight trade has been two sided, with a slightly higher bias. Equity markets exploded to all-time highs following the minutes from the FOMC meeting. Strength in equities historically supports the meat complex.

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


Feeder cattle futures saw a triple digit selloff in the January contract and moderate losses on deferred months. The extension of Tuesdays’ losses came in spite of another weak day in the corn futures. Cash index levels were off another .26 on Wednesday but remain over 1.00 premium to the January futures. Overnight corn values are modestly higher, with feeders seeing modest to moderate gains across the board.



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