Schwieterman: Corn values trying to strengthen

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Corn                                             Estimated Fund Position
Trends – December Contract
Short Term:Down                     Net Long Futures and Options: -207805
Long Term: Down                      Change: -3000
Overnight Trade: Z +4 @7:30 AM


The corn market is relieving the oversold condition by going sideways and consolidating. $4.67 looks like a reasonable upside target for today. One can’t expect too large of gains since the forecasts still look favorable and the major bullish market factor is the size of the trading funds net short position. Export sales were nothing to get excited about with old crop sales at 290,100 MT and new crop at 220,900 MT. Chinese buying has slowed and they are probably waiting for the market to fall below $4.50.

Wheat                                           Estimated Fund Position
Trends – September Contract
Short Term: Down                     Net Long Futures and Options: -78002
Long Term: Down                      Change: -3000
Overnight Trade: Chicago: U +1 KC: U +2 @7:30 AM


Wheat export sales were good again at 726,200 MT. This is exactly what the market needs and there is a chance that USDA raises the export estimate in Monday’s report. The market still isn’t going anywhere, but it isn’t falling apart either. Monday’s report should remind traders that the fundamental outlook of the wheat market is much better than that of the corn and leading to more wheat – corn spreading.

Soybeans                                     Estimated Fund Position
Trends – November Contract
Short Term: Down                     Net Long Futures and Options: 16164
Long Term: Down                       Change: -3000
Overnight Trade: X +10 @7:30 AM


Soybean export sales were very good again with 79,400 MT of old crop and 1.02 MMT of new crop sales. The Chinese still need our beans, but it looks like we will produce plenty for them to buy. The market did see short covering overnight because there is uncertainty regarding Monday’s report, but after that has come and gone we will go right back to looking at the forecasts, which at the moment, look favorable. I’m hoping for a rally back to $12.13 in the November contract, but I’m not counting on it.

Live Cattle
Trend
Short Term: Up
Long Term: Up
Opening Calls: Sharply Higher


Live cattle futures closed Mixed on Wednesday but the big news came after the pit close, with Tysonbannouncing that they will no longer kill Zilmax fed cattle after the 6th of September. October cattle have rallied toblimit higher overnight, with pools of more than 500 contracts still trying to buy. The news should not only take tonnage off the market, but should create more activity in the cash purchasing sector of the market each week. No new deliveries were posted against the August contract and all 60 retenders were demanded. Cutouts were higher to sharply higher on Wednesday.

Feeder Cattle
Trends
Short Term: Up
Long Term: Up
Opening Call: Sharply Higher

Feeder cattle futures closed with triple digit losses on Wednesday but have gained it all back and then some on spillover strength from the fat market. Corn values are trying to strengthen, which may limit the buying in the feeders. Cattle feeders will be trying to compute how much feed costs will rise if the growth additives are taken out of the mix. Today could prove to be a major swing day in the industry.



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