Schwieterman: Corn's 3-day streak drives losses for feeder cattle

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Corn                                                       Estimated Fund Position
Trends
Short Term: Down                              Net Long Futures and Options: 53485
Long Term: Down                               Change: +8000
Overnight Trade: H +3 @7:30 AM


Corn export sales were horrible again, which should have been expected. Old crop sales came in at 12,600 MT and new crop had cancellations of 11,600 MT. USDA is definitely going to cut the export estimate in tomorrow’s report. There has been evidence that business is picking up, but we will have to see a significant improvement in sales to inspire any speculative buying. On the charts, the market is creeping higher, but traders are still waiting for tomorrow’s data before making any aggressive moves.

Wheat                                                   Estimated Fund Position
Trends
Short Term: Down                              Net Long Futures and Options: -82295
Long Term: Down                               Change: -2000
Overnight Trade: Chicago: H +6 KC: H +7 @7:30 AM


Wheat export sales were poor as well at 233,700 MT. There is a lot of talk that China is buying or will buy US wheat and Egypt is supposedly in the market for US wheat, but we haven’t seen the proof yet and traders will have to see the sales materialize before getting excited about the wheat market. Like the corn, plan on yet another day of consolidation ahead of the reports.

Soybeans                                               Estimated Fund Position
Trends
Short Term: Down                                Net Long Futures and Options: 49525
Long Term: Down                                 Change: -2000
Overnight Trade: H -1 @7:30 AM


Soybeans sales were good again at 321,800 MT despite the recent cancellations. The number may not seem high, but it is still much more than we need each week to meek USDA expectations. I look for an increase in the export estimate in tomorrow’s report. On the charts it is just the same old story, more consolidation ahead of the report.

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


Live cattle futures closed sharply lower on Wednesday, with the lead February contract off 1.00 on settlement. The selloff came with nearly 6,000 drop in open interest. Cash trade remains very limited, with asking prices of $129+ in the south and $207 up north. Look for most of the cash trade to wait for Friday, unless the board has another hard down day to tighten the basis. The April contract is taking out trend line support in overnight trade. A close below that level will allow for continued technical selling.

Feeder Cattle
Trends
Short Term: Down
Long Term: Up
Opening Call: Mixed


Feeder cattle futures posted triple digit losses in the front three trading months on Wednesday. Overnight trade has been two sided, with a slightly weaker bias. Corn has had three positive closes in a row, with overnight prices trending modestly higher once again. Cash index levels are now within a dollar of the spot January futures price. Friday’s 11:00 am grain report is expected to produce wide price swings for the grain and the feeders.



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