Schwieterman: Feeder cattle futures post triple digit gains

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Corn Estimated Fund Position

Trends – July Contract

Short Term: Up Net Long Futures and Options: 196543

Long Term: Up Change: +9000

Overnight Trade: N -3 @7:30 AM

Yesterday’s weak start quickly gave way to solid gains and a move back towards the recent highs. There was no follow through strength though, and the top of the range is still proving to be very strong resistance. Friday’s supply and demand report is expected to be friendly and tensions in Ukraine are supportive as well, but they may not be enough to overcome the good planting weather the Corn Belt is seeing right now. Look for two sided trading today.

Wheat Estimated Fund Position

Trends – July Contract

Short Term: Up Net Long Futures and Options: 11067

Long Term:Up Change: +4000

Overnight Trade: Chicago: N -6 KC: N -11 @7:30 AM

The wheat market has seen some profit taking overnight. The forecasts don’t look any better, so we can still plan on lower crop condition ratings Monday, and the way the extended forecasts look, we can probably look for lower condition ratings the following Monday as well. HRW production estimates keep shrinking with the condition ratings and we are now looking at what will probably be the 2nd or 3rd smallest HRW in modern history. $8.60 - $8.65 is still the next upside target for the July KW.

Soybeans Estimated Fund Position

Trends – July Contract

Short Term: Up Net Long Futures and Options: 106363

Long Term:Up Change: -3000

Overnight Trade: N -8 @7:30 AM

Soybeans were weaker again overnight, but so far the market is merely trading in the middle of yesterday’s range. The market is getting oversold and traders seem to have come to terms with the ideas of large imports keeping supplies in the US adequate. The market’s job is to now make sure we get those imports and that we don’t export anymore beans. Look for consolidation ahead of Friday’s report.

Live Cattle

Trend

Short Term: Up

Long Term: Up

Opening Calls: 10-30 Lower

Live cattle futures closed moderately higher on Tuesday, with gains of .67-.77 across the board. Cutout values did not fare as well, with prices lower and demand on the modest side. Export demand has been solid and could get a further boost from Mexico, which is in the process of removing the age restriction on imported beef. Open interest was up more than 2,000 contracts on Tuesday’s rally, suggesting that new money is willing to enter this market at these historically lofty levels. Some light cash trade in the north to regional packers was seen on Tuesday at fully steady prices from a week ago.

Feeder Cattle

Trends

Short Term: Up

Long Term: Up

Opening Call: Mixed

Feeder cattle futures posted mostly triple digit gains on Tuesday, an impressive day in the face of nearly .10 gains in the corn market. The cash index set new all-time highs of 181.10 on Tuesday and is seeing daily averages moving into the mid 180’s. Overnight business has been two sided, with May and August gaining .20-.30, while deferred contracts are modestly lower. Grass areas in the heart of the Kansas grazing country are in need of a good drink of water from Mother Nature and we appear to be at least a week away from that opportunity.



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