Schwieterman: Feeders see big losses but recovery expected

Corn                                            Estimated Fund Position
Trends
Short Term: Down                   Net Long Futures and Options:
Long Term: Down                    Change:
Overnight Trade: N +2 Z +1 1/2
Opening Calls: 1-2 Higher

Planting progress was below expectations at 28%. This is still the 3rd highest in recent history, but well below 2010, which was at 50%. The corn posted solid gains yesterday and had follow through buying overnight. The next major test for the July contract will be the $6.19 area. A close above that level and some more bull spreading would give traders much more confidence.

Wheat                                           Estimated Fund Position
Trends
Short Term: Down                       Net Long Futures and Options:
Long Term: Down                        Change:
Overnight Trade: Chicago: N +5 1/2 KC: N +4 1/4
Opening Calls: 3-5 Higher

The July KW has seen a good short covering bounce, but so far has not been able to break out of the recent trading range. The wheat will have to see more strength in the corn in order to push higher from here. US wheat is rated at 63% Good to Excellent, which is down slightly from last week. The crop is very advanced for this time of year with 45% of the Kansas wheat crop headed compared with 2% on average.

Soybeans                                        Estimated Fund Position
Trends
Short Term: Up                              Net Long Futures and Options:
Long Term: Up                               Change:
Overnight Trade: N +11 1/4 X +10
Opening Calls: 10-15 Higher

The soybeans got back yesterday’s losses in overnight trade and should make a run at new highs today. We are getting a steady stream of fresh export sales, which will keep a bid under the market and is keep the bull spreads working. Fundamentals are still getting more bullish. Buy breaks.

Live Cattle
Trend
Short Term: Down
Long Term: Down
Opening Calls: 30-50 Higher

Live cattle futures sold off sharply Monday morning, before a late round of buying closed the market back above key support levels taken out earlier in the day. Overall show lists remain very manageable, with Texas looking particularly tight. We believe that the decrease in index fund longs to near 30,000 creates room for those same buyers to return to the market following the Spring break in the fats. Cutouts ended higher on Monday and macro indicators point higher on the day.

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

Feeder cattle futures closed Monday posting triple digit losses, with pressure stemming from sharp gains in corn futures and a larger than expected March placement number. Overnight activity is getting a little boost from the live cattle, while corn remains on the firm side. Strength in deferred live cattle futures is key to buyers returning to the feeder pit. Some recovery today seems likely.

1. Another droughty summer forecast for West Texas
2. Do opponents of crop insurance oppose farm programs in general?
3. Ag markets generally mixed again Tuesday morning
4. UK first in EU to get Merck's new Schmallenberg vaccine
5. Will this summer be a repeat of 2012?
6. 4 rules for growing a business or industry

1. Michigan hay buyers should plan purchases early
2. New animal identification rules aid disease traceability
3. Corn planting pace turns from record slow to record fast
4. U.S. cattle placements rise in April as feed costs subside
5. Survey reveals most Americans in favor of COOL
6. Ag markets were mixed to start the new week

1. Meat and climate change: How significant is the impact?
2. BeefTalk: How do we get the next generation to raise beef?
3. 2014 Farm Bill: Are we near an agreement?
4. Farm bill and immigration reform action needed
5. Boxed beef hits record highs, cattle weak to lower
6. Survey reveals most Americans in favor of COOL