Schwieterman: Live cattle futures closed higher

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Corn                            Estimated Fund Position

Trends – July Contract

Short Term: Up           Net Long Futures and Options: 185161

Long Term: Up           Change: +6000

Overnight Trade: N -3 @7:30 AM

The corn was weaker overnight and was close to giving up all of yesterday’s gains. The corn market seems to be comfortable trading at the current level as we wait for the next export sales report and the next round of forecasts. The corn is 3 percent planted, which is behind average, but traders aren’t too concerned at the moment. The extended forecasts suggest there will be opportunities to plant and that is all we need. The overbought condition of the market is being relieved by going sideways, which would set the old crop up for another move higher if we continue to see good export numbers.

Wheat                          Estimated Fund Position

Trends – July Contract

Short Term: Down       Net Long Futures and Options: -3844

Long Term:Up                        Change: +7000

Overnight Trade: Chicago: N -1 KC: N -3 @7:30 AM

Crop condition ratings fell and it froze again, but the wheat didn’t see any follow through buying. Freeze rallies don’t seem to last long in the wheat, so that isn’t much of a surprise. However, the fact that winter wheat ratings keep dropping, should be supportive. The US is now at 34 percent Good to Excellent and Kansas is at 26 percent. Texas and Oklahoma don’t have much good or excellent wheat left, but the poor and very poor categories keep on growing. The forecasts are getting drier again and one should expect to see lower condition ratings again on Monday. The wheat market will get very exciting sometime if we see our national average yield drop from last year’s record level to the 5-year average.

Soybeans                     Estimated Fund Position

Trends – July Contract

Short Term: Up           Net Long Futures and Options: 138509

Long Term:Up                        Change: +5000

Overnight Trade: N +7 @7:30 AM

The soybeans were higher overnight. It is interesting how once the market found a little technical support all the talk shifted back to our tight supplies. Look for a retest of the recent highs and perhaps for the July contract to get closer to $15.00, and then look for the talk to shift back to cancellations/defaults/imports from S. America. The market has been operating like this for a long time and it will continue to do so until we get the old crop supply situation solved.

Live Cattle

Trend

Short Term: Down

Long Term: Up

Opening Calls: 10-30 Lower

Live cattle futures closed mostly higher on Monday, with most of the gains in the lead April contract. Showlists appear to be smaller than a week ago in most areas. Local producers have reported sending cattle to Iowa and Greeley Colorado the past two weeks, which may explain the basis difference between the north and south regions. We are trading softer in overnight trade, with some modest bull spreading a feature. Early asking prices appear to be near $150 in the south and $242 in the northern beef market.

Feeder Cattle

Trends

Short Term: Up

Long Term: Up

Opening Call: 20-40 Lower

Feeder cattle futures closed moderately higher on Monday, getting a modest boost from the live pit, while higher corn prices kept a lid on gains. A further boost came from a 2.09 rise in the cash index, setting a new record high of 180.39. Overnight corn prices are off 2-3 cents but feeders seem inclined to follow the deferred live market lower.


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