Schwieterman: Live cattle futures imploded on Friday

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Corn                            Estimated Fund Position

Trends – July Contract

Short Term: Up           Net Long Futures and Options: 184706

Long Term: Up           Change: +2000

Overnight Trade: N -2 @7:30 AM

The corn market is still in consolidation mode. With the supply and demand report out on Wednesday traders aren’t in any hurry to push the market in either direction. Once we get the report out of the way, traders will focus on the weather in the Corn Belt, which at the moment is too wet and cold to be conducive to planting. Indications of warmer weather will put pressure on the new crop corn. Look for two sided trade today.

Wheat                          Estimated Fund Position

Trends – July Contract

Short Term: Down Net Long Futures and Options: -2526

Long Term:Up Change: -3000

Overnight Trade: Chicago: N +5 KC: N +6 @7:30 AM

Rain over the weekend was a disappointment in the HRW Belt. The extended forecasts usually seem to hold moisture, but the moisture seems to disappear as the time frame shortens. Don’t plan on much moisture this week, but at least we will have warm temperatures to go with the lack of rain. The wheat did post gains overnight, but until the July KW pushes above $7.50, it really doesn’t matter.

Soybeans                     Estimated Fund Position

Trends – July Contract

Short Term: Up           Net Long Futures and Options: 148169

Long Term:Up                        Change: -2000

Overnight Trade: N +3 @7:30 AM

The soybeans were higher overnight, but so far we don’t have a new high for the move. The overnight session started lower on news that Brazilian beans would land in the US this week, but since that was inevitable, and the only way to make the balance sheets work out, the first beans hitting our shores really isn’t market moving news. We need more imports to avoid shortages this year. $15.00 is still a viable upside objective for the July soybeans.

Live Cattle

Trend

Short Term: Up

Long Term: Up

Opening Calls: Mixed

Live cattle futures imploded on Friday, losing more than 2.00 in all contracts through the end of the year. Weakness in the cash market followed, with southern trade at $148 and the north $242 or lower in the beef. Cutouts were sharply lower for the week, with the only positive being the widening of the choice/select spread. Option expiration went out with a bang, and fireworks could still be on tap, with first notice day for deliveries following todays’ close. Open interest in the spot month remains very high for this late in the contract.

Feeder Cattle

Trends

Short Term: Up

Long Term: Up

Opening Call: Mixed

Feeder cattle futures closed with triple digit losses on Friday, mostly due to spillover weakness from the live cattle and lean hog pits. The cash index was up on Friday, but off .46 for the week. Today’s index will be interesting, with a very low figure from last weekend coming off today and this past Fri-Sat sales being added. Overnight corn prices are modestly lower but remain in an uptrend, with potentially friendly numbers ahead in Wednesday’s supply/demand report.



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