Schwieterman: Live cattle futures reach contract highs, end lower

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Corn                                            Estimated Fund Position
Trends
Short Term:Down                   Net Long Futures and Options: 131852
Long Term: Down                   Change: -5000
Overnight Trade: H Unch @7:30 AM


Support is still holding at the bottom of the trading range. Other than that, there is very little news in the corn market. Trade volume is low and it seems that traders are biding their time waiting for the Holidays to pass and for the January supply and demand report to be released. Ethanol production data will be released today, which could provide the market with some direction depending on the size of the grind. Unleaded gasoline demand is still poor, so a surge in ethanol production is not likely at this time.

Wheat                                       Estimated Fund Position
Trends
Short Term: Down                  Net Long Futures and Options: -48922
Long Term: Down                   Change: +1000
Overnight Trade: Chicago: H +8 KC: H +6 @7:30 AM


The wheat market saw some short covering yesterday and again overnight. Once again it seems that traders are worrying/hoping that export demand is improving. We have had one week of good export sales and it will take several consecutive weeks to really convince the bears that demand is improving. Meanwhile traders will continue to monitor the weather to gauge the precipitation potential over the next two weeks. On the charts it will take a close over $8.68 in the March KW to generate more short covering.

Soybeans                                     Estimated Fund Position
Trends
Short Term: Up                           Net Long Futures and Options: 97013
Long Term: Down                      Change: -7000
Overnight Trade: H +3 @7:30 AM


The soybeans took a big hit following yesterday’s announcement of cancellations by the Chinese and unknown destinations. All the talk had been about big sales to the Chinese so the cancellations were a surprise. This correction will take the March contract back to at least $14.45 and possibly to $14.10, at which point the Chinese will probably be buying back their cancellations and then some. Breaks are a buying opportunity.

Live Cattle
Trend
Short Term: Up
Long Term: Up
Opening Calls: 10-20 Higher


Live cattle futures reversed early strength to close moderately to sharply lower on Tuesday. The selloff followed the posting of new contract highs in the morning trade. Mondays’ lows held on Tuesday and again in overnight trade, with the market modestly higher in the front 6 months. Cash bids and asking prices are a full $5.00 apart in the south. There were 100 fresh deliveries posted against the December contract, with dates remaining partially through the 7th of December. Snow is expected in the northern third of the feeding region over the next 24 hours.

Feeder Cattle
Trends
Short Term: Up
Long Term: Up
Opening Call: 10-20 Higher


Feeder cattle futures finally posted a negative close after nine days and 10.00 in gains. The reversal on Tuesday saw the January contract trade 2.70 off of session highs and close 2.05 lower for the day. The reversal come as much on new selling as profit taking, with open interest rising 112 contracts for the day. Overnight corn prices are flat, with feeders gaining .20-.30 in the front months. Fridays placements are expected to be down 9% for the month of November, providing support on any additional weakness.



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