Schwieterman: Live, feeder cattle futures move higher

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Corn                                 Estimated Fund Position
Trends – December Contract
Short Term:Down         Net Long Futures and Options: -170921
Long Term: Down         Change: +3000
Overnight Trade: Z -1 @7:30 AM


The December corn made a rally attempt yesterday and again overnight which, so far, has amounted to yet another failure at trend line resistance. Now that we have this little bounce out of the way we will probably see another run at the August low. The market will continue to drift sideways/lower until we get to the September stocks report next Monday.

Wheat                               Estimated Fund Position
Trends – December Contract
Short Term: Up                Net Long Futures and Options: -83420
Long Term: Down           Change: +2000
Overnight Trade: Chicago: Z -2 KC: Z -2 @7:30 AM


It should come as no surprise that the wheat market is still trading sideways. I get a little more excited about the bullish potential of the wheat market every day, but there is just no point is trying to pick a bottom in this market when it doesn’t want to go anywhere. The best bullish strategy right now is to sell put options. That gives you some cushion if the corn falls apart and drags the wheat lower. Otherwise I want to see a close above the 50-day moving average before I am a buyer.
 
Soybeans Estimated Fund Position
Trends – November Contract
Short Term: Down Net Long Futures and Options: 998691
Long Term:Up Change: -3500
Overnight Trade: X +10 @7:30 AM


The November soybeans were strong overnight, but I still suspect we will see a move below $13.00 this week. It is easy to make a bullish case for this market, but there haven’t been enough technical objectives achieved and there is definitely some concern about yields being better than expected. A break to $12.85 would be a great place to try a long position.

Live Cattle
Trend
Short Term: Up
Long Term: Up
Opening Calls: 10-30 Higher


Live cattle futures closed moderately higher across the board on Monday, with higher cutouts and Friday’s friendly on feed report fueling the rise. Overnight activity saw some follow through buying, trading 10-30 higher as we write. Open interest gained 2,214 contracts on Monday, suggesting new buying interest coming into the market. The .025 gap left in the October chart Monday morning could fuel more technical buying near term.

Feeder Cattle
Trends
Short Term: Up
Long Term: Up
Opening Call: 10-30 Higher


Feeder cattle futures closed sharply higher on Monday, fueled by the lower than expected placements in August and rising cash index levels. The auction in Oklahoma City on Monday was called higher to sharply higher, depending on the category. The vertical move higher in the October feeders over the past five days has created overbought conditions, which may allow for a correction if corn can show some strength. We are looking at late first quarter and early second quarter of 2004 as pricing opportunities for producers near these levels.



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