Schwieterman: The wait is almost over, USDA report at midday

Corn                                               Estimated Fund Position
Trends
Short Term: Up                           Net Long Futures and Options: 58485
Long Term: Down                      Change: +5000
Overnight Trade: H Unch @7:30 AM

The waiting is almost over. Soon we will see what it is like to have a whole slew of reports released in the middle of the trading day. The mid-day release may help avoid a limit move, but one should still plan on a great deal of volatility. On the charts, short term technical indicators are starting to give buy signals, which would be encouraging if it weren’t for the reports coming out today. Look for choppy trade ahead of the report.

Wheat                                           Estimated Fund Position
Trends
Short Term: Down                      Net Long Futures and Options: -83295
Long Term: Down                       Change: -1000
Overnight Trade: Chicago: H +1 KC: H +1 @7:30 AM

The March KW made another new low for the move yesterday and again overnight. The market  keeps following a channel downward and if there isn’t any change in the fundamental news today then expect to see the same pattern hold. Like the corn, look for choppy trade ahead of the report.

Soybeans                                        Estimated Fund Position
Trends
Short Term: Down                         Net Long Futures and Options: 45525
Long Term: Down                          Change: -4000
Overnight Trade: H -10 @7:30 AM

The March soybeans retested the recent lows overnight, which gives the impression that this market is ready to free fall at any sign of a bearish report. The market is oversold, but that, of course, is meaningless on a report day. Demand is strong, but there is a big fear of higher production and higher ending stocks in today’s report. Stay tuned.

Live Cattle
Trend
Short Term: Down
Long Term: Down
Opening Calls: 20-30 Lower

Live cattle closed steady to modestly lower on Thursday, with some light cash trade surfacing steady to $2.00 lower than week ago tops. The sprinkling of lower cash will likely bring in aggressive sellers if bids rise near steady with week ago levels. The key grain reports due out at 11:00 am central time will be a market mover for the livestock if any major surprises are released. Technical selling remains a feature in this week’s trade.

Feeder Cattle
Trends
Short Term: Down
Long Term: Up
Opening Call: 30-50 Lower

Feeder cattle futures remained under pressure on Thursday, with moderate losses posted across the board. Continued selling in overnight trade has the January contract approaching current cash index levels. Key timing today will be the grain report at 11:00 am. Any big move in the corn market will trigger an opposite reaction out of the feeders. A friendly corn report seems to be expected by the cattle industry. We’ll know in a few hours. Use options for pre-report positioning.

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6. Corn and soybean prices continue to retrace 2012 drought rally

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