Schwieterman: Weather remains a negative factor for feeder cattle

Corn                                      Estimated Fund Position
Trends
Short Term: Up                     Net Long Futures and Options: 87887
Long Term: Up                      Change: +16000
Overnight Trade: N +10 Z +11 @7:30 AM
Opening Calls: 10-25 Higher

Export sales were poor again at 192,900 MT of old crop and 99,900 MT of new crop sales. Fortunately traders are looking at the weather and not export sales. The December contract traded above, but  did not close above the $6.50 level yesterday. Plan on a test of yesterday’s high at some point today and further gains as long as the crop is still deteriorating.

Wheat                                    Estimated Fund Position
Trends
Short Term: Up                      Net Long Futures and Options: -34713
Long Term:Up                        Change: +3000
Overnight Trade: Chicago: N -2 KC: N -4 @7:30 AM
Opening Calls: Steady - Lower

Wheat export sales weren’t good at 324,500 MT. The numbers have to be better than that for the wheat to show any independent strength. On the chart the July contract is still struggling with the $7.40 - $7.50 resistance and I look for more of the same today. Spread trade will keep the wheat in check until we see consistently large export sales.

Soybeans                                Estimated Fund Position
Trends
Short Term: Up                       Net Long Futures and Options: 184294
Long Term:Up                         Change: -2000
Overnight Trade: N +6 X +5 @7:30 AM
Opening Calls: 5-10 Higher

The soybeans have made two poor closes in a row following Monday’s surge higher. Export sales were solid at 403,900 MT of old crop and 389,000 MT of new crop sales. The market will need to slow demand more than this if we don’t see heavy rain in the Corn Belt soon. I look for another day of consolidation as both buyers and sellers will be nervous about tomorrow’s stocks and acreage numbers.

Live Cattle
Trend
Short Term: Down
Long Term: Down
Opening Calls: 20-40 Higher

Live cattle futures closed sharply higher on Wednesday, reversing early weakness and scoring solid technical support on the rally. Boxed beef prices remain strong, with all-time highs for choice within reach. Overnight saw follow up buying in the fats, in spite of the weaker equities and slightly firmer Dollar. Weekly export sales on beef were impressive at 18,400 mt. We believe that the seasonal low is being carved out.

Feeder Cattle
Trends
Short Term: Down
Long Term: Down
Opening Call: 20-30 Lower

Feeder cattle futures scored a sharp reversal on Wednesday, trading more than 4.00 off of lows for the move posted in the morning. Feeders dropped some of their gains in the closing hour and again overnight, but support appears to be present as fats push higher. Corn prices are modestly higher in early morning activity, with weather remaining a negative factor for feeders.

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