Corn                                                Estimated Fund Position
Trends
Short Term: Up
Long Term: Up                             Net Long Futures and Options: 16132
Overnight Trade: Z -2 3/4           Change: +3000
Opening Calls: Steady - 2 Higher


The Quarterly Stocks figure came in at the low end of expectations at 1.674 billion bushels. The report isn’t friendly enough to be a real market mover, but at least it wasn’t a negative surprise. Yesterday the December corn ran into resistance at the $3.47 area, backed off from there, and posted further weakness overnight. The stocks report may be supportive as we start the day, but yesterday’s failure to hold gains is a good indication that we may see the corn pull back to the 50-day moving average, which is near $3.30.

Wheat                                          Estimated Fund Position
Trends
Short Term: Up                           Net Long Futures and Options: -63461
Long Term: Down                      Change: -3000
Overnight Trade: Chicago: Z +1 1/2 KC: Z -1
Opening Calls: 2-3 Lower


This morning’s wheat numbers were somewhat negative. All wheat production was higher than expected at 2.220 billion and the Quarterly Stocks were much higher than expected at 2.215 billion. It is going to be awfully difficult for the wheat to post gains with the fundamental outlook getting worse. The wheat really needs to see better demand in order to mount a turn around. Plan on weakness today.

Soybeans                                     Estimated Fund Position
Trends
Short Term: Down                       Net Long Futures and Options: -3846
Long Term: Down                       Change: -1000
Overnight Trade: X +3 1/4
Opening Calls: 2-3 Lower


The soybean numbers were by far the most interesting. USDA revised 2008 production higher to 2.967 billion and the Quarterly Stocks came in above the highest trade guess at 138 million. It will be very interesting to see what changes are made in the October supply and demand report to explain it all. One has to view today’s numbers as slightly negative because the higher stocks number will have a sizeable impact on new crop ending stocks as well. Look for the November beans to quickly move down to the $9.00 area.

Live Cattle
Trend
Short Term: Down
Long Term: Down
Seasonal: Up
Opening Calls: 10-20 Lower


Live cattle futures closed lower on Tuesday and are expected to open steady to lower again today. Long term support levels continue to hold thru the April contract, while June and beyond put in new contract lows. Beef cutouts were higher on Tuesday, with reported movement remaining dismal. Option expiration and first notice day for delivery on the October contract take place on Friday and Monday respectively.

Feeder Cattle
Trends
Short Term: Down
Long Term: Down
Seasonal: Up
Opening Call: 10-20 Lower


Feeder cattle futures continued their recent slide on Tuesday, pressured once again by a combination of higher corn prices and lower live cattle futures. This morning’s quarterly grain stocks report appears to be somewhat friendly the corn market. Any additional strength in the corn market could lead to a test of the 95.00 level basis the Oct and Nov feeders. The cash index was slightly lower on the day, but did show some improvement on the single day average Tuesday.