Corn                                       Estimated Fund Position
Short Term: Up
Long Term: Down                Net Long Futures and Options: -23163
Overnight Trade: Z +4 3/4   Change: +2000
Opening Calls: 2-4 Higher

Cooler extended forecasts supported the corn overnight. The reason that potential frost damage even matters is because crop development is still so far behind normal. For example, only 6% of the Illinois corn is mature compared with 50% on average. Weather scares like this tend to be selling opportunities, but the problem, of course, is we don’t know how far the corn will jump. Right now the $3.30 area looks like an excellent selling opportunity in the December corn.

Wheat                                     Estimated Fund Position
Short Term: Down                   Net Long Futures and Options: -69122
Long Term: Down                   Change: -3000
Overnight Trade: Chicago: Z +2 3/4 KC: Z +3
Opening Calls: 2-4 Higher

The December KW made a new low for the move overnight before making a bounce back. It looks like traders are back to using the wheat as the short leg of spreads. Look for more of that today if an early frost is going to be a concern. Trend indicators are still down and the next downside objective for the December KW is the $4.40 area.

Soybeans                                  Estimated Fund Position
Short Term: Down                    Net Long Futures and Options: 4324
Long Term: Down                    Change: +1000
Overnight Trade: X +3
Opening Calls: 3-5 Higher

The November soybeans came back to close higher yesterday and had follow through strength overnight. Demand is still excellent and has been a supporting factor all along. Now, however, frost is a concern and the late crop is susceptible to yield loss. A small yield loss could have a very large impact on ending stocks, particularly if demand stays strong. Weather scares usually end up being selling opportunities, so any move back to the $9.50 area, should be viewed as such.

Live Cattle
Short Term: Down
Long Term: Down
Seasonal: Up
Opening Calls: Mixed

Live cattle futures finished lower on Monday, with deferred contracts seeing the most pressure at days end. Cutout values were higher on continued better movement. Show lists are larger in the south, with the effects of cattle being shipped from the north limiting buying interest in Kansas and Texas last week. Overnight activity is mixed, with strength in the lead October contract and weakness in the deferred. Technical support held in the front month, while other contracts took out last week’s lows.

Feeder Cattle
Short Term: Down
Long Term: Down
Seasonal: Down
Opening Call: Mixed

Feeder cattle started the week under some selling pressure, with futures falling in spite of modest losses in the corn market. The cash index did rebound from Friday’s decline, gaining .53 to 98.91. Overnight futures show some very modest selling and corn values were 4-5 cents stronger. Look for feeder futures to struggle unless the fat market can show some recovery in the deferred months. Any sustained corn strength will add to the pressure on feeders near term.