Corn                                          Estimated Fund Position
Short Term: Up
Long Term: Up                           Net Long Futures and Options: 77478
Overnight Trade: Z +3 1/4           Change: +2000
Opening Calls: 1-3 Higher

The December corn nearly reached the 50% retracement of the last leg down during yesterday’s action. The corn was higher overnight, but didn’t quite take out yesterday’s high. A close above yesterday’s high of $3.86 ¾ would be a good indication that the December corn is headed to the $4.04 level. Outside markets are very supportive this morning with the Dollar Index falling to a new low for the move. US harvest progress was only 13%.

Wheat                                            Estimated Fund Position
Short Term: Up                              Net Long Futures and Options: -46191
Long Term: Up                              Change: +6000
Overnight Trade: Chicago: Z +4 KC: Z +3 1/2
Opening Calls: 2-4 Higher

Short covering and some new buying by fund traders fueled yesterday’s strong rally in the wheat. The wheat is overbought, but it looks like the December KW has a chance to move up to the $5.50 area this week. Our large ending stocks are still a big concern, but for the moment money is moving into the wheat and into commodities in general.

Soybeans                                           Estimated Fund Position
Short Term: Up                                  Net Long Futures and Options: 17332
Long Term: Up                                  Change: -3000
Overnight Trade: X +3 3/4
Opening Calls: 3-5 Higher

The soybeans closed lower yesterday and look like they are in for a day of consolidation trade today. The market is very overbought and some corrective activity should be expected. Demand is good and harvest activity is slow, which is a bullish combination right now, but the fact that the market moved over a dollar in a very short period of time means things are overdone for the moment.

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

Live cattle futures closed lower in all but the lead October contract, in direct contrast with recent action. The strength in the October came in spite of continued heavy deliveries. Support stems from Friday’s cash improvement and sharply higher cutout values. The rise in cutouts seems to have come at the expense of movement so far. Overnight trade saw a continuation of the bull spreading, with Oct up around .50 and deferred contract higher but tapering well off of those levels. Cash interest is expected to slowly take shape today or tomorrow, with asking prices $84+ in the south and near $130 in the north.

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

Feeder cattle futures saw triple digit losses in several of the front month contracts on Tuesday, with the market following a sharp drop in the cash index on Monday. Overnight activity has been narrowly mixed, even though the corn market reversed early weakness to close better than three cents higher for the session. Strength in the live cattle and equity markets seem to be holding the feeders from falling significantly lower. New positioning may be limited ahead of Friday’s on feed report.