Corn                                           Estimated Fund Position
Short Term: Down
Long Term: Down                    Net Long Futures and Options: -30801
Overnight Trade: Z -3 3/4       Change: -1000
Opening Calls: 3-5 Lower

The corn was strong yesterday due to the weak Dollar and slow crop development. It has also been more than 10 trading days since the corn fell to a new low, which can cause short traders to give up on positions. The corn did give up about half of yesterday’s gains at one point overnight, but with the Dollar looking very weak, one should be cautious with fresh short positions. Look for two sided trade today. Another strong positive close will have technical traders thinking the lows are in for the year.

Wheat                                       Estimated Fund Position
Short Term: Down                     Net Long Futures and Options: -70939
Long Term: Down                      Change: -1000
Overnight Trade: Chicago: Z -1 1/4 KC: Z -1
Opening Calls: 1-2 Lower

The wheat ended up being slightly lower yesterday and again overnight. The trade is pretty quite. There isn’t much wheat specific news and the market is basically a follower or it gets pushed around by spread trade. Yesterday it looked like the wheat was back to being the short leg of spreads. I still think we have more weakness ahead in the wheat, but it is slow going right now.

Soybeans                                      Estimated Fund Position
Short Term: Up                             Net Long Futures and Options: 10899
Long Term: Down                         Change: +3000
Overnight Trade: X -11 3/4
Opening Calls: 10-12 Lower

The beans were firm yesterday, but overnight weakness has taken back all the gains. Technical indicators are giving sell signals and the advancing harvest is killing the basis. A weather threat would change everything, but forecasts don’t look supportive this morning. The November beans are on course to move below $9.00 soon.

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

Live cattle futures are expected to open narrowly mixed this morning, as traders continue to posture ahead of this weeks’ cash trade. Slower chain speed this week should support beef prices. Are the chains slowing because of lack of inventory or from lack of demand? We think, a little of both. Until demand increases, even projected tight fourth quarter marketings may struggle to lift cash prices significantly. Open interest dropped on the recovery Tuesday, showing no signs of quality buying in the market.

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

Feeder cattle futures picked an interesting day to start a recovery effort. Live cattle futures were mixed on the close and corn put in its’ best rally effort in a week. Oversold conditions sometimes just need relief. Overnight corn values were lower, which may give the feeders a chance to extend their recovery effort. Cash index levels dropped .66 to 97.27, closing the gap with the futures market significantly. We expect choppy two sided trade today. Producers should use any rally efforts to protect inventory until some technical buy signal can be uncovered.