Corn                                                 Estimated Fund Position
Short Term: Up
Long Term: Up                                 Net Long Futures and Options: 79478
Overnight Trade: Z -9 1/2                  Change: +5000
Opening Calls: 8-10 Lower

The December corn basically stalled out at the 50% retracement of the last leg down and failed to hold gains yesterday, which is pretty negative for an overbought market. The corn is now in the process of relieving that overbought condition and is working its way lower. Outside markets are flat, so there is no support there and forecasts suggest harvest activity will be increasing, which will result in more farmer selling. Plan on a correction in the December corn back to at least the $3.67 - $3.70 area and probably to the $3.40 - $3.45 area.

Wheat                                               Estimated Fund Position
Short Term: Up                                  Net Long Futures and Options: -42191
Long Term: Up                                  Change: +4000
Overnight Trade: Chicago: Z -7 1/2 KC: Z -4 3/4
Opening Calls: 5-10 Lower

The wheat is holding on rather well considering how poor the fundamental outlook is. Like the corn, the wheat failed to hold gains yesterday, which makes the charts look susceptible to a turnaround. The market is very overbought and yesterday’s action is a very good sign that we are going to get one. Look for the December KW to pull back to the $5.00 level over the next few days.

Soybeans                                             Estimated Fund Position
Short Term: Up                                    Net Long Futures and Options: 20332
Long Term: Up                                    Change: +3000
Overnight Trade: X -20 3/4
Opening Calls: 15-25 Lower

Like the corn and wheat, the soybeans are overbought and due for a correction. Overnight the market was weak, so our correction is underway. The November soybeans are going to pull back to at least $9.60 in the short run. A move to $9.45 is likely at some point. Demand is still excellent, so there will be buying interest on breaks, but profit taking is the order of the day.

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

Live cattle futures recovered all of Tuesday’s losses and then some, closing above a 2 ½ month down trend line in the December contract. Cash trade is beginning to look more promising, with northern packers bidding as high as $126 Wednesday afternoon. Asking prices remain firm, near $130 heading into the end of the week. Cutouts saw good gains once again, with movement remain somewhat subdued. Overnight trade was higher throughout most of the night, but softened early this morning along with equity markets. On feed report estimates show placements of 105.5%, marketings of 97.8% and total on feed numbers of 100.3%.

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

Feeder cattle futures took advantage of the strength in the live pit and sideways trade in the corn market to post gains of as much as 1.03 basis the November contract. The recovery could be extended today if corn futures see the day session trade as weak as overnight. Corn was down .10 in overnight trade, with weather appearing more conducive to harvest over the next week. Cash levels appear to be strengthening in the feeder market as well, with one day averages 2.00-3.00 higher than the seven day average posted on Tuesday.