Corn                                            Estimated Fund Position
Short Term: Up
Long Term: Up                            Net Long Futures and Options: 16132
Overnight Trade: Z -3                  Change: -4000
Opening Calls: 2-4 Lower

The corn market has not made a new high for the move since Tuesday and it doesn’t look likely that is will happen today. Failure to move higher today will cause recent buyers to exit positions. There is concern about frost for this weekend, but private corn production estimates are coming in higher, which seems to be a bigger concern right now. Also concerning traders is the fear of a repeat of yesterday’s weak stock market, strong Dollar performance, which was a huge factor in yesterday’s grain trade.

Wheat                                          Estimated Fund Position
Short Term: Down                       Net Long Futures and Options: -63461
Long Term: Down                       Change: -2000
Overnight Trade: Chicago: Z -5 KC: Z -2 3/4
Opening Calls: 3-5 Lower

The December KW didn’t fall to a new low yesterday or overnight, but it is bound to happen very soon. If the corn is weaker through the day there is a chance the wheat could benefit from the spread trade, but that will only provide temporary support. Fundamentals are still very negative and with no support from the corn or the outside markets, the outlook is bleak for the wheat.

Soybeans                                      Estimated Fund Position
Short Term: Down                        Net Long Futures and Options: -3846
Long Term: Down                        Change: -3000
Overnight Trade: X -8
Opening Calls: 5-10 Lower

Overnight the November soybeans fell to trend line support and the lower end of the trading range. Demand is excellent, but harvest activity is expanding and some private estimates of crop production are still growing, which makes it very difficult to hold gains no matter how good demand is. Outside market influences are negative, which won’t help matters either. There is a very good chance that we see the trend line support fail today and the November beans move to $9.00 or less.

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

Live cattle futures imploded on Thursday, with losses of near1.50 mirroring the losses in the cash cattle market for the week. Sharply lower cutouts, $83 cash trade and the infusion of another dairy buy out quickly derailed Wednesday’s key reversal higher. Open interest dropped over 3,000 contracts in the live cattle pit, as many bulls threw in the towel. Overnight activity was mostly steady to slightly lower, with traders tentative ahead of the open outcry session and the weekend.

Feeder Cattle
Short Term: Down
Long Term: Down
Seasonal: Up
Opening Call: 10-30 Lower

Feeder cattle futures gave back all of the previous days gains on Thursday and then some, with new lows for the move being scored in most contracts. The cash index is now a pretty good premium to the futures market, but we expect to see additional weakness in the cash arena after yesterday’s action. Overnight prices continued to weaken, in spite of further sell off in the corn pit. If corn can extend that weakness, feeders could see a late round of short covering. Both cattle pits are expected to keep one eye on the equity market trade as well, with stocks showing signs of an extended move lower.