Corn                                             Estimated Fund Position
Short Term: Down
Long Term: Down                         Net Long Futures and Options: -42106
Overnight Trade: Z +1                  Change: +3000
Opening Calls: 1-3 Higher

The corn market is drifting slightly higher as we move into tomorrow’s supply and demand report. I don’t expect to see much more strength with the prospects for a record yield number in tomorrow’s report, but a move up to the $3.15 area in the December contract is not out of the question. Consider buying October put options today to protect against bearish numbers tomorrow.

Wheat                                            Estimated Fund Position
Short Term: Down                         Net Long Futures and Options: -79927
Long Term: Down                         Change: -1000
Overnight Trade: Chicago: Z +1/2 KC: Z +1/4
Opening Calls: 1-2 Higher

Wheat made another new low for the move overnight, but posted a small recovery by the end of the session. The wheat is very oversold and due for some kind of corrective action, but we will look at any strength as a selling opportunity. Long term a move below the $4.50 level in the December KW is likely.

Soybeans                                      Estimated Fund Position
Short Term: Down                        Net Long Futures and Options: 17186
Long Term: Down                        Change: -3000
Overnight Trade: X -1 1/2
Opening Calls: 1-5 Lower

It is shaping up to be another sideways day for the soybean market. We are still seeing good demand, but the prospects of a good harvest are holding the market back. In the short run strength is a selling opportunity, but once we get past harvest the soybeans have a great shot at a large rally.

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

Live cattle futures continued to work higher on Wednesday, led by higher choice cuts and improving cash prospects. Hide and offal values continue to strengthen, indicating better foreign demand for those products. Cash trade could get started today, but if it is to happen a large gap between bids and asking prices will need to narrow. Overnight trade was narrowly mixed, as are outside market influences. Some two sided trade ahead of cash is the likely scenario.

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

Feeder cattle exploded to their best close in nearly three weeks. Technical buying along with support from higher live cattle futures and struggling corn prices supported feeders. Even with cash index levels rising again on Wednesday, futures are now carrying a 1.25-1.75 premium to the cash index. Any bounce in corn price or weakness in the live cattle pit will lead to a short term correction in the feeders. Overnight prices were narrowly mixed and corn values were modestly higher.