Bret Crotts  |   August 22, 2011

Corn                                    Estimated Fund Position
Trends
Short Term: Up                 Net Long Futures and Options: 221787
Long Term: Up                  Change: +10000
Overnight Trade: U +9 Z +8 3/4
Opening Calls: 7-12 Higher

The December corn made new contract highs overnight due in part to less fears in the financial markets and production concerns. The corn market is overbought, but can stay that way for a long time. The corn has been trading in a sideways/higher pattern for a couple of months and there is no indication that will change now. Look for steady to lower crop condition ratings this afternoon. Buy breaks.

Wheat                              Estimated Fund Position
Trends
Short Term: Up             Net Long Futures and Options: -43621
Long Term: Up             Change: +3000
Overnight Trade: Chicago: U +12 KC: U +10
Opening Calls: 10-15 Higher

The September KW didn’t take out last week’s higher overnight, but the September Chicago wheat did and the September Minneapolis wheat continues to scream higher. Production problems in the spring wheat country and strength in the corn are very supportive today. Some good demand news would send the Kansas City wheat shooting higher, but for now we have to be content with supply concerns and tagging along with the corn.

Soybeans                    Estimated Fund Position
Trends
Short Term: Up          Net Long Futures and Options: 48781
Long Term: Up          Change: +3000
Overnight Trade: U +14 X +13 3/4
Opening Calls: 15-20 Higher

The November soybeans took another step toward reaching the top of the trading range overnight. Like the corn, production concerns and less fear in the financial markets are supportive, plus the technical aspects of the market still suggest that the November beans will move to $14.00 soon. Plan on steady to lower crop condition ratings this afternoon and choppy/higher trade this week.

Live Cattle
Trend
Short Term: Up
Long Term: Up
Opening Calls: 10-30 Lower

Live cattle futures closed modestly higher on Friday, but were off 4.80 for the week in the October contract. Friday’s on feed report showed a larger than expected placement number of more than 1.9 million head. The high placements could weigh on the Dec and Feb contracts in early trade. The fact that most of the increase was in cattle under 700 pounds, is expected to lighten the negative effect on the market. The higher than expected marketings should support the front end of the market.

Feeder Cattle
Trends
Short Term: Up
Long Term: Up
Opening Call: 20-40 Lower

Feeder cattle futures were off 3.70 for the week in the September contract. The high placement number in Friday’s report could allow for additional selling in early week trade. More importantly, the new contract highs in December corn overnight could pressure feeders. Seasonal and technical indicators remain negative to this market. Equities are firmer to start the week, which could provide underlying support.