Bret Crotts   |   Updated: February 24, 2012

Corn                                              Estimated Fund Position
Trends
Short Term: Down                    Net Long Futures and Options: 146067
Long Term: Up                           Change: +4000
Overnight Trade: H -3 1/4 Z -4 1/4
Opening Calls: 3-5 Lower

The corn was choppy and directionless yesterday and I expect more of the same today. At some point today I still expect to see a test of the $6.50 area in the March contract. Export sales were good at 840,800 MT and next week’s report will be good as well, so there is a possibility that we see another increase in the export estimate in the March supply and demand report. The bull spreads are breaking out to the upside. Look for the old crop to continue to widen against the new crop.

Wheat                                             Estimated Fund Position
Trends
Short Term: Down                        Net Long Futures and Options: -87056
Long Term: Down                         Change: -2000
Overnight Trade: Chicago: H -5 3/4 KC: H -5 1/4
Opening Calls: 3-5 Lower

Wheat export sales were very good at 701,600 MT. That makes 2 of the past 3 weeks that sales were over 700,000 MT. The US wheat market definitely needs to see better demand news, so the past few weeks have definitely been supportive. Wheat is still going to follow the corn and there is little indication that we will see anything other than choppy trade today.

Soybeans                                       Estimated Fund Position
Trends
Short Term: Up                             Net Long Futures and Options: 76639
Long Term: Up                              Change: +4000
Overnight Trade: H +1 X Unch
Opening Calls: 1-3 Higher

Soybean and product sales were great this week. Old crop soybean sales were a marketing year high of 1.16 MMT, meal sales came in at 216,000 MT, and soybean oil was also a marketing year high at 25,200 MT. In addition to that there was the 2.8 MMT of new crop soybean sales to China that was formalized last week. Right now there is little doubt that USDA is underestimating the export estimate and we should expect to see an increase in the estimate in the next supply and demand report. I am still looking for $12.90 in the March contract before we see a correction.

Live Cattle
Trend
Short Term: Up
Long Term: Up
Opening Calls: 10-40 Higher

Live cattle futures posted sharp losses on Thursday, led lower by the expiring February contract. Feb was off over 2.00 on the day, following the 19 deliveries posted after the close on Wednesday. All of the deliveries were retendered and taken on Thursday, with no new notices posted. Cash trade is nonexistent, with bids of $126‐$127 and asking prices near $132. As we have seen for the past couple of months, cash trade is headed for the eleventh hour before anyone blinks. We continue to expect trade to develop modestly higher for the week.

Feeder Cattle
Trends
Short Term: Up
Long Term: Up
Opening Call: Mixed

Feeder cattle futures closed moderately lower on Thursday, with prices holding up reasonably well in the face of the big sell off in the fats. Cash index levels, along with the prospects of weaker corn prices into the fall lent support to feeders. This afternoon’s on feed report should show continued tightening supplies of yearling cattle. If placement weights continue to come in on the light side, feeders will need more of a selloff in the fats to break their spirit.