Bret Crotts  |   January 24, 2012

Corn                                    Estimated Fund Position
Trends
Short Term: Down               Net Long Futures and Options: 128105
Long Term: Up                    Change: +12000
Overnight Trade: H -2 1/2 Z -4
Opening Calls: 3-5 Lower

The March corn cleared the 50-day moving average yesterday, which is an important technical hurdle. The next upside objective for the March contract is now the $6.36 level, which is the 62% retracement of the last move down, but a move to that level doesn’t look likely this morning. Today it looks like the rain that fell in Argentina will weigh on the markets and the outside markets aren’t supportive this morning either. It will probably take some fresh demand news to get buyers interested today.

Wheat                                     Estimated Fund Position
Trends
Short Term: Down                  Net Long Futures and Options: -88635
Long Term: Down                   Change: +2500
Overnight Trade: Chicago: H -2 1/2 KC: H -2 1/2
Opening Calls: 2-4 Lower

The March KW is trading near the 40 and 50-day moving average resistance today and it will take a pop in the corn market to push through that level. Eventually the March KW should reach the top of the recent trading channel at the $6.80 - $6.85 area, but it will probably be later in the week. Wheat news is limited, which keeps corn in control of wheat’s direction.

Soybeans                                Estimated Fund Position
Trends
Short Term: Up                        Net Long Futures and Options: 19568
Long Term: Up                         Change: +7000
Overnight Trade: H -6 3/4 X -8 1/4
Opening Calls: 7-10 Lower

The March soybeans stalled out just below trend line resistance yesterday, but are at pre-report levels. The market has weaker overnight due to the rain in S. America, but the losses were small in comparison t0 yesterday’s big gains. The $12.25 level is now critical resistance. A move through that level would be the bears on the defensive.

Live Cattle
Trend
Short Term: Up
Long Term: Up
Opening Calls: 20-40 Higher

Live cattle futures closed higher across the board on Monday, with deferred contracts gaining on the front month due to higher corn futures. Support from Friday’s on feed report and a weakening Dollar were additional factors. We also saw the first significant strength in the beef market since the calendar turned. Show lists appear slightly larger, with very little carryover from a week ago. Asking prices of $128 in the south and $208 up north remain well above any current packer offers.

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

Feeder cattle futures closed mixed on Monday, with March weaker and the rest of the complex modestly higher. Prices remain near all‐time highs and cash trade continues to be supportive. The rising corn futures price is limiting gains in the feeder complex. Overnight prices are mixed on feeders, with corn relaxing 2‐3 cents off of Monday’s close. Strength in deferred live cattle should continue to support.