Schwieterman: Commodity Weakness Weighs On Live & Feeder Cattle Prices

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Corn                                      Estimated Fund Position
Trends
Short Term: Up                    Net Long Futures and Options: 325233
Long Term: Up                    Change: -14000
Overnight Trade: H -6 1/2
Opening Calls: 5-10 Lower


Support has failed at the $6.05 - $6.09 area in the March corn, which makes the $5.90 area the next downside target. Most of the weakness seems to stem from macroeconomic issues and general commodity weakness, but traders are also looking at the Argentine forecasts which at times look more favorable. US fundamentals are still very favorable, which should help uncover buying interest today.

Wheat                                  Estimated Fund Position
Trends
Short Term: Up                   Net Long Futures and Options: 2864
Long Term: Up                   Change: -4000
Overnight Trade: Chicago: H -12 1/4 KC: H -7 3/4
Opening Calls: 10-15 Lower


The wheat market followed the other commodities lower yesterday and again overnight. It is still dry in the US HRW region and still too wet in Australia, which makes the fundamental outlook for the wheat bullish. In the meantime though, plan on pressure to start the day and a test of support at the $8.30 - $8.35 area in the March KW.

Soybeans                            Estimated Fund Position
Trends
Short Term: Up                   Net Long Futures and Options: 142449
Long Term: Up                   Change: -5000
Overnight Trade: H -6 3/4
Opening Calls: 5-10 Lower


The March soybeans are holding at trend line and retracement support, which lie at the $13.57 area. Changing Argentine forecasts have traders on their toes as they try to guess how many more soybeans the Chinese will import from the US. If yesterday’s low holds today, that will be a good indication that this correction is over.

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


Live cattle futures continued to work its way lower on Tuesday, as lower cash trade and general commodity weakness weighed on prices. Fundamentals remain supportive, with beef prices continuing to push higher along with the drop products. This weeks cash trade appears to be steady at best, which remains a positive after the windfall gains of the past couple of weeks. Overnight activity was mostly firmer.

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


Feeder cattle futures closed moderately lower on Tuesday, pressured by lower live cattle trade and general weakness in the commodity sector. Overnight traded narrowly mixed, in spite of another weak round of trade in the corn pit. Corn has fallen more than .30 of their highs posted on Monday. Cash feeder trade remains stout, with record to near record prices being recorded on a daily basis.



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