Schwieterman: Feeder Cattle Futures Lower, Corn Steady

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Corn                                    Estimated Fund Position
Trends
Short Term: Down             Net Long Futures and Options: 273484
Long Term: Down             Change: -20000
Overnight Trade: Z +1
Opening Calls: 1-2 Higher


The December corn had an 18 cent trading range overnight and had very large trade volume, but the market ended up near unchanged. The outside markets are quiet, so it looks like we are set for a cautious opening in the corn. This week will be shortened by Thanksgiving and grain options expire on Friday, which will add a twist to this week’s trade. The long term fundamentals still look bullish, but in the short run concern about the blenders credit and the blend wall will made traders nervous. Plan on two sided trade today, with wide price swings.

Wheat                                 Estimated Fund Position
Trends
Short Term: Down             Net Long Futures and Options: -39427
Long Term: Down             Change: -1000
Overnight Trade: Chicago: Z +1 1/4 KC: Z +3 1/4
Opening Calls: 2-3 Higher


The wheat traded both sides of unchanged overnight and one should expect more of the same in the day session. The wheat has made a good bounce off the lows, but momentum seems to be waning. The market needs to see the current export pace continue and see some consistent gains in the corn in order for the wheat to keep moving higher.

Soybeans                          Estimated Fund Position
Trends
Short Term: Down           Net Long Futures and Options: 118977
Long Term: Up                Change: -7000
Overnight Trade: F +10
Opening Calls: 7-10 Higher


The beans had a strong bounce overnight, but like the other markets, failed to hold the gains. However, it looks like the soybeans will have the best chance to hold gains today, since Friday’s action was way overdone and breaks in the market are merely buying opportunities for end users. A positive close today would confirm the correction is over.

Live Cattle
Trend
Short Term: Up
Long Term: Up
Seasonal: Up
Opening Calls: Steady/Higher


Live cattle futures finished higher on Monday, with bullish placement and marketing figures along with an incoming winter storm producing the buyers. Cutouts were mixed, with choice down and select higher. The storm looks to effect eastern Colorado, Nebraska and most of the Kansas feeding areas. Some of the northern areas could receive over a foot of snow. The 25 loads of deliveries from Worthing were re-tendered and claimed by a commercial. Overnight activity is showing good strength in the December and mixed activity in deferred contracts. Cash trade could develop today, with prices expected to be higher.

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


Feeder cattle futures were mostly lower on Monday, with the same winter storm that is price friendly to the fats, weighing on feeders, as feedlots won’t want to place cattle into snow covered pens. Cash index levels are improving, but could stagnate for the next several days. Overnight activity is quiet, with mixed trade in the feeders. Corn values traded near steady in overnight trade.



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