BB stepped back bringing in a whole new round of fear trade to cattle

Corn – Beryl rains heavier than expected and centered mostly over areas that needed them most

↓ Rainfall totals were increased for Beryl in the Midwest just before it moved in and observed rainfall totals matched the 2” to 4” expectations over an area that needed active rains the most

↓ Volume suggested funds were quiet yesterday but open interest hints towards possible light selling

↔Funds are likely making new record shorts which raises the odds they will soon stop selling but there isn’t a reason yet to cause funds to start exiting shorts

↔Ethanol will be expected moderate today around 1050K, close to recent weeks’ numbers

↓ Friday’s July crop report will add in the acres from the June 28 report and will raise carryout

Beans – Bean oil turned around and weighed on beans, funds have more room to sell beans than corn

↓ After last week’s major bean oil bounce added support to beans, yesterday saw the opposite where bean oil turned back lower and spilled weight right back over to beans

↓ While it can be assumed funds will stop selling corn soon, the latest COT report showing them short 82% record beans still leaves room for more selling in this market

↔This is not the time of year for large exports but they are also not helping with last week at 379K

↔With Nov making new 3 year lows it is tough to find chart support, next guess would be 1000

Wheat – It continues to be: strong US yields, better than expected RU yields vs. strong recent exports

↓ Strong US yields still offer light resistance even though harvest pressure has eased recently

↓ Better than expected RU yields continues to add weight to overseas wheat markets and US as well

↑ Exports will be expected strong again tomorrow after seeing 3 weeks of strong sales in a row

Cattle – BB stepped back bringing in a whole new round of fear trade to cattle

↔Yesterday’s PM BB was choice -4.81 Select -0.41 packer BE at 200.02, packer cushion $5.99

↔Fundamentally a single lower BB report does not suggest the end of the upwards trend, we have seen 4 others in the last month and a half of this size that turned around and resumed higher

↓ Fear is the main issue causing selling, analysts predicted this week would see a move lower in BB and trade was very quick to assume 1 lower BB report confirmed their predictions

↓ Cattle are the most oversold compared to cash going back to December of last year, as of yesterday’s close futures were priced $9.50 under last week’s cash, obviously this means cash would now have to fall $9.50 just to catch up to what futures already have priced in right now