Corn – GTE down 1% at 67%, analysts estimate yield at 183.1, will we see fund short covering again
↔ GTE down 1% at 67% which isn’t likely to be enough of a change to affect yield estimates
↔ Other analysts are updating their yield estimates close to what futures already have priced in which is around 183 – 183.5 for Monday’s report, up for current trend of 181
↑ We will see if fund short covering comes in again today as it did yesterday, remember that for grains a “get me out” trade mindset means buying, not selling like it is for many other markets
↔ Corn is stuck between expecting higher yields which prevents bounces and fund short covering which adds support, putting both together we are seeing a price level in the very low 400’s
Beans – GTE up 1% which was a surprise at 68%, analysts new estimate for yield is 53.1
↓ GTE up 1% which was a surprise as most in trade likely expected steady to down 1%
↔ Like with corn, other analysts are raising yield thoughts on new estimates with the latest being in beans at 53.1, a number we can agree with and a move above current trend 52.0
↔ All grains will wait to see if there is more short covering after 8:30, on a % of record basis funds are more short beans than any other Ag product
↑↓ Beans are in the exact same situation as corn, seeing support from fund short covering while seeing resistance from expectations that yield will be raised, beans add in the occasional China buying rumor
Wheat – Overseas holds yearlong lows so far, fund short covering possible here as well
↑↓ Wheat is in a similar situation as corn/beans with fund short covering possible but the difference is that the short term pressure has been from seeing overnight levels reach back to yearlong lows
↔ The dollar has moved aggressively lower recently, that might add a bit of support after 8:30 as well
↔ Funds are 48% of record short in wheat, their smallest Ag position but still some covering possible
Cattle – Macro panic selling not seen last night, BB up strong to new highs since 7/16
↔ Yesterday’s PM BB was choice +4.17 Select +2.89 packer BE at 196.22, packer cushion $7.45
↑ We did not see macro selling last night which may ease up some pressure on cattle today
↑ BB saw an aggressive bounce back to the highest level seen since July 16th
↔ The combination of higher BB and a lower cash trade last week puts packer profits near a neutral number of $7, we could still see a bounce though as futures are priced $7 under last week’s cash
↑ A steady cash trade would be seen as supportive this week with futures this much oversold