Corn – No signs of fund short covering yet, the government announcement on E15 expected March 1
↓ The first thought during yesterday's support was that fund short covering already started but trading patterns during the day did not suggest that and open interest was down only 5724 contracts, if that was fund short covering it was on a very small scale for them
↑ A gov’t announcement is expected on March 1st in regard to E15 being approved for year-round use
↔ If approved we still won’t expect immediate support as it is expected to not start until 2025
↔ Both exports and ethanol have recently been solid showing that demand is not a problem right now
↔ We will keep watching for potential fund short covering and mention it in mid-day updates if seen
Beans – China returned from holiday and bought BRA beans, trade assumed US beans will be next
↔ It is reported that China bought 8 cargoes of BRA beans and trade added support yesterday assuming a US bean sale will be announced next, keep in mind US beans are still much higher priced
↓ If no 8 AM sales to China are seen today then some support from yesterday may ease today
↔ Bean OI was down 1856 contracts, not a large enough number to assume fund short covering yet
↓ Weekly exports have been poor which have been justifying the USDA’s recent lowering of exports and raising of bean carryout, an export improvement is needed soon or USDA’s carryout will stick
Wheat – The one grain market that can make the claim for possible fund short covering
↑ Last Friday’s COT report showed funds already covered 11K shorts and yesterday’s OI was down 8040 contracts which for wheat is a sizable number, both suggest fund short covering is possible for wheat
↓ SovEcon raised Russian export expectations for February from 3.0 MMT to 3.3 MMT
↓ Ukraine also looks like it will need to raise exports for February, already exporting 3.2 MMT
Cattle – Back month contracts supported expecting Placements at 88 Friday, no cash bids seen yet
↔ Yesterday’s PM BB was choice +0.28 select +0.42 packer BE at 185.80, packer cushion $5.89
↑ Back month contracts are seeing slightly better support expecting Placements on Friday at 88
↔ We agree with the 88 Placement estimate but it should be noted that while most Placement numbers have been lower than last year, it has been common to not come in as low as trade estimates
↑ BB is on a very slow grind higher but is at least trending higher, a $1 higher cash trade can still be expected this week starting with at least steady cash bids today (around 180 in KS/TX)
↑ Funds have been slow buyers but are adding speculative support again, any fund buying will be done strictly in the April contract