Corn – The lack of fresh news continues the grind lower, OI implies fund selling resumed
↓ A continued lack of fresh news is continuing the trend that already exists which is for a grind lower
↓ Open interest increased by 10K yesterday implying that additional fund selling may have been seen
↔ Funds are already at 82% of record shorts, any level in the 80s is considered aggressively short
keeping in mind that 100% represents a level that is only been reached one time since 2007
↓ Overnight took out the most recent low from the last set back by ¼ penny, new low is now 436 ½
↔ Last week’s ethanol report was poor at 818K, we will see if tomorrow’s report finds a rebound
Beans – Open interest increased 17K suggesting fund selling may have been active yesterday
↓ Fund selling continues to be more active in corn than beans and with an open interest increase of 17K
it would suggest that yesterday’s selling was active fund selling again
↔ It has recently become clear that traders are no longer focused on whether map changes, it is the
time of year key production rainfalls have already fallen, trade now waits for harvest numbers
↓ March took out all nearby support levels, next support is a 3 year low of 1181 ¼
↔ Seasonals call for a recovery this time of year but traders still need see a reason for support before
we can expect the seasonal to play out, the market will not find support from seasonals alone
Wheat – Overseas wheat continues making new 3 year lows which adds weight to US wheat
↓ Again yesterday overseas wheat may new 3 year lows, overseas wheat does not offer spill over
pressure to US wheat unless it is making a major move which it is doing right now
↑ Exports were strong last week which should help to keep US wheat from following overseas on the
same scale of a setback being seen there, 3 year lows of US CHI wheat is 540
Cattle – Showlist -5100, BB still slightly higher, some profit taking on reaching the 100 day MA
↔ Yesterday’s PM BB was choice -1.11 select -0.31 packer BE at 186.77, packer cushion $12.31
↑ A slightly lower showlist adds light support to start the week
↔ BB was lower yesterday but needs to trend lower for at least 3 days before becoming concerning
↓ The 100 day moving average may have sparked some profit taking for those who have been long the
last 2 weeks and acted as first resistance as expected, today the 100 day MA is at 182.80
↔ Last week’s average cash trade at 174.46 was not as high as expected, this isn’t bearish but it is a
sign that futures are priced about $2.50 over last week’s cash
↔ BB is still key and should continue to be the #1 factor to watch, 3 months of being the best guide