Corn – Open interest down 57K, fund short covering yesterday is a “maybe”, other news still quiet
↔ Open interest was down 57K which is a major change, still can only label fund short covering as a
“maybe” due to option expiration Friday meaning we should have expected an OI decline anyway
↔ As stated before, we will need 2 – 3 days of support and an OI decline before claiming short covering
↔ Chart levels that begin to suggest a turnaround are the 1st major downtrend line at 437 ½ and the
38% retracement at 455, still a fair amount above the current market level
↑↓ The fundamental side is mixed with ethanol strong last week but exports disappointing
↑ We may anticipate speculative buyers who will be trying to get long ahead of any fund short covering
Beans – Open interest down 22K, technical levels to suggest a recovery are far above the market
↑ Like corn, overnight traders are adding support as speculators anticipate in both markets the
possibility that fund short covering may have started
↔ Also like corn, OI down 22K following option expiration still suggests fund buying was a “maybe”
↓ Fundamentals for beans still bearish with exports last week near 30 year lows
↔ Many speculators will be looking for fund short covering but it would help substantially if there was
fundamental news to go with any potential recovery or suggest that a recovery can be long-lasting
↔ Technical signs for a change in trend are even higher than corn with the 1st major downtrend line at
1211 and the 38% retracement at 1249 ½
Wheat – Wheat OI down 8K, a small number for option expiration, overseas wheat mostly sideways
↔ Unlike corn/beans, a 8K drop in open interest was a relatively small number given option expiration
↔ Overseas wheat has been sideways and choppy for 5 days now, not offering much influence lately
↓ Exports were poor last week but not a major impact yet with the previous 5 weeks being strong
Cattle – Ave cash trade last week +2.65 at 182.56, showlist +11K, BB still grinding higher
↔ Yesterday’s PM BB was choice +1.18 Select +1.68 packer BE at 187.26, packer cushion $4.70
↓↑ Showlist this week is +11K but BB continues a solid grind higher offsetting some showlist concern
↔ Packer profits near $5 is not poor but is not strong enough to assume a higher cash trade this week
↔ Trade likely slow today waiting for 1st cash bids and may not start with a higher or lower assumption
↔ Futures are priced $3 over last week’s cash which is slightly ahead of the market right now but not at
an extreme level, as long as BB continues a grind higher, futures remain confident priced above cash