Corn – USDA raised exports 25 mil bu, funds cover 46K shorts, March in the middle of the recent range
↔ Friday USDA raised exports 25 mil bu, many expected this due to recent improved weekly exports
↑ The export increase might raise fair value from 475 closer to 480, raise support levels slightly
↔ Funds covered 46K short positions which caused a surprisingly small impact on price recently
↔ The range trade in March can be expected slightly higher due to recent improved exports but the
total change is small, support now expected around 480 and resistance just over 490
↔ Since open interest fell drastically 2 weeks ago the total price movement in corn has been limited
Beans – Top end SA rain totals are moderate, funds liquidated 31K longs, solid support near 1300
↑ Northern BRA sees moderate rains days 1 – 5, all other areas see moderate rains days 6 – 10 but no
heavy/active rainfall events are expected, seeing only moderate rains may add support
↔ CONAB updated their production estimate to 160.2 MMT, most private analysts are 155 – 160
↔ Most analysts are talking a 5% production cut but seeing CONAB lower production 1.3% has taken a
fair amount of support out of futures until a larger weather threat is seen
↓ Funds liquidated 31K longs, now almost flat being long 37K or 14% of record
↑ Jan is finding solid support at fair value 1290 or just above that around 1300
Wheat – – A bit of cooling off from recent China buying support, funds covered 24K shorts
↓ Last night seeing a bit of cooling off from the recent China buying surge, likely that trades are not
expecting the China buying to last much longer and to see exports closer to normal levels now
↑ Funds covered 24K shorts, they are still short 96K (59% record) so more short covering is possible
↔ The COT report showed funds exiting positions in many markets before end of year, if that continues
it would mean buying in corn, very light selling in beans and buying in wheat
Cattle – Friday saw a technical bounce while news remains bearish, did NOT look like fund buying
↔ Friday’s PM BB was choice -1.83 select -0.93 packer BE at 173.33, packer cushion -$0.99
↓ Friday saw a technical bounce but BB was lower, cash trade is expected to show $3 lower, feeder
index was -$5.85 and the COT report showed through Tuesday funds sold 9K longs
↔ It is NOT common to see funds liquidate a major position just to turn around and be aggressive
buyers so it is unlikely Friday’s support was from funds, open interest all does not suggest fund buying
↔ It is more likely that Friday was small speculator buying, if they happen to buy the week before news
improves they know there is $10 to $15 potential upside, worth risking $3 or so on a Friday buy