CORN

Corn futures were flat overnight and remain in a consolidation pattern awaiting direction.  Dec corn, at 3.34, did managed to post a modest gain for the third consecutive session, which is a positive sign.  However, Managed funds still hold a large short position and are expected to stay that way until persuaded to exit.  Weather would need to become an issue for a major portion of the newly planted crop in order for a short-covering rally to ensue.  A drier pattern is forecast for the Midwest in the 10-day outlook.  Weekly ethanol stats today should show an uptick in production, and thus corn demand as ethanol plants ramp up production.  Weekly Export Sales, normally scheduled for today, will be out tomorrow due to the closure of the markets on Monday.  Outside markets are mainly viewed as a non-factor this morning.

SOYBEANS

Soybean futures were mixed overnight, trading both sides of steady with Nov hovering just above the pivotal 8.50 price level.  A strengthening of the Brazilian real, which made another multi-week high overnight, versus the U.S. dollar and improved Chinese demand has been helping support the soybean market.  Even with the up move in the Brazilian currency, news wires were reporting China bought more than 10 cargoes Brazilian soybeans this week.  Prices are challenging key resistance levels, which could bring some short covering into the market if prices continue to build on a bullish tilt and stay above their near-term moving averages.

WHEAT

Wheat futures traded 2 to 3 cents higher overnight and seem stuck in neutral.  There is nothing new to report for the market heading into the end of the month.  Improved winter wheat crop ratings and global competition with U.S. supplies facing headwinds from the disadvantage of a healthy currency limit rallies. Overnight, Japan bought 112,000 tons of U.S/Canadian/Australian wheat in a routine move.

CATTLE

Live cattle futures are called steady to higher.  Cash was undeveloped on Wednesday, but early indications are at least steady with last week.  June live cattle are back above 100.00 for the first time since early March.  Retail prices continue to soften, but product movement has been overall good.  Strong technical closes on Wednesday points to additional short covering and money flow into the cattle market today.

HOGS

Lean hog futures are called mixed to lower after the technical bounce/rally stalled. Weakness in retail values and cash markets equate to selling pressure in the front month contracts, particularly in light of a strengthening of the slaughter pace.  Farther out, an improved technical picture in the deferred contracts could lead to additional short covering for those months.

Author

Matthew Strelow