Pro Farmer Senior Markets Editor
From Pro Farmer
Updated as of 7:00 a.m. CT
Note: I will be out of the office on Monday, Oct. 20. Your next Bullpen
will be Tuesday, Oct. 21.
Feedlots current, supplies tightening...
USDA will release their monthly Cattle on Feed Report this afternoon
at 2:00 p.m. CT. Traders look for the report to show a very current feedlot
situation, as On Feed and Placements are expected below year-ago levels, while
Marketings are seen above year-ago. Pre-report position squaring yesterday led
to some short-covering support. But while feedlot supplies are tightening, traders
remain more concerned about demand prospects due to fears or a recession.
One concern this morning is the expected lower start to the stock market,
as U.S. stock futures point to a sharply lower open today. Thursday was a
volatile day for the stock market, which ended with the Dow surging 401 points
after trading lower earlier. Major European markets are higher today. Asian
markets closed mixed, with Japan's Nikkei up 2.8 percent.
Avg. Trade Guess
Make sure you check Pro Farmer's "Leading Edge Reports" following
the release of the report for full details and analysis.
Keep your comments coming. Always good to have conversation with you
and input on what you'd like to talk about. E-mail
your comments/question to me by clicking here. Please include your location.
Opening calls. These calls originate
more than three hours before the open -- use caution, things change:
Corn: 3 to 6 cents higher. Futures were firmer overnight amid short-covering,
but key for holding early gains will be outside markets. Futures closed mid-range
yesterday, closing slightly lower. December corn posted a new-for-the-move
low of $3.71 1/2 to violate support at the mid-January 2007 low by 1/4-cent.
The next critical layer of support lies at the bottom of the mid-January 2007
gap area at $3.53.
Soybeans: 10 to 14 cents higher. Futures were firmer overnight amid
short-covering, but how outside markets trade will be key in today's price
direction. Futures closed firmer yesterday amid late-session short-covering.
January beans posted a new-for-the-move-low of $8.38 before recovering. Next
support lies at the August 2007 low of $8.33. Resistance begins around $9.00.
To signal a near-term low, futures need to return above the $10.00 level,
which closely coincides with the Oct. 9 high.
Wheat: 4 to 9 cents higher. Futures were firmer overnight on spillover
support from neighboring pits, but key to holding early gains will be how
outside markets perform. Futures trimmed losses into the close yesterday,
finishing slightly lower. December Chicago wheat violated support to post
a fresh weekly low of $5.43, which is now initial support.
Cash cattle expectations: $2 lower.
Cash cattle trade is complete for the week, with active trade seen at $90,
which is down $2 from the bulk of last week's trade. Continued pressure on the
beef market doesn't bode well for next week's cash prospects.
Futures call: Mixed. Futures are called mixed as there is a possibility
for short-covering as traders even positions ahead of this afternoon's Cattle
on Feed Report. December live cattle posted a new contract low of $90.15 yesterday
to do more technical chart damage, but closed mid-range. Futures need to fill
the early October gap, at $97.50, to signal a near-term low has been posted.
Cash hog expectations: Lower.
Packers are working to keep cutting margins in the black and got a boost yesterday
from the $1.11 improvement in pork cutout values. But with supplies plentiful,
more cash pressure is anticipated today.
Futures call: Steady to weaker. Futures are due for a corrective rally,
but momentum remains with bears and futures are called lower based on continued
cash weakness and concerns about the economy. December hogs hold around a
$10 discount to the cash index, but traders say there is plenty of time to
narrow the spread and they expect cash to continue lower. Yesterday, December
hogs gapped sharply lower on the open and posted a fresh contract low of $55.90.