Near record short positions in wheat

Market Line Nov. 30, 2011 Wheat futures posted good gains Tuesday with Chicago the leader as few deliveries are expected against the December contract. Outside markets were again helpful for wheat, a weak dollar being among those factors.

The latest Commitment of Traders report showed combined spec and fund net short position in Chicago wheat to be at or near a new record leaving the market vulnerable to a short covering rally.

Jerrod Kitt with the Linn Group at the CME had this comment on expectations for today.

Kitt: “We are going to be looking to see if this rally will continue for one more day here. I don‘t know how optimistic I am, but we‘ll see. Deliveries are going to be important. We are going to see exactly what will happen on corn and wheat and we will see.”

Heavy rains in eastern Australia are again causing quality concerns for wheat at harvest time as they did last year.

On Tuesday Chicago March wheat up 23 cents at 6-16. March corn up seven cents at 6-05 ½. Portland soft white wheat and club wheat five to ten cents higher at 5-85. Hard red winter 11.5 percent protein up by 17 to 22 cents at 7-19. DNS 14% protein up 18 cents at mostly 9-70.

Live cattle futures were lower Tuesday with feeders mixed. Outside markets were called supportive but traders are still waiting for cash market developments. Month end position squaring was also noted. February live cattle down a dime at 122-45. January feeders up a dime at 144-82. January Class III milk up two cents at 17-52.

I’m Bob Hoff and that’s Market Line on Northwest Aginfo Net.

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