CORN
The corn market had a poor performance yesterday. The December contract posted an outside day down on the chart and is trying to fall out of the bottom of the trading range. The 50 day moving average is acting as support for the moment and the market is oversold, so the selling pressure should be limited today. The Supply and Demand Report comes out tomorrow, which should also limit selling interest. Analysts plan on a choppy, two sided session today.
WHEAT
The December Kansas City wheat fell back to the middle of the trading range yesterday in sympathy with the corn. There isn't any excitement expected in the report for the wheat market, so the market will be stuck following the corn today. Eventually, we will see USDA increase the wheat feed usage estimate, which will draw stocks down to very tight levels and when that happens, analysts say the wheat will likely become the upside leader of the marketplace.
SOYBEANS
It seems the soybeans are not able to hold gains. There have been good attempts at rallies over the past two sessions, but they don't last long. The price break is probably attracting fresh demand, which will only serve to make prices go even higher at a later date. Analysts say breaks are for buying.
LIVE CATTLE
Live cattle futures were steady to mostly lower on Monday, with lower corn values pressuring the deferred live contracts. Showlists appear to be significantly smaller in Kansas and Colorado, with slight builds in Nebraska and Texas. Overall, numbers remain very manageable. We could see some early week cash movement, based off of shortages in the south, but it's more likely that packers will fill the voids with contract and formula cattle. Overnight activity was narrowly mixed, with modest gains in the corn.
FEEDER CATTLE
Feeder Cattle futures rode the wave of lower corn prices to a modestly higher close on Monday. Feeders are once again approaching recent highs and major resistance points on the daily charts. Corn is modestly higher this morning, giving the feeders a bit of a pause in their recent move higher. Tomorrow morning's report is at the forefront for feeders over the near term. It is thought that any negative action from these levels in the corn will likely lead to a breakout higher in the feeders according to analysts.
CRUDE OIL
October crude oil registered a higher high during the initial morning hours, supported in part by weakness in the US dollar and modest lift in US equity markets. Some traders also pointed to expectations for another inventory draw in tomorrow's EIA report and modest uptick in geopolitical risk as factors that could be lending the crude oil market support. Meanwhile, uncertainty over a final verdict from the Fed to pursue more quantitative easing could be a force keeping prices within their three week trading range. The latest monthly report out of OPEC indicated that global crude oil supplies were ample and that there remained downside risks to demand into 2013.
There is substantial risk of loss to futures and options trading. Past performance is not indicative of future results.
By Donna Hughes
Lone Star Portfolio Advisors, Inc. was founded by Donna Hughes. Donna began her career in the industry in 1978 after graduating High School as a member of the Chicago Mercantile Exchange’s Inspection and Delivery Department where she was responsible for scheduling and facilitating the USDA grading and delivery for various Exchange Commodities. After 1 ½ years, she was offered a position working with George Segal, a prominent hedger in the Pork Belly market. It was through this relationship that she was mentored and taught the hedging process by working with Mr. Segal as well as other leaders of the Pork Industry. In 2004, Donna moved to Texas where her skills in the industry were utilized to help individual and corporate producers with their Risk Management Goals. Her Daily Market Commentaries are heard on the AllAgNews.com Radio Network broadcasting throughout Texas. She also contributes to magazines and periodicals including PetroEvents and Ag Monthly.
Donna created Lone Star and implemented strategic relationships with Daniels Trading and R.J. O’Brien leveraging their services to enable Lone Star to Build Lasting Relationships Thru Information, Execution and Research.
