CORN
The September corn made a new high for the move yesterday and again overnight. The steadily improving basis levels are very supportive to the front month of the corn and call into question whether or not the June 30th stocks report was accurate. With the bulk of the country running at a positive basis, that is a very good indication that futures are too low. The forecasts still suggest we will see very high temperatures in the Western Corn Belt, which is also supportive. Traders may not want to go home short today. Expect a slightly lower crop condition rating on Monday and the following Monday as well according to analysts.
WHEAT
The September KW is working it's way higher. $8.00 is still a reasonable upside objective even if this is merely a short covering bounce. News is pretty limited. The wheat will be dependent on the corn for direction today. The wheat probably won't be able to show any independent strength until we either se better export sales or people become more concerned about planted acreage here in the HRW Belt.
SOYBEANS
As has been the case for over a week, the November soybeans are continuing their march towards $14.00. The weather is very important just as it is every summer and traders will be watching the crop condition ratings closely. A sharp decline over the next two weeks will be very supportive to the beans. Under the current supply and demand scenario, a 1 bu/acre loss would likely allow the Novembre soybeans to reach to $16.00 area at some point.
CATTLE COMPLEX
August cattle sold off sharply yesterday and traded back to its lowest level since June 30th, down almost the 300 point daily limit. The cattle market was under pressure early during Thursday's trading, with many traders concerned that the approaching hot weather will create lower beef consumption. The "heat" issue was emphasized later in the session when it was reported that cash live cattle traded at $111.00, down from $114.50-115.00 last week. Earlier this week feedlots were asking $117.00-$118.00, but they may have encouraged to sell when they saw hot weather approaching. The weekly Export Sales report released before the open yesterday showed beef sales came in at 17,200 metric tonnes for the week ending July 7th, compared with the prior 4-week average of 13,800 tonnes. Cumulative sales for 2011 have reached 508,00 metric tonnes, up 35% from last year's pace and approaching the record pace set back in 2003. The estimated cattle slaughter came in at 128,000 head yesterday. This brings the total for the week so far to 514,000 head, up from 383,000 head last week at this time but down from 519,000 head a year ago. Boxed beef cutout values were up 7 cents at mid-session yesterday but closed 22 cents lower at $181.75. This was still up from $179.67 the prior week but it broke a 2-day pattern of solid gains of $1.30 or more. Average dressed steer weights for the week ending July 2 came in at 838 pounds, up from 833 pounds the previous week and up 1.33% from a year ago. The 5-year average weekly weight for that week is 834.2 pounds. Beef production for the same week came in at 515.9 million pounds, up 1.92% over year ago.
CRUDE OIL
August crude oil traded mostly flat to lower during the initial morning hours, pressured by another US credit downgrade warning. However, some traders viewed slight weakness in the US Dollar and gains in global equity markets as forces that could offer support. It also seemed that that the crude oil market was focused on this morning's US economic calendar and comments out of Washington for its directional clues. While today's economic data is expected show modest improvement from their previous readings, disappointment could bring economic slow-down fears back in focus and weigh on crude demand prospects
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.
