CORN
Friday, the September corn closed above the 50 day moving average, but was weaker overnight due to a combination of a strong Dollar and an extended forecast that is slightly less threatening. The forecasts will keep traders on their toes this week and changes in the forecasts will bring volatility to the markets. In the short run, a pull back to the $6.70 level in the September contract looks likely.
WHEAT
Pressure in the corn will keep pressure on the wheat. The wheat market is lacking any fresh bullish news that would allow it to move highr on it's own, so plan on the wheat being a follower today. Last week it looked like the September corn should be able to reach the $8.00 area, but that will be put on hold today. Basically, the forecasts for the Corn Belt will determine the direction of the wheat for the time being.
SOYBEANS
The November soybeans nearly reached $14.00 Friday and now that the market has reached it's objective and is overbought, a pull back is definitely warranted. The forecasts will determine how long the correction lasts, but for right now, one should plan on a move back to the middle of the trading range, which is near $13.50.
LIVE CATTLE
Live Cattle futures posted 3.00 - 4.00 losses for the week, with cash seeing a similar drop in price. The oppressive heat in much of the cattle feeding region is taking it's toll on weight gains, but reducing outdoor grilling as well. Outside influences appear a little softer to begin the week. Equities are weaker and the Dollar is firmer. Analysts say don't be surprised to see August continue to gain on deferred contracts.
FEEDER CATTLE
Feeder Cattle futures fell nearly 9.00 for the week in the lead August contract. The losses came as a result of .45 gains in corn and the sharp decline in fat cattle futures and cash. We are approaching our early target levels for the selloff, near the 134.00 level. Weaker corn values overnight could allow for a rebound from oversold conditions in the feeders. This Friday's Cattle on Feed Report is expected to be supportive.
CRUDE OIL
September crude oil traded lower during the initial morning hours, weighed down by a weak outside market tone, a rally in the US Dollar and ideas of the IEA releasing more supplies. There seemed to be a general pickup in flight-to-quality movement overnight, which sent gold prices to a new record high. The supply side of the crude oil market may have come under pressure on reports that the Alaska Pipeline has come back on line after maintenance over the weekend. Meanwhile, the Commitments of Traders Futures and Options report as of July 12th showed non-commercial traders were net long 194,446 contracts, an increase of 16,386. Non-commercial and non-reportable traders combined held a net long position of 215,403 contracts, an increase of 19,236 on the week.
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.
