CORN
The corn closed in the upper end of the trading range yesterday, but slipped lower overnight. Today we will probably see a test of yesterday's low, which will be a critical support level. Failure at yesterday's low in the December contract will suggest a move down to the 38% retracement, which is at the $6.55 area. The extended forecasts look less threatening than this week's weather, but are still less than ideal. Analysts expect to see crop condition ratings decline in Monday's report, and right now there is little reason to expect improvement in the ratings the following week.
WHEAT
The September KW is overbought and can't push through the $8.00 level. Without bullish demand or strength in the corn, it is difficult for the wheat to rally. Right now the best support in the wheat comes from ideas that more and more wheat is being put into the feed mix and planting conditions are terrible. For the moment, analysts say you have to plan on pressure for today, unless the mid-day forecasts become more bullish for the corn.
SOYBEANS
It looks like we are set for another day of consolidation in the soybeans. The market has been holding at the top of the trading range and we haven't seen any news that would cause the beans to breakout. It will most likely be the forecasts that give the soybeans direction and basically the hotter the August forecast is, the higher the beans will go, or favorable forecasts would send the beans back to the bottom of the range.
LIVE CATTLE
Live Cattle futures closed mixed on Thursday, with the front two months modestly higher and deferred contracts lower. Overnight is narrowly mixed, with traders hesitant to sell heading into positive On Feed Report estimates and hesitant to buy in the face of the weak cash and cutout activity. Estimates for the report are up 1-2% on feed, 6-7% on placements and 2-3% higher on marketing. Outside influences appear slightly negative to start the day.
FEEDER CATTLE
Feeder Cattle futures closed mostly higher on Thursday, supported by the lower corn trade. Overnight was similar, with corn softer and Feeders showing a little upside potential heading into this afternoon's report. Cash index levels are dropping rapidly, with many sales this week seen $5-$6 below week ago prices. Analysts look for an uneasy, choppy trade as tight numbers battle economic uncertainty.
CRUDE OIL
The economic environment makes it difficult for the US Dollar to have much in the way of reasons to not decline. This provides a lift at times to energy markets and the benefactor of that lift yesterday was crude oil. However, despite crude oil closing higher product markets closed lower. This is still a sign of uncertainty in the energy markets. September Crude Oil was able to move slightly above $100.00 yesterday for the first time since June 10th but was unable to hold above that level. Late in the session Crude Oil broke $1.30 lower reminding those that current economic and fundamental conditions do not warrant $100.00 Crude. The hope that more economic stimulus is coming is likely a main reason energy markets have kept a measure of underlying support.
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.
