CORN
The December corn touched the contract high of $7.22 3/4 overnight. This is obviously critical resistance and a close above that level today would encourage speculative buying. Crop condition ratings will probably be steady to lower in this afternoon's report, which will further support ideas that this year's corn yield will be at, or below last year's level. Fresh demand news would be helpful to the bull, but right now all traders have to go on is new crop supply concerns.
WHEAT
The wheat was strong overnight, with the September KW getting back Friday's losses. Failure to build on Thursday's gains is a little disappointing, but one has to remember that until there is some wheat specific news to trade, the wheat market is just going to follow what the corn is doing. If the corn can make new highs today, it is very likely that the wheat will make new highs for the move.
SOYBEANS
The November soybeans failed at the 50 day moving average Thursday, but looks like it will retest that resistance today. Like the corn, the crop condition ratings will probably be steady to lower, which is supportive and will help confirm ideas that USDA's cut in the yield estimate is correct. The beans are slowly working up to the top of the trading range and the soybeans have the best chance at a positive close today.
LIVE CATTLE
Live Cattle futures had a solid week higher, gaining more than 2.00 in the active October contract. Boxed beef prices were around 7.00 higher for the week, but will need to continue strengthening to keep packer margins capable of higher spending. Outside markets are supportive so far, with a lower Dollar and higher equities. The upcoming Labor Day holiday should keep beef movement supported.
FEEDER CATTLE
Feeder Cattle futures gained 2.65 basis the September contract for the week. The gains came in spite of double digit gains in the corn futures for the same period. Corn is stronger again overnight, with new highs posted for the move and contract highs equaled in the December contract. Outside markets should continue to be monitored closely for direction, but the market now looks poised to test contract highs in the coming weeks. This Friday's On Feed Report should provide support.
CRUDE OIL
September crude oil took traded fractionally higher during the initial morning hours, as traders noted a level of encouragement after Friday's US Retail Sales data and better than expected GDP figures in Japan. It is also possible that there was a measure of overnight support on reports that Gaddafi forces in Libya lost control to a key oil town near Tripoli (Zawiyah) to rebels. The Commitments of Traders Futures and Options report as of August 9th showed non-commercial traders were net long 178,993 contracts, a decrease of 13,175. Non-commercial and non-reportable traders combined held a net long position of 216,962 contracts, a decrease of 11,730 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.
