CORN
The December corn made new contract highs yesterday and again overnight partly due to data released by the FSA that suggests the acreage estimates for corn, wheat and soybeans will be lowered. There is also the concern that the yield estimate, particularly for Iowa and Illinois, will be lowered in the next crop production report. The market is considered overbought, but it can stay that way for a long time. Analysts look for a choppy, sideways/higher pattern to continue.
WHEAT
The whet is grinding higher with the corn. There is a great deal of overhead resistance in the September KW at the $8.23 area that is going to be tested again today. A close above $8.23 would make a move to $8.70 look reasonable on the charts, although it will take either continued strength in the corn or some better demand news to make it happen.
SOYBEANS
The November soybeans are testing the resistance at the 50 day moving average and at last Thursday's high. The ideas that acreage will be trimmed again is certainly supportive, but that is being offset somewhat by forecasts that aren't particularly threatening. On the charts it still looks like a move to the top of the trading range is possible, but the bulls need to see a strong close today to keep the upward momentum going.
LIVE CATTLE
Live Cattle futures closed narrowly mixed on Tuesday and appear to be ready for another quiet opening. A lower Dollar and slightly higher equity market could lead to a firmer opening. Cutouts remain on fire, gaining more than 2.00 in the Choice and Select cuts. Estimates of higher than a year ago placements in July are keeping some pressure on the December contract. Show lists remain priced $118-$119 in the south and near $190 in the beef to the north.
FEEDER CATTLE
Feeder Cattle futures closed moderately lower on Tuesday, feeling the heat from new contract highs in new crop corn. Some estimates as much as 26% above year ago levels on July placements are also weighing on the futures. Overnight trade was seeing moderate pressure on feeders, with corn eking out very modest gains. Some additional selling could be seen ahead of Friday's On Feed release.
CRUDE OIL
September crude oil traded higher during the overnight and early morning hours, supported by improved risk-taking attitudes and surprising inventory data. While yesterday's Merkel-Sarkozy summit failed to provide fresh solutions to the European debt crisis, the crude oil market appears to be looking at global equity market stability and weakness in the US Dollar as positives this morning. The crude oil market also appeared to be drafting off ideas of tighter North Sea supplies and firm demand. While private industry data late Tuesday showed a surprise build in crude oil inventories, the larger than expected decline in gasoline supplies helped lift the crude oil complex. Expectations for this morning's EIA report are for a draw of around 750,000 barrels.
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.
