CORN
The corn was quiet overnight and did not build upon yesterday's new contracts highs. The market is overbought and a correction could occur at any time, but it is becoming painfully obvious that USDA will have to cut the yield estimate in future crop reports, so any breaks in the market are a buying opportunity. The Pro Farmer tour found less yield potential in both Nebraska and Indiana yesterday and their findings suggest that USDA will have to make a large yield cut in Indiana. Look for two sided trade today and buy breaks.
WHEAT
Like the corn, there was no follow through higher in the wheat after yesterday's strong gains. A set back today would fit in with the sideways/higher pattern we have been stuck in, so I won't be surprised to see pressure in the wheat. However, with corn prices expected to keep rising, analysts doubt that wheat wll be left very far behind, so breaks in the wheat are buying opportunities as well.
SOYBEANS
Once again the November soybeans stalled out at $14.00. If you are a speculator, look at selling the beans and using a close over $14.00 as a stop. If we close above $14.00, analysts believe there will be large gains. A little bit more yield loss or a little bit better demand will make stocks levels very tight, which would warrant the higher prices.
LIVE CATTLE
Live Cattle futures closed mixed on Tuesday, with the front months moderately lower and February up .17 for the day. Beef prices came under pressure in the afternoon release, possibly signaling the end of the recent run of strength. Overnight trade was narrowly mixed, with support from the firm finish in equity markets on Tuesday. Look for a choppy trade ahead of this week's cash business.
FEEDER CATTLE
Feeder Cattle futures were mixed on the close Tuesday, with the expiring August contract higher and deferred months moderately lower. The recent highs posted in the corn market are taking their toll on the feeders. That pressure along with declining confidence in the live cattle market could weigh on feeders into week's end. Overnight trade was light in a narrow range, with corn closing modestly lower for the session.
CRUDE OIL
October crude oil prices grinded lower during the initial morning hours, pressured by weaknesses in global equity markets and soft German economic data. Meanwhile, private industry data released late Tuesday showed a large and unexpected decline in US crude oil inventories, partially in response to a notable increase in refinery capacity. This is quite different than expectations for this morning's EIA report, which call for a 1.0 to 1.5 million barrel build. Some traders suggested that overnight weakness in crude oil might have been limited due to reduced oil supplies coming out of Nigeria, as companies in the region repair damaged pipelines. In the meantime, the crude oil market faces Fed Chairman's Jackson Hole speech this Friday with hopes for more simulative measures to jump-start a struggling economy.
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.
