CORN
The new crop corn futures made new contract highs overnight an the July contract is approaching the all time high. Traders are assuming at this point that USDA will cut the yield estimate in the September crop production report and that the job of the market is to slow demand. Crop condition ratins are expected to be steady to lower again, which only confirms the ideas that the crop isn't going to get any better. The market is overbought, but can stay that way a long time. Analysts plan on further gains.
WHEAT
The December KW is testing the resistance at the 62% retracement of the move down from the May high. The market is overbought and the wheat is mostly being supported by the corn market, so there is a chance that the resistance holds for a little while. Long term though, one should look for the wheat to keep climbing with the corn. The job of the whet market right now is to attract acres and to keep too much wheat from falling into the corn. The job of the wheat market right now is to attract acres and to keep too much wheat from falling into the feed mix.
SOYBEANS
The November soybeans closed decisively above the $14.00 level Friday and had follow through buying overnight. $14.00 level Friday and had follow through buying overnight. $14.00 should now act as support and the new upside objective for the soybeans is probably the $16.00 area. The soybean crop can't afford to lose more yield potential and we can't afford much more demand, because it looks very likely that the soybeans will lose acreage next spring and that we will have tight supplies for the next two years at least according to analysts.
LIVE CATTLE
Live Cattle futures had a strong close on Friday, to post very modest losses for the week. The lower cash trade and fairly steady beef trade left packers with solid margins heading into months end. Outside markets appear supportive, with good strength in equities and the Dollar down another 20 points. Packers will be hoping for a short kill week, which may limit demand. Technical indicators are turning up on the daily charts.
FEEDER CATTLE
Feeder Cattle futures closed higher to sharply higher on Friday, as traders seemed willing to follow the fats rather than sell into the sharply higher corn. Corn was up another 7-8 cents in overnight trade which may limit buying in the feeder pit. Outside markets are supportive and technical indicators are trying to turn up. Timing and corn prices may keep the market choppy over the coming weeks.
CRUDE OIL
October crude oil traded higher during the early morning hours, helped by weakness in the US dollar, a rally in global equity markets and ideas that Fed Chairman Bernanke is willing to pursue more stimulus measures. Some traders also suggested that there was a sense of relief in the markets following Hurricane Irene, which has now been downgraded to a tropical cyclone. With storm fears easing, the crude oil market will probably turn its focus back to the US economy. While last week's Durable Goods Orders and Bernanke's speech were viewed as positives, the market remains concerned with weak economic data Friday that showed US Q2 growth lower than expected. That probably puts an added level of importance on this morning's US economic data on July personal Income and Spending for any signs of improvement. The Commitments of Traders Futures and Options report as of August 23rd showed non-commercial traders were net long 180,497 contracts, an increase of 4,013. Non-commercial and nonreportable traders combined held a net long position of 196,447 contracts, for an increase of 6,194 on the week. The speculative buying trend is seen as a positive force that is expected to continue until support levels are violated.
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.
