CORN
The corn made a great recovery from early losses yesterday, but did not make new highs and did not see follow through buying overnight. This means the corn market is in the same situation as yesterday. We are dealing with an overbought market that is due for a correction, but also a market with shrinking production and tightening stocks. A correction can occur at any time and may be short lived like yesterday, but until the corn crop stops shrinking, the corrections are buying opportunities.
WHEAT
Wheat was the weak link yesterday. The December KW is still consolidating near the 62% retracement of the last move down. There is little whet specific news to move the market although there have been some visible export sales that are always good to see. We are either going to see a few more days of sideways trade to relieve the overbought condition or a price break. In the long run a price break would be a buying opportunity, but in the short run we have to pay attention to the loss of upward momentum.
SOYBEANS
Traders are now becoming concerned about the falling crop condition ratings and the dry areas of the Corn Belt. Not too long ago the consensus was that USDA cut the yield estimate too much in the last report, but that is changing. The market is still overbought and still due for a correction, but that correction may not begin until the November beans move above $15.00. This market is right on the cusp of becoming extremely bullish according to analysts.
LIVE CATTLE
Live Cattle futures closed narrowly mixed on Tuesday, with support from outside markets and weakness in the beef market offsetting. Overnight is much the same, as higher equities were supporting while buyers remain wary due to fear of falling cutout values. Major support for the October contract remains intact near the 114.00 level. The August contract expires today with open interest still above 500 contracts.
FEEDER CATTLE
Feeder Cattle futures managed moderately higher closed on Tuesday, as cash trade continues to support. The late surge in corn prices into the close on Tuesday weighed on feeders in overnight trade. A downward channel remains in place in the feeder chart pattern. Rebounds are expected to find solid selling interest.
CRUDE OIL
October crude oil traded lower during the initial morning hours, responding to weakness in Brent crude oil and a level of concern ahead of today's EIA inventory data. It is possible that private inventory readings that showed a larger than expected build in US crude supplies last week may have tempered this morning's macroeconomic optimism. Some traders suggested that the early weakness could be the result of a market that has rallied nearly $10.00 and closed higher for 6 of the last 7 sessions. Expectations for this week's crude oil inventory data point to a build of 1.0 to 1.5 million 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.
