CORN
The December corn fell to a new low for the move yesterday and again overnight, which will have traders talking about the potential for a move down to $5.75. The charts, without a doubt, still look negative according to analysts. Export sales were adequate and a little better than last week at 787,900 MT for the old crop and 25,000 MT for next year. China was listed as a buyer, which is encouraging, but we still aren't seeing the kind of really big sales numbers that get traders excited.
WHEAT
The December KW slipped below the $7.20 support at one point overnight, but finished the session in positive territory. We are going to have to find some buying interest quickly to avoid another wave down, perhaps production cuts in tomorrow's report will do the trick. Export sales were down from last week at 428,900 MT and this market really needed to see some consistently large sales.
SOYBEANS
The soybeans are still falling apart. The charts suggest that the November contract is headed to $11.86 according to analysts. Export sales were considered great at 1.03 MMT, which should help out. China was the big buyer, which isn't a surprise, but is very good to see since our export program in completely dependent on the Chinese. Analysts say plan on a choppy two sided trade today ahead of the reports.
LIVE CATTLE
Live Cattle futures closed mixed on Wednesday with early strength giving in to declining equities and a stronger Dollar. The positive vote from Germany overnight could allow for some more positive trade in equities and commodities. Cash trade is likely to remain quiet, unless packers raise their bid much closer to current asking prices. Bids remain near the $116 level, while feedlots are firm near the $120 and $190 levels.
FEEDER CATTLE
Feeder Cattle futures closed modestly higher on Wednesday, backing away from their morning highs, along with the fats. Weaker corn values and tight supplies of yearlings continue to support the feeders. With September expiring at days end, October takes over spot month with a considerable premium to the cash. With many other commodity markets faltering, analysts say use caution in jumping on the long side of this market.
CRUDE OIL
November crude oil prices reversed from their worst overnight levels, supported by a rally in global equity markets and gains in the Euro currency. The German Parliament approved changes in the Eurozone bailout fund earlier this morning, and some traders viewed that as a positive step toward resolving the European debt crisis. November crude oil managed to recoup some of the disappointment from yesterday's larger than expected EIA inventory build. EIA crude stocks rose 1.915 million barrels. They remained 16.897 million barrels below year ago levels but 12.842 million above the five year average. Crude oil imports for the week stood at 9.702 million barrels per day compared to 8.351 million barrels the previous week. The refinery operating rate slipped 0.5% to 87.8%, compared to 85.8% last year and the five year average of 84.01%. There were reports earlier this morning indicating that a key Singapore refinery had experienced another fire that has reduced capacity around 350,000 barrels per day.
There is substantial risk of loss to futures and options trading. Past performance is not indicative of future results.
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.
