CORN
December Corn finished unchanged at 592 1/2, 6 1/4 off the high and 20 1/4 up from the low. March Corn closed up 1/4 at 606. This was 20 up from the low and 6 1/4 off the high. December corn closed unchanged on the session but up more than 20 cents from the overnight lows. Macro economic worries plus weakness in the stock market and energy markets helped to pressure the market early in the session. In addition, traders still see active harvest this week and there is still talk that producer yield reports are coming in better than expected. Dry weather was experienced last week in the western corn belt and the Midwest looks dry and mostly sunny this week; nearly ideal for harvest. However, talk of the oversold condition of the market plus ideas that commercial end users and maybe even China could be bargain hunting over the near-term added to the positive tone into the mid-session with the market trading slightly higher on the day. Weekly export inspections came in at 28.4 million bushels which was below trade expectations. Weekly exports need to average 33.9 million bushels each week to reach the USDA projection. Traders will monitor the weekly crop progress reports for release after the close. The COT report showed a massive long liquidation sell-off for the week ending Tuesday and talk of the oversold condition of the market supported corn late despite continued weakness in the financial markets.
WHEAT
Kansas City wheat futures settled mixed, feeling pressure early from outside market influences but coming off of lows of the day on some short covering. Bearish USDA ending stocks reports for wheat on Friday led to heavy losses and some oversold market conditions. News that Greece failed to meet targets for deficit reduction initiated the early weakness in markets today and led to stronger values in the US Dollar. KC Wheat felt additional pressure from a forecast for rain in HRW wheat areas next weekend. Rain is also in the forecast for wheat areas of Australia.
SOYBEANS
November Soybeans finished down 1 1/2 at 1177 1/2, 12 1/4 off the high and 15 1/2 up from the low. January Soybeans closed down 3/4 at 1188 3/4. This was 15 3/4 up from the low and 11 1/4 off the high. December Soymeal closed down 1.6 at 307.0. This was 4.4 up from the low and 6.9 off the high. December Soybean Oil finished down 0.21 at 50, 0.2 off the high and 0.41 up from the low. November soybeans closed slightly lower on the session but well up from the lows. The market pushed sharply lower early in the session led by continued macro economic concerns but while the stock market fell to push the Dow down near 200 points on the day into the soybean close, the soybean market managed to hold onto part of the recovery bounce off of the overnight lows. The market followed outside market forces lower early in the session and traders also see active harvest selling pressures this week. However, a turn up in corn and wheat along with better price action for the US stock market plus talk of an oversold condition for the market after a $3 break off of the August 31st peak helped to support a short-covering rally into the mid-session. Soybeans moved to the lowest level since December 1st before trading higher on the day into the mid-session. Ideas that China crush margins have turned favorable and that China buyers might get active after the recent sharp break helped to support. Weekly export inspections came in at 10.59 million bushels which was about as expected. Weekly exports need to average 28.4 million bushels each week to reach the USDA projection. Brazil exported 2.8 million tonnes of soybeans in September as compared with 2.0 million last year.
COTTON
Cotton futures finished lower Monday, remaining within the technically watched trading boundaries of the outside-range reversal to the upside of last Thursday. Benchmark December settled off 98 points at 99.21 cents, slightly below the midpoint of its 240-point range from up 46 points at 100.65 cents to down 194 points at 98.25 cents. March closed off 82 points at 96.60 cents. Despite positive U.S. economic data, concerns that slowing global growth prospects could hurt demand kept the market on the defensive, an analyst said. Dollar strength contributed to negative sentiment. Volume dipped to an estimated 17,800 lots from 18,981 lots the previous session when spreads accounted for 4,868 lots or 26 percent, EFP for 3,447 lots and EFS for 941 lots. Options open interest totaled about 1,800 calls and
3,100 puts. A U.S. agricultural attache report released last week estimated Turkey's 2011 cotton crop at 2.984 million bales, up 41 percent from the post's estimate of 2.11 million bales last season. Total imports are expected to decline to 2.525 million bales from 3.35
million in 2010-11, the attache said, with those from the United States dropping to 1.75 million bales from 2.2 million. Increased production and a projected decline in domestic consumption are expected to result in decreased imports, the report said. Consumption is
estimated at 5.415 million bales, down from 5.6 million last season. The attache forecast imports from the United States at 1.745 million bales, down from the post's estimate of 2.2 million in 2010-11. Of the total imports through the first 11 months of 2010-11, the United States sup-plied 64 percent, the attache said. Reports from attaches are not official USDA data. The USDA last month estimated Turkey's crop at 2.9 million bales, domestic use at 5.8 million and imports at 3.1 million. These compared with a month earlier were unchanged,
down 100,000 bales and down 300,000 bales, respectively. Turkey through Sept. 22 had booked 790,000 statistical bales of U.S. cotton
for delivery this season or 11 percent of export sales to all destinations. This was second only to China's 2.305 million bales or 32 percent and ahead of third place Mexico's 694,000 bales or 10 percent.
CATTLE COMPLEX
Even with a break in the stock market and a near 200 point drop in the down into the close, the cattle market managed to see a strong close. The market opened slightly higher on the session even though there was a negative tone for commodity markets due to macro economic concerns. The market saw further buying into the mid-session due to less bearish forces from outside markets with October cattle up nearly 100 points on the session and moving to the highest level since April 20th. The market found support from talk of the strong cash market last week and ideas that supply will continue to tighten just ahead. Boxed-beef cut-out values at mid-session came in at $183.31 which was up $.82 from Friday but down from $184.17 last week at this time. Rising open interest is seen as a positive force and is different than what is being seen in most agricultural markets.
LEAN HOGS
The market consolidated most of last week's gains but closed slightly lower after first reaching a new higher for the move which is seen as a short-term negative technical development. The market saw some early support to post a new high for the move but futures drifted back to lower on the day into the mid-session. Talk that the market is a bit overbought after the recent surge higher and ideas that slaughter supply will remain ample over the near-term helped to limit the advance. In addition, the market sees the premium of futures to the cash market at this time of the year as a limiting force. Early support emerged from a positive tone to the cash markets this morning with Midwest hogs trading steady to $2.00 higher for the session. Slaughter came in at a hefty 430,000 head compared with 419,000 last year.
CRUDE OIL
November crude oil prices were under pressure throughout the session and plunged to their lowest level since August 9th. Early weakness was attributed to fresh European debt concerns on reports that Greece would be unable to meet deficit targets. However, a round of better-than-expected US economic readings on Manufacturing and Construction Spending helped to turn the tide. There was also some talk that a mid-session rebound in Brent crude oil may have contributed a round of short-covering. However, as the day unfolded fears that Greece may default on its debt appeared to offset gains from positive US economic data. There were also comments from Libya's interim government indicating that oil production was improving at a faster than expected rate, and was expected to reach full capacity by 2013.
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.
