CORN
Once again the corn bounced in overnight trade following a poor close in the day session. Despite all the recent sales announcements, the corn cannot hold gains. Traders are more concerned with what USDA will print for a new crop yield because of the early planting pace, despite the fact that there isn't a very good correlation between early planting and final yield. Export ales were adequate at 645,600 MT of old crop and 180,600 MT of new crop ales. Analysts are anticipating next week's totals to be very large. Plan on another two sided session.
WHEAT
Wheat export sales were good at 386,700 MT of old crop and 357,300 MT of new crop sales. If shipments would improve a little, USDA might have to raise the old crop wheat export estimate. there i still nothing that suggests the wheat will do anything but follow the corn. Analysts expect to see another day of consolidation trade.
SOYBEANS
Export sales were great at 926,200 MT of old crop and 483,000 MT of new crop sales. USDA is clearly under estimating soybean exports. At this week's pace we will meet the current sales estimate in two weeks, but we have over 4 months left in the crop year. The soybean market is seeing some corrective activity, but analysts say breaks are a buying opportunity.
LIVE CATTLE
Live Cattle futures rebounded from Tuesday's limit lower closes, posting a moderate recovery effort, as the world sorts out the significance of the latest BSE case. None of the major importers of US beef are changing their stance on imports. Likely the strongest slap will come from closer scrutiny on the imported goods. Cash trade remains lightly tested for the week, with most asking prices well above current April contract prices. With the week's kill running 21,000 ahead of a week ago, packers could need to become more aggressive in their purchasing efforts. Outside market influences are mixed coming into this morning.
FEEDER CATTLE
Most Feeder Cattle contracts recovered about a third of Tuesday's limit losses on Wednesday. Softer corn values and the inability of the sellers to push fats to new lows gave support to the Feeders. Overnight action saw continued strength in the market with gains of as much as .55 posted as of this morning. Cash levels backed off sharply for about 24 hours, as the market sorted through the BSE news. By midday on Wednesday, country sales were showing solid recovery from the day before.
CRUDE OIL
June crude oil prices traded fractionally lower during the early morning hours. It appears that the crude oil market is in the process of reconciling the recent boost in US supplies, softer European sentiment readings and further weakness in the US dollar. Some of the late day push in the crude oil market appeared to come in the wake of comments from Federal Reserve Chairman Ben Bernanke that reaffirmed the central bank's low interest rate commitment and prospect to offer more support if warranted. However, this morning's weaker than expected reading on European sentiment and rising bond yields in Italy have sparked an air of caution regarding the global economic recovery. The crude oil market sold off sharply in response to yesterday's EIA inventory data that showed the fifth consecutive weekly inventory build. This has brought current crude stocks to 373.024 million barrels, which is the highest for this week since 2009.
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.
