CORN
Expected crop condition rating declines and hot/dry weather in the forecasts has the corn market moving higher. Most of the interest is in the new crop due to potential production losses so bear spreaders are still active. It will be interesting to see if the combination of the narrower spread and the threat of production losses attracts fresh old crop export sales. Analysts say that until we see a weather change, there will be strength in the corn. The next objective for the December contract is $6.00.
WHEAT
The July KW is back to testing the $7.00 area. This marks the third time in three days that the market has been over $7.00, but the last two closes have been weak. A close over $7.00 would suggest that the market is headed to the May high of $7.30 according to analysts. For the moment, gains the corn will give gains to the wheat market.
SOYBEANS
The November soybeans finally moved through $14.00 after multiple attempts over many months. If the extended forecasts are accurate, then it will only be a matter of time until we see $15.00 according to analysts. The job of the market is to slow demand and make sure we don't have any further old crop export sales. We will soon find out what the Chinese are willing to pay for soybeans.
LIVE CATTLE
Live Cattle futures closed moderately higher on Friday and up .40 in the August for the week. Cash didn't fare near as well, with a drop of $2-$4 in all regions. Placement and marketing numbers had a negative twist on Friday, with a surprising number of over 800 pounds placed during May. Marketing totals of 101% fell well below trade expectations. Outside market influences are soft as well, with the Dollar higher and equities lower.
FEEDER CATTLE
Feeder Cattle futures closed modestly higher on Friday, but down 3.00 for the week in the August contract. Sharply higher corn in overnight trade should add to an already weak market. Cash trade remains a solid discount to futures, with index levels trading below 150.00 at week's end. Drought is bringing calves to market as well as strengthening corn values.
CRUDE OIL
August crude oil prices grinded higher during the Sunday evening trade but reversed course throughout the initial morning hours. It seemed that ongoing concerns over weakening global growth and European debt issues weighed on oil demand prospects. Fears over weakening demand took some of the focus away from Tropical Storm Debby in the Gulf of Mexico, which shuttered nearly 25% of oil and gas operations in the region. The Commitments of Traders Futures and Options report as of June 19th showed non-commercial traders were net long 192,059 contracts, a decrease of 8,943. Non-commercial and non reportable traders combined held a net long position of 198,111 contracts, for a decrease of 15,830 in their net long positioning.
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.
