CORN
As expected, corn export sales were horrible at 142,300 MT. There is still optimism that exports will improve soon since the rest of the world is running out of corn. Basis levels continue to firm around the country, which means the market is trying to keep the corn here in the US. Analysts point out that the fact that supplies continue to be tight. Trend line support comes in right at the $7.50 level today. Analysts believe that level should be tested today at some point.
WHEAT
Wheat export sales were much improved from recent weeks at 572,000 MT, which is on track with what we need to see each week to meet expectations. The December Kansas City Wheat is testing the upper end of the trading range and and analysts say it will probably take more good export news and probably some strength in the corn to get the market to move out of the top of the range. Additionally, they say that a close above $9.50 in the December KC Wheat would be very bullish.
SOYBEANS
Export sales were considered very good again at 522,200 MT. Meal sales were very good as well. We certainly have no lack of demand. There is a fear of a higher production estimate and we do have option expiration tomorrow, which will keep the market subdued for a couple of days. The charts are improving, say analysts with the market reflecting a good string of positive closes and higher highs. $16.25 still looks like a logical objective according to analysts.
LIVE CATTLE
Live Cattle futures closed modestly higher on Wednesday, as traders continue to wait for this week's cash market to develop. Overnight activity was much the same, with the front end slightly firmer and deferred contracts steady to lower. Packers appear to be short bought, cold storage is lower and Japanese markets are ready to open for 30 month old slaughter animals. Cash asking prices of $120-$130 in the south and $200-$202 in the north as well above midweek bids. It is expected that cash trade will not take place until Friday.
FEEDER CATTLE
Feeder Cattle futures closed positive on Wednesday, supported by modest short covering and a flat close in corn futures. Overnight trade is quietly two sided, with corn trading both sides of unchanged. Single day cash index figures spiked to 150+ on Wednesday, which is a good 4.00 above the 7 day index average. Cash will be watched closely in the coming days to see if the trend continues.
CRUDE OIL
December crude oil prices trended higher during the initial morning, supported by a lift in outside market sentiment and measure of bargain hunting. The macroeconomic tone gained support on reports that Japan could unveil a new round of stimulus at next week's policy meeting, better than expected gains in Chinese factory output and a surprisingly strong UK Q3 growth reading. Some traders also indicated that the market was looking toward this morning's US economic report on September Durable Goods to show significant improvement from last month's reading, offering hopes for a rebound of US growth in the third-quarter. Other supportive features in the crude oil market this morning include the delayed restart of the North Sea Buzzard oil field and comments from Iran's oil minister indicating that the country planned to reduce oil export flow in the coming months. December crude oil prices managed to recoup all of the losses seen after a surprisingly large EIA inventory build of 5.896 million barrels. EIA crude stocks are 37.492 million barrels above year ago levels and 41.477 million barrels above the five year average. Part of the larger than expected build came from a boost in crude oil imports for the week, which stood at 8.823 million barrels per day compared to 8.347 million barrels the previous week. The refinery operating rate was down 0.2% to 87.2%, compared to 84.8% last year and the five year average of 84.35%.
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.
