CORN
Yesterday the July corn closed above $6.00 and the 40 day moving average for the first time in about 3 weeks. Te $6.06 area is still strong resistance for the July contract and the bulls will need to see a close above that level soon to keep the upward momentum intact. Basis levels continue to firm despite the poor export sales, which is keeping the bull spreading active. Forecasts still suggest there will be good moisture in the NW Corn Belt, but the Eastern Corn Belt will not be so fortunate. Crop condition ratings will likely decline on Monday according to analysts.
WHEAT
The July KW is holding above the $6.37 support, but isn't showing enough strength to generate any short covering. The bulls really need to see a close above yesterday's high of $6.52 1/2 and the bears just need a new low for the move. The fundamental outlook is improving, but still not bullish enough to justify independent strength. If the wheat moves higher, it will probably be because the corn is moving higher.
SOYBEANS
The July soybeans completed a 50% retracement of the last move up yesterday and should be due for a bounce today according to analysts. Demand for US beans is very good in both the domestic and export markets. Basis levels are firm and weather is still less than ideal for much of the US and Chinese growing regions.
LIVE CATTLE
Live Cattle futures closed sharply lower for the second day in a row, as cash weakness and long liquidation out ran beef fundamentals. Cash trade of $119 in the south and $193 or less in the north were very disappointing to producers, with boxed beef prices setting record highs on Wednesday. Overnight activity had been narrowly mixed, with the combination of technical selling and short covering. The additional cow meat on the market over the past month is keeping tight fed supplies from the forefront.
FEEDER CATTLE
Feeder Cattle futures dropped more than 200 points for the second consecutive day on Thursday, driving technical indicators lower in spite of relative firm cash trade in the sale barns. Overnight trade was mixed, with corn trading steady to slightly lower as of early this morning. Some short covering could be seen going into the weekend, but rallies should find willing sellers.
CRUDE OIL
July crude oil prices traded higher in overnight and early morning action, registering a new four-day high in the process. A number of factors have come together in the crude oil market that have offered support, including yesterday's OPEC agreement to keep the cartel's production at 30 million barrels per day and ideas that central bankers were ready to offer more monetary stimulus if needed. OPEC's commitment to adhere to the 30 million barrel per day target is a bit lower than recent production levels near 31.5 million barrels per day. However, the wild card will be whether Saudi Arabia trims their record production pace in adherence to the target.
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.
