CORN
Crop condition ratings declined to 63% Good to Excellent, which is now well below average and makes the current yield estimate of 166 looks way too high according to analysts. Bear spreading has been active due to the buying interest in the new crop. The December contract is back above the 50 day moving average and is headed for a test of the $5.50 resistance. Analysts say a close above $5.50 will have traders looking for a move up to $6.00.
WHEAT
The technical outlook of the July KW is vastly improved after yesterday's action. The market is now trading above the 50 dy moving average and trend line resistance. The next major resistance lies at the $6.70 level. Strength in the corn is definitely helping the wheat market move higher. All this market needs is a better export demand to start the bull market.
SOYBEANS
Soybean conditions declined to 56% Good to Excellent. The weather will have to improve very soon in order to reach USDA's record high yield estimate. There is a great deal of concern regarding new crop production potential and extremely tight supplies next summer. The job of the market is to slow demand until crop conditions stabilize. November beans are headed for a test of $14.00 according to analysts.
LIVE CATTLE
Live Cattle futures finished sharply higher on Monday, with June and August posting triple digit gains. The rally came in spite of a higher Dollar and lower equities. Overnight, the outside markets looked more supportive, with the Dollar weaker and equities firming. Fats are trading mostly firm, with the exception being the June. Strength in corn futures could prompt new buying into the deferred live cattle. Watch technical indicators closely for turn signals.
FEEDER CATTLE
Feeder Cattle futures closed moderately higher on Monday, anchored somewhat by the strength in corn futures. Overnight, corn prices are up, pressuring feeders to as much as .65 lower in early trade. The weather market is negative to feeders in two respects. Dryness is forcing corn higher and calves into feedlots earlier than desired. Key support for the August contract is seen at 154.65.
CRUDE OIL
August crude oil prices traded lower throughout the overnight and early morning hours but were able to turn positive heading into the US opening. It is possible that reports that G-20 leaders were boosting IMF's funding, along with hopes that further stimulus could come from a two day FOMC meeting and potential interest rate cut by the ECB has offered a modest lift to crude oil. August Brent crude oil registered a new 17 month low this morning, and it too has been able to climb back into positive territory. It is also possible that slow progress in talks between world powers over Iran's nuclear program in Moscow have presented a measure of support to the crude oil market. Negotiations over easing sanctions on Iran made little progress yesterday and seemed to come with tough language.
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.
