Corn
Corn futures are called steady to higher this morning. Old crop corn prices have been range bound for the past three weeks. Concerns about export competition continue to circulate, mostly vs. feed wheat. Fund money flows are still a major variable, and very much influenced by the value of the US dollar on a day to day basis. The dollar is slightly higher this morning. They have been consistent about buying feeder cattle and gasoline, but less so corn and wheat. Chinese futures were down 6 cents. Globex spot corn was up a penny and new crop was up 1/2 cent overnight.
Soybeans
Soybean futures are expected to start the day session 5 to 7 cents higher. They closed higher again on Tuesday. The NOPA report showed January crush at 142.8 million bushels compared to 144.6 million a year ago. Meal exports are substantially behind a year ago and soybean oil stocks are a billion pounds below a year ago. They did rise 40 million pounds from the previous month. Private exporters announced the sale of 215,000 MT of soybeans for 2011/12 delivery and 68,000 MT for 201/13 delivery to unknown destinations on Tuesday, which supported the complex. Oil World cut their 2012 soybean forecast for Brazil 69.5 MMT and dropped Paraguay by 1.4 MMT to only 4.6 MMT. Oil World raised the Argentine forecast by 1/2 MMT to 47 MMT on beneficial rains at a critical point in the growing season. That is still 1 MMT below the February USDA estimate. Chinese futures were down 8 cents and Globex was up 7 1/2 cents on the spot contract and up 2 cents on new crop.
Wheat
Wheat futures are called 2 to 4 cents higher this morning. Prices were down Tuesday after ABARE raised their estimate for the just harvested Australian crop to a record 29.5 MMT. USDA had projected the Australian wheat crop at 28.3 MMT on the February WASDE report. The USDA in the February WASDE report had increased Global wheat ending stocks 3.08 MMT from the January report to 213.10 MMT, exceeding the 2009/10 record. The Ukraine Farm Ministry said the 3 million hectares of damaged winter wheat could be reseeded as spring wheat in the upcoming season. Texas crop ratings this week were 29% good/ex and 40% poor/VP, still better than last year. Globex prices were 3 cents higher for SRW and HRW and 1 1/2 cents higher for HRS wheat.
Cattle
Live Cattle are called higher on the open by 20 to 30 cents after trading at record highs for a front month futures contract yesterday. Feeder cattle also made a new record high on the weekly continuation chart which plots the spot month until expiration. Cattle slaughter is estimated at 610,000 for this week which would be well below 639,000 head a year ago. Asking prices in Nebraska are $125 to $127 this week. Texas is asking for $127 to $128 and Kansas asking prices are mostly $127 this week. The October Cattle crush is the only month showing a break even today, all other months for 2012 show a loss for cattle placed during that time period. Wholesale beef prices were higher again on Tuesday, up $0.73 for Choice and up $0.62 for Select.
Hogs
Lean Hogs futures are expected to start the day session mixed. April closed at $2.50 premium to the February after Feb expired, leaving a gap on the daily continuation chart. Such gaps are not uncommon for hogs. The Lean Hog Index is at 87.46 down 0.20. Cash hogs in IA/MN were $0.51 lower, $0.76 lower in the WCB and $1.21 lower in the ECB. Pork trading was slow to moderate with light to moderate demand and offerings. The Carcass cutout was higher, however, on 126.50 loads.
Cotton
Cotton futures are trading 35 points higher. Certificated stocks were 111,458 bales with 9,094 awaiting review on February 13th. The Cotlook A Index was up 0.50 at 100.25 cents/pound. Futures delivery notices begin on the 23rd. The USDA projects the U.S. will remain the number one exporter of cotton over the next decade. India, the second major cotton exporter in the world shipped 4.4 million 170 kg bales in the current marketing year that began in October. China took almost 90% of those exports. Foreign traders were concerned cotton demand would shrink with slowed economic growth in Europe. U.S. retail sales rose less than expected in January; the apparel portion of the report remains flat as it has in the past several months.
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.
