CORN
The July corn is still holding above the 62% retracement of the last move up and looks set for another day of consolidation trade. There is more talk of Chinese corn purchases and the basis at the Gulf continues to improve, which should keep the old crop corn supported. A fast planting pace and expected rain is keeping the new crop from moving higher. Analysts say plan on a two sided trade today.
WHEAT
The wheat showed some signs of life yesterday, but don't plan on it lasting long. The market is oversold and due for a bounce, but otherwise this market is faced with good production potential and demand that won't be good enough to keep stocks from building. The wheat has to see strength in the corn to keep wheat in the feed mix and to keep the market supported.
SOYBEANS
The July soybeans have gone a couple of days without making new high for the move, so the market is probably due to make one today. Chinese demand is strong and we still have concern about new crop stocks. It will be hard to hold this market back when USDA is probably overstating old crop stocks and new crop will end up at pipeline levels.
LIVE CATTLE
Live Cattle futures closed sharply higher on Thursday, with April posting near limit gains. Cash traded as high as $124 in the north, with many cattle scheduled for immediate pickup. Packers appear to be short bought, with fewer captive supplies available for the next two weeks. Overnight trade was trending lower, with equities lower and the Dollar stronger. We look for pullbacks to be well supported, with weights falling rapidly and show lists remaining historically tight.
FEEDER CATTLE
Feeder Cattle futures were led higher on Thursday by the limit move in August futures. Cash index levels actually dropped on the day, but should trend higher in coming days. Expectations of a very low placement number for March in next weeks' report, along with concerns that yearlings will remain tight over the next several months are fueling the fresh short covering and new long speculation. Overnight trade was narrowly mixed, with corn slightly higher in old crop contracts.
CRUDE OIL
May crude oil prices traded lower throughout the overnight and early morning hours, weighed down by Chinese growth figures that came in short of expectations and fresh debt concerns in Europe. While first-quarter GDP figures in China came in weaker than expected, they were still above 8.0% and appeared to boost the odds that their Central Bank will take a more aggressive stance in stimulating growth. Meanwhile, March crude oil demand in China was estimated to have pulled back to October levels, but it still showed positive growth from year ago levels. Comments out of Saudi Arabia this morning reiterated the country's commitment to reduce the price of crude oil through their relationship with other OPEC members. However, the crude oil market is expected to turn its focus to this weekend's talks between Iran and six-nations in Turkey.
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.
