CORN
Crop condition ratings are expected to decline in this afternoon's report and forecasts for the week are not favorable, which means we should expect lower ratings next week as well. Friday's wild action will make traders nervous about chasing rallies, but it will be reasonable to expect a strong close today unless the forecast makes a major change at mid-day or the Euro falls apart. Analysts plan on another day of sideways trade.
WHEAT
Wheat futures are making a strong rebound, but haven't given an indication of a bottom. Indicators are oversold and yield reports aren't bearish, but we will have to see some stability in the financial markets in order to hold gains. Friday's low of $6.37 1/2 is critical support today. That is right between the 75 and 78% retracements and failure there will point to a move down to $6.09.
SOYBEANS
The July soybeans bounced off the 50% retracement of the entire move up Friday and are seeing follow through buying this morning. The market still hasn't done anything to break out of the downward trading channel or confirm a bottom. The bulls will need to see a close above $13.80 this week in the July contract to get that done.
LIVE CATTLE
Live Cattle futures closed moderately lower on Friday and narrowly mixed for the week. Cash trade should support the June into the delivery period, with the lead contract $4-$5 discount to week ago cash. Analysts expect to see June gain on deferred contracts over the near term. Outside markets had looked supportive early in the day.....however, that is subject to change. Weather appears to be good for grilling over a majority of the country.
FEEDER CATTLE
Feeder Cattle futures closed the week with losses of 1.20 in the lead August contract. Those losses, with corn off .24 during the same period, look a little shaky. Analysts see support starting to take hold as the futures and cash market have come much closer together. Overnight corn prices were posting triple digit gains, behind rumors of continued Chinese demand. Export demand continues to be a friend in the beef market as well.
CRUDE OIL
July crude oil prices came under pressure during the overnight and initial morning hours, weighed down by weak US jobs data last week and more signs of slowing economic growth in China. Brent crude oil fell to a new 16 month low as global oil demand concerns and growing risk aversion sparked further long liquidation. The Commitments of Traders Futures and Options report as of May 29th showed non-commercial traders were net long 233,409 contracts, a decrease of 7,196. Non-commercial and nonreportable traders combined held a net long position of 241,271 contracts, down 8,386 on the week. Some traders viewed the selling trend of the speculator as a negative near term force.
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.
