CORN
Corn condition ratings were better than expected and unchanged at 72% Good to Excellent. forecasts still suggest that a decline in ratings is likely next week. Basis levels are firming again, which suggests we will see more bull spreading in the next several sessions. The big concern of the day will be the outside markets. Strength in the Dollar could weigh on the corn today, so look for two sided traded and yet another consolidation session. Key resistance in the December contract lies at the $5.28-$5.32 area according to analysts and they say a close above that this week would be very bullish.
WHEAT
The July KW is trying to form a bottom. Step one was not making a new low yesterday and step two will be a close above $6.60 today, so the market still has some work to do. Yield reports are still disappointing in much of Kansas, which is supportive, and the lack of weakness in the corn takes away selling pressure from the wheat as well. The supply side of the equation is getting more bullish due to production problems, but we still need to see consistent, large export sales for this market to really get going.
SOYBEANS
The July soybeans made up for yesterday's weakness in overnight trade. Crop condition ratings were not impressive at 65% Good to Excellent, so there isn't a lot of confidence in a record yield right now. The bean market is still stuck in a downward channel and it would take a close above $13.80 in July today to get out of it so analysts say the technicals don't look as bullish as the fundamentals right now.
LIVE CATTLE
Live Cattle futures closed moderately higher on Monday, as weaker US Dollar values combined with higher packer margins to provide support. Traders continued to buy in overnight trade, in spite of a firmer Dollar. June's discount to cash trade should provide underlying support until basis levels narrow. Short and longer term moving averages have turned higher, initiating further technical support. Open interest was up on the Monday rally.
FEEDER CATTLE
Feeder Cattle futures closed sharply higher on Monday, osting triple digit gains in spite of the strong day in corn futures. Rains in the grass lands of Texas, Oklahoma and Kansas over the weekend added fundamental support to a technically stronger market. Overnight trade continued to firm, led by the active August contract gaining .50 as we write. Corn prices are firmer as well, with ag markets bucking the overnight Dollar strength.
CRUDE OIL
July crude oil prices were higher during the initial morning hours and registered a higher high in the process. Meanwhile, outside market sentiment seemed to back track after European service sector data continued to show contraction and in front of a G-7 conference call to discuss the European debt crisis. Equity markets in Europe and the US turned lower and the US dollar rallied against the Euro currency. The uncertainty and soft European economic data have weighed on global oil demand prospects. That tone was also echoed by the IEA earlier this morning, indicating that the recent downdraft in crude oil prices might indicate that 2012 global oil demand growth could be weaker than originally expected.
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.
