CORN
Old crop corn export sales were a marketing year low at 92,100 MT and new crop came in at 77,700 MT. Meanwhile basis levels keep improving, so perhaps the reason for the low sales is the lack of grain. Forecasts are still less than ideal of IL, IN, and OH and the bulk of the rain in the forecasts seems to be headed to where they have been getting rain in NW IA and MN. The July corn made a strong move higher yesterday and is seeing follow through buying this morning, but the July contract has to clear $6.06 soon to give the bulls some hope.
WHEAT
The July KW keeps holding above support. Export sales were ok at 432,900 MT, that is nothing to get excited about, but at least it isn’t a bad number. The wheat is on the verge of another sharp break lower, but that has been the case for over a week, so if we don’t break the market soon the bears will get bored. $6.37 is still the key in the July KW.
SOYBEANS
The NOPA crush report was better than expected at 138.266 million and export sales were strong at 425,000 MT of old crop and 580,000 MT of new crop sales. Traders have been more concerned about better rain chances in the extended forecasts, so the good demand numbers haven’t helped the market much. The bulls will need to see the July soybeans climb back above the 50-day moving average at $14.23 this week to regain the upward momentum in the market.
LIVE CATTLE
Live cattle futures imploded on Wednesday, destroying daily chart patterns and prompting a few cash trades $3 lower than a week ago. The 200 point drop in live futures was a huge surprise to the market, dropping the June 500-600 below last weeks’ cash trade. Most asking prices remain near $122 in the south and $196+ up north. Overnight activity has been narrowly mixed, but we expect to see ready sellers on any rebound after the poor close on Wednesday. Beef exports were solid again this week at 15,700.
FEEDER CATTLE
Feeder cattle futures followed the fats lower on Wednesday, with all contract posting more than 200 point losses. Most of the weakness stems from the inability of the fats to move towards needed breakeven levels. At least one large operation had been leading the cash market higher over the past week or so. It appears to us that some of that aggressiveness is subsiding. Corn is firmer in overnight trade, but could get some pressure from very poor weekly export sales.
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.
