CORN
Limits in the corn are now 60 cents for today's trade thanks to yesterday's limit higher close. Crop conditions declined more than expected to 56% Good to Excellent and the forecasts are still threatening, so further gains are expected today. Bear spreading is still active since the excitement is all in the new crop right now. The next upside objectives according to the analysts are the $6.20 and $6.75 areas.
WHEAT
The July KW reached the upper end of the past 8 months trading range due in large part to the strength in the corn market. It will take further gains in the corn and probably some decent demand news to get the July KW to close above $7.50. Analysts look for the wheat to be the short leg of spreads since the bullish news is in the corn and soybeans markets. Analysts plan on a two sided consolidation trade.
SOYBEANS
Yesterday, the November soybeans drove through the $14.00 resistance, which makes a move to $15.00 the next upside objective according to analysts. Crop conditions declined to 53% Good to Excellent, which is the lowest level since 1988 for this week in history. Obviously the beans are in need of rain, but there just isn't much in the forecast at this time. The job of the market is to slow demand. Any old crop export sales would be considered exceptionally bullish say analysts.
LIVE CATTLE
Live Cattle futures closed lower on Monday, with most contracts off between .75 and 1.00 at the close. New selling appeared to be a feature, with open interest rising more than 1,600 contracts. Overnight activity had been thin, with August both sides of unchanged in a narrow .20 range. Cutouts remain fairly stable, with packer margins at their widest levels in months.
FEEDER CATTLE
Feeder Cattle futures felt the pressure of limit gains in corn futures on Monday, with a limit lower move of their own. Pressure continued in overnight trade, with an additional loss of more than .70 as we write. Corn prices have risen another 12-14 cents and have expanded limits today. Oversold conditions in the feeders could promote some rebound, but any recovery will find willing sellers.
CRUDE OIL
August crude oil prices took a slightly higher track during the initial morning hours, helped by a modest lift in outside market sentiment and expectations that week's EIA inventory report will show a draw. August Brent crude oil broke out to a new three day high during the initial morning hours, supported by a modest level of short-covering, as well as expectations that US crude oil inventories drew down last week. The crude oil market also appears to be getting a modest lift from rising tensions in Syria. Meanwhile, the supply situation looks more than ample given soft economic data that continues to weigh on demand prospects and as Saudi Arabia continues their active production pace.
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.
