CORN
Export sales were poor again at 192,900 MT of old crop and 99,900 MT of new crop sales. Fortunately traders are looking at the weather and not export sales. The December contract traded above, but did not close above the $6.50 level yesterday. Plan on a test of yesterday's highs at some point today and further gains as long as the crop is still deteriorating.
WHEAT
Wheat export sales weren't good at 324,500 MT. The numbers have to be better than that for the wheat to show any independent strength. On the chart the July contract is still struggling with the $7.40-$7.50 resistance and I look for more of the same today. Spread trade will keep the wheat in check until we see consistently large export sales.
SOYBEANS
The soybeans have made two poor closes in a row following Monday's surge higher. Export sales were solid at 403,900 MT of old crop and 389,000 MT of new crop sales. The market will need to slow demand more than this if we don't see heavy rain in the Corn Belt soon. Analysts look for another day of consolidation as both buyers and sellers will be nervous about tomorrow's tocks and acreage numbers.
LIVE CATTLE
Live Cattle futures closed sharply higher on Wednesday, reversing early weakness and scoring solid technical support on the rally. Boxed beef prices remain strong, with all time highs for choice within reach. Overnight saw followup buying in the fats, in spite of the weaker equities and slightly firmer Dollar. Weekly export sales on beef were impressive at 18,400 MT. Analysts say they believe the seasonal low may be in process of being carved out.
FEEDER CATTLE
Feeder Cattle futures scored a sharp reversal on Wednesday, trading more than 4.00 off of lows for the move posted in the morning. Feeders dropped some of their gains in the closing hour and again overnight, but support appears to be present as fats push higher. Corn prices are modestly higher in early morning activity, with weather remaining a negative factor for feeders.
CRUDE OIL
August crude oil prices waffled between gains and losses throughout the initial morning hours, amid uncertainty ahead of the EU summit and slowing global growth prospects. The outside market tone provided a modest drag for the crude oil, with global equity markets weaker and slight gains in the US dollar. Additionally, slowing growth concerns have offset concerns that North Sea supplies have come under added strain from an oil worker strike in Norway. August crude oil prices climbed to a new four day high in response to yesterday's EIA data that showed an inventory decline of 133,000 barrels last week. EIA crude stocks are 27.697 million barrels above year ago levels and 41.847 million barrels above the five year average. Crude oil imports for the week stood at 9.118 million barrels per day compared to 9.445 million barrels the previous week. The refinery operating rate was up 0.7% to 92.6%, which compares to 88.1% last year and the five year average of 88.55%.
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.
