CORN
As expected, crop condition ratings declined another 5 points to 26% Good to Excellent. Judging by the forecasts ratings in Iowa, Illinois, Missouri, Nebraska, Kansas and South Dakota will decline sharply again next week, say analysts. On the charts, yesterday's outside day down is bothersome and the follow through weakness is not a surprise. The first support the market will find is at yesterday's low of 7.67 1/4, but keep in mind that the 38% retracement of this move up is way down at $6.90. The crop is still shrinking, so the trend should remain higher but corrections do happen.
WHEAT
The December KW has stalled out at the $9.50 area and looks like it could be heading down to the $8.50 level. Unless we see a huge export sales report on Thursday, as long as we are seeing pressure in the corn, we will see pressure in the wheat. Long term, analysts say we have to look at breaks in the wheat market as a buying opportunity since the reduction in corn production will result in much higher wheat feed usage and very tight ending stocks. Wheat could be explosive this spring especially if the weather in the HRW Belt doesn't improve.
SOYBEANS
Overnight, the November soybeans tested the open chart gap at $15.68. That support has held so far and the market made a significant bounce of the overnight low. Crop condition ratings only dropped 3 points to 31% Good to Excellent, which was a little disappointing and added to the overnight pressure. The overnight low will be solid support, but the 38% retracement lies at $15.22 if it fails.
LIVE CATTLE
Live Cattle futures closed moderately higher on Monday, as traders were fresh buyers of the premium to cash to begin the week. Continued support is expected on pullbacks in this market. Longer term fundamentals and technicals are pointing to strength down the road. Boxed beef movement was very active for a Monday, as retailers have started appreciating the recent fall in price. Outside market fundamentals remain negative, with the Dollar firm and Equities soft.
FEEDER CATTLE
Feeder Cattle futures closed moderately lower on Monday, in spite of the lower corn trade. Cash weakness is seen, as buyers remain shell shocked by the gains in corn and the recent horrific closeouts in the feedlots. Feeders are expected to continue to struggle, although today could favor some recovery, with corn off double digits once again.
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.
