CORN
Export sales were not good. Net cancellations for old crop and new crop indicate that the higher prices are slowing demand. right now the job of the market is to slow demand and it is working. The crop is still shrinking. so we still don't know how much demand needs to be slowed, but if we don't have some decent export sales soon, the market should head lower.
WHEAT
Wheat export sales were a little light at 367,000 MT. Sales will need to be larger than that for the wheat to do more than just follow the corn. The $9.50 area will remain a key resistance level for the December KW. There is a good chance we test that again today or tomorrow, say analysts. The new crop July is at a big discount to the old crop and it will be interesting to see how long that will last with the dry conditions in the Hard Red Winter Wheat Belt.
SOYBEANS
Soybean export sales were good at 193,200 MT of old crop and 517,000 of new crop sales. USDA is still underestimating old crop export sales and the market needs to slow the new crop sales, because the crop is going to be short. The big advantage the soybean market has over the corn is that demand has not slowed nearly as much.
LIVE CATTLE
Live Cattle futures closed moderately lower on Wednesday, as the market tightened the gap between cash and front end futures. Weakness developing in the Dollar this morning could be enough to support futures into this week's cash trade. The Dollar has dropped 130 points in two days, providing support for all exportable commodities. Cash is expected to develop $1-$2 higher than week ago levels, as early as this morning.
FEEDER CATTLE
Feeder Cattle futures closed sharply lower on Wednesday, as the premium to cash is still too high. Until the prospects of lower corn prices or much higher fats develop, feeders are expected to struggle. Corn values have traded both sides of unchanged, but appear to range bound after the recent windfall movement.
CRUDE OIL
September crude oil prices rallied from negative territory this morning, supported by comments from the European Central Bank president indicating that they would do "whatever it takes" to support the euro. This offered a big boost in global commodity and equity markets, while pushing the US dollar down to a new five session low. September crude oil registered its high of the day late yesterday, helped by mounting Middle East tensions, as well as growing prospects that world central bank's could be closer to extending more monetary support. September crude oil prices came under heavy selling pressure yesterday in response to EIA inventory data that showed a large and unexpected build in US crude stocks of 2.717 million barrels. EIA crude stocks are 26.083 million barrels above year ago levels and 39.626 million barrels above the five year average. Crude oil imports for the week stood at 9.633 million barrels per day compared to 8.937 million barrels the previous week. The refinery operating rate was up 1.0% to 93.0%, compared to 88.3% last year and the five year average of 88.85%.
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.
