CORN
After about two weeks of trying, the December corn made it through $8.00. Rainfall was disappointing over the weekend and the forecasts are hot and dry. Crop condition ratings will decline this afternoon and next Monday as well. The crop is still shrinking, so prices must keep rising. The next objective for the December contract according to analysts is the $8.50 area.
WHEAT
The December KW is approaching the recent highs. The $9.57 area will be the key resistance level this week. A close above that level and traders will begin thinking about a move to $11.00, say analysts. All it would take is consistently large export sales to turn the wheat market into the leader instead of the follower. As long as corn is moving higher, wheat will also.
SOYBEANS
The November soybeans will be making a run at $17.00 this week. The beans, of course have all the same problems that the corn does, but has a better demand outlook. Analysts keep pointing out that soybeans can benefit from rain in August, but the problem is that it doesn't look like there is much rain in the forecast.
LIVE CATTLE
Live Cattle futures posted triple digit gains on Friday, gaining more than 2.00 in the front three trading months. The gains came in spite of lower cutouts and only minor strength in cash cattle trade. Open interest climbed 2,232 contracts on the day, suggesting new buying interest entering the market. Some late cash trade in the south moved to $115 on Friday, suggesting the short bought conditions that we believe exists. Option expiration for the August contract is on Friday, with deliveries a week from today.
FEEDER CATTLE
Feeder Cattle futures closed with triple digit gains on Friday, with weekly gains of more than 1.50 in the lead contracts. This morning's open should see some pressure, with new contract highs in corn seen in overnight trade. As tight as supplies are expected to be, cash trade could remain under pressure as corn continues to post all time record high prices. Open interest climbed on Friday's rally, suggesting new buyers entering the market at a premium to cash levels.
CRUDE OIL
September crude oil prices traded higher during the overnight session, supported by hopes that the ECB could pursue more aggressive action to lower borrowing costs in Spain and Italy. Some traders suggested that a measure of weakness in the Euro, relative to the US dollar suggests that there are some reservations in the market that central bankers might be unable to deliver on recent promises. Meanwhile, the crude oil market garners a measure of support from violence in Syria, with battles continuing in Aleppo. The Commitments of Traders Futures and Options report as of July 24th showed non-commercial traders were net long 232,243 contracts, an increase of 17,532. Non-commercial and nonreportable traders combined held a net long position of 231,778 contracts, for an increase of 24,757 in their net long positioning.
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.
