CORN
December corn dropped about 18 cents between 1am and 5am, which was quite a bit of movement for not much news. Most of the pressure can probably be tied to weakness in the wheat and a higher than expected Russian wheat production estimate. Other than that, news is limited. forecasts are still warm and mostly dry and the crop isn't improving. Analysts look for more two sided trade through the day.
WHEAT
The December KW still can't make it through $9.50. This week's pressure has the chart looking a little negative, but most likely the wheat will continue forming a wedge formation going into next week's Supply and Demand Report and the reaction to the report will determine the direction of the breakout. Fundamentals are still improving for the wheat market and next week's report should confirm that again, say analysts.
SOYBEANS
The soybeans failed to hold gains yesterday and have had further weakness overnight. The crop is still shrinking overall, but rain has helped some areas. The weak basis is bothersome, but keep in mind that low river levels will affect many of the bids. It wouldn't be a surprise to see the November soybeans fill the open gap at $16.12, say analysts, so keep an eye out for that.
LIVE CATTLE
Live Cattle futures closed under pressure on Tuesday, as traders looked to level out the ever expanding basis with the August contract. Overnight has been a two sided trade, with bull spreading a feature. Cash could take shape as early as today, with packers killing aggressively and show lists small. The two day sell off in corn could pressure deferred Live Cattle some. Technical indicators remain in a positive mode.
FEEDER CATTLE
Feeder Cattle futures settled moderately higher on Tuesday, supported by corn weakness and modest improvement in the cash trade. Overnight has been more of the same, as corn softens and feeders climb tentatively. We may well have set the seasonal lows in the Feeders in July, say analysts.
CRUDE OIL
September crude oil prices grinded higher during the initial morning hours, supported by a positive outside market tone and stabilizing Chinese economic data. A round of manufacturing data in China seemed to hint that their factory sector could be bottoming after recent declines, and that coupled with words of support from Chinese President Hu regarding more stimulus bolstered the demand outlook in that region. September crude oil prices took a sharp jump higher after private industry data Tuesday afternoon showed a much larger than expected crude oil inventory draw. Expectations for this morning's EIA report are for a draw in of around 1.0 million barrels, which compares to the five year average build for this week of the year of 1.4 million barrels. In addition to an active US economic calendar this morning the crude oil market also must contend with this afternoon's FOMC meeting decision.
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.
