CORN
Corn export sales were poor, which was expected with 178,400 MT of old crop and 23,000 MT of new crop sales. Demand is obviously suffering, but at this point we still don't know how much demand we have to shut off. There are more and more yield estimates coming in below 130, which would require a great deal of demand destruction. Analysts plan on another day of directionless trade with a wide trading range.
WHEAT
Wheat export sales were good at 516,200 MT. Two of the past three weeks have been solid and considering how much wheat we will need to feed,the market needs to keep exports slow. On the charts, it still looks like the December KW is set up to trade sideways until next week's Supply and Demand Report, so plan on directionless trade today.
SOYBEANS
Soybean export sales were great for the old crop at 194,000 MT, but a little slow on the new crop at only 52,400 MT. Soybean meal sales were good, however, overall demand wasn't too bad. On the charts, the November soybeans filled the open chart gap at $16.12, but it doesn't look like the market is done heading lower. $15.90 is a likely downside target for today according to analysts as traders wait for next week's report and watch the volatility in the financial markets.
LIVE CATTLE
Live Cattle futures closed mixed on Wednesday, with August higher and deferred contracts moderately lower. Bull spreading was a feature as the market awaits the bulk of cash trade. With August trading at 119.00 on the close, feedlots appear firm in their higher asking prices. Dollar weakness and equity strength this morning should lend support to the fats. Weekly beef exports remained solid, with 15,800 MT sold.
FEEDER CATTLE
Feeder Cattle futures closed higher on Wednesday, with August posting triple digit gains and climbing to a 5.00 premium to the cash index. Overnight corn prices have traded both sides of unchanged in a .15 range. Analysts say feeder bias is definitely turning more positive in spite of the corn values. Producers are beginning to see firming prices in the country and more interest out of the large feedlots.
CRUDE OIL
September crude oil prices traded on a higher track during the initial morning hours, supported by hopes that the ECB would follow on recent promises. Other supportive forces in the crude oil market came on expectations for reduced North Sea production in September ahead of maintenance. Some traders viewed yesterday's EIA data as a positive, with an crude oil inventory draw of 6.522 million barrels. EIA crude stocks are 18.611 million barrels above year ago levels and 33.641 million barrels above the five year average. One of the factors behind the unexpectedly larger draw came from a significant drop in import activity to 8.406 million barrels per day compared to 9.633 million barrels the previous week. The refinery operating rate was down 0.8% to 92.2%, which compares to 89.30% last year and the five year average of 88.65%.
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.
