CORN
The corn market didn't see follow through selling overnight despite yesterday's poor close. The $7.80 area has held the market for quite a while and there is still fear of smaller production estimates in the futures and lower prices will only increase demand. We have not seen many "better than expected" comments this year which will keep fears of lower yields alive. Analysts plan on a retest of yesterday's low at some point today or tomorrow. If it holds again, they anticipate that the market will grind sideways/higher once again.
WHEAT
The wheat market is still stuck in sideways pattern. The December KW broke out of the top of the wedge formation Friday and bottom on Monday. There was no follow through selling overnight, which is just another indication that this market is not going to pick a direction. Analysts look for the December KC Wheat to stay within 30 cents of the $9.20 level for a few more days.
SOYBEANS
Crop condition ratings improved slightly to 30% Good to Excellent, which will keep analysts thinking that the recent weather has stabilized the crop. At the same time, demand has been excellent and we really can't stand to have good demand with the current supply situation. Analysts plan on the November soybeans staying in the $16.00 - $16.50 area until the news changes. Looking for a sideways trade.
LIVE CATTLE
Live Cattle futures closed moderately to sharply higher on Monday, led by gains of 1.22 in the August contract. Boxed beef prices continue to support the market, along with smaller show lists being reported in all regions. The pattern in the December cattle since late June has been one of higher highs and lower lows. There doesn't seem to be any near term reason for that to change. Outside markets are supportive overnight, with higher equities and a modestly lower Dollar.
FEEDER CATTLE
Feeder Cattle futures posted big gains on Monday, with September closing a nickel off of limit levels. The strength in the Feeders is a result of improved cash and stuttering corn prices. Short term chart patterns have turned higher after Monday's action, say analysts. Corn prices were firmer in overnight trade, which may cap rally efforts in the Feeders. Analysts say charts would suggest good support should be found on any reasonable sell off.
CRUDE OIL
September crude oil prices took on a higher track during the early morning session, supported by gains in global equity markets and early expectations for a drop in weekly US crude supplies. Second quarter GDP data in Germany and France came in slightly better than expected, and that was a positive for risk-taking sentiment. Another data point that showed German sentiment weaker than expected was interpreted as a positive and bolstered the case for more monetary stimulus. Meanwhile, the crude oil market has a number of supply-side factors that appear to be offering support, including Middle East tensions, expectations for a significant drop in North Sea output in September and hopes for more central bank monetary stimulus.
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.
