CORN
The December corn got within 5 1/2 cents of the harvest low before turning around and posting a positive close. The reversal higher in an oversold market is a good indication that we are about to see a corrective rally, say analysts. It wouldn't be a surprise to see the December contract back at the bottom of the old trading range at around the $7.32 to $7.35 level this week. To do much more than that, we will need to see some kind of positive demand news and analysts are not counting on that at this time.
WHEAT
So far the December Kansas City Wheat has held at the lower end of the trading range. It will be dry in the bulk of the Hard Red Winter Wheat Belt for the next 2 weeks at least and we are still waiting for better export sales, so the news hasn't changed. Analysts say it is very likely that we will see the December Wheat drift back up to the $9.00 area and the 40 and 50 day moving averages simply based on short covering during the course of this week.
SOYBEANS
The soybeans finally stopped the freefall they had been in. Yesterday's solid close and the follow through buying overnight indicate we are in for a short covering rally according to analysts. The recent break will probably uncover fresh export demand the NOPA crush figure this morning was better than expected at 153.54 million bushels, so there is northing wrong with domestic demand. Analysts look for the January beans to start climbing back to the $15.00 level.
LIVE CATTLE
Live Cattle futures closed moderately higher on Tuesday, with continued strength in the beef market along with bullish estimates for Friday's On Feed Report lending support. bids and asking prices remain a good $4-$5 apart heading into midweek. Futures remain in a 4.00 trading range, with solid support under the 125.00 level in the December contract. Beef demand from the east coast is picking up, with prices and demand on the rise this week.
FEEDER CATTLE
Feeder Cattle futures closed mixed on Tuesday, with November falling along with cash, while deferred contracts traded steady to higher. Overnight activity was lower, with deferred months down as much as .65-.70 for the session. Corn prices have traded both sides of unchanged, with current prices near steady. Friday's placement number is expected to be 12-13% below year ago levels. This would be the 5th month in a row of lower placements.
CRUDE OIL
December crude oil registered a higher high during the initial morning hours, supported by an improvement in outside market sentiment and ideas that recent weakness might be overstated. While there was disappointing European Industrial Production data earlier this morning, ideas that Greece will meet near-term funding deadlines seemed to temper a major negative factor weighing on global oil demand prospects. Some traders suggested that the crude oil market was monitoring the US fiscal cliff debate in Washington for signs of clarity. Expectations for this week's EIA inventory report, to be released Thursday morning, are for a build in the range of 2.0 million barrels.
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.
