CORN
The March corn continues to trade above the 40 and 50 day moving averages on the charts. There is still no fresh news for the market to absorb. Analysts anticipate that there will be no changes in next week's Supply and Demand Report which they say is typical for a December report. Analysts plan on another day of consolidation type trade with $7.47 acting as support and $7.57 as resistance.
WHEAT
The March KC Wheat is making it's way back to the bottom of the trading range. The wheat market isn't getting any help from the corn and we still aren't overwhelmed with big export sales on the weekly reports. The only bullish factor that does remain constant at least for the time being is the dry weather in the Hard Red Winter Wheat Belt. There is no improvement on the crop and chances for moisture so far are slim. This should support the new crop contracts well for the time being.
SOYBEANS
The January soybeans made another new high for the move overnight and it still looks like the market is headed for the $15.00 level say analysts. There is no change in the news. Demand is strong and there is always one eye on the weather in South America. Analysts say soybeans and soybean oil have the best chances of seeing changes in the Supply and Demand Report. Additionally, if there are changes, they are anticipated to be in the form of higher demand.
LIVE CATTLE
December Live Cattle took out it's low from the previous day and closed below the 40 day moving average in Tuesday's trade. There was some light movement of cash in western Nebraska Tuesday evening at 122.50. Asking prices in most areas remains at $127+, with bids in the $122-$123 area. Monday's slaughter number was reported at 120,000 while Tuesday picked up to a stout 129,000. We are now 6,000 ahead of last week's pace, and this suggests that the packers feel comfortable with their numbers or they will need additinal inventory from the cash market.
FEEDER CATTLE
Feeder Cattle futures closed narrowly mixed on Tuesday, unable to hold early gains, but not following fats deep into negative territory. The cash index stabilized for the day, which may provide underlying support. Overnight corn prices are mostly flat, as they await Stat Canada numbers this morning. The continued drought in the plains is pushing more cattle away from wheat pasture and into feedlots.
CRUDE OIL
January crude oil prices trended back to the $89.00 level in overnight and early morning action. Early support seemed to come from private industry data late Tuesday that showed a much larger than expected decline in crude stocks last week. Expectations for today's EIA report are for a draw in the range of 750,000 barrels, which is in line with the five year average. The early morning tone across global equity and commodity markets was also supportive to the crude oil market, as well as a new seven week high in the Euro Currency vs. the US dollar. Ideas that China's new government is open to new projects and tax reform seemed to raise the prospect of more stimulus, which stoked demand expectations in the process. Another source of support are ongoing tensions in the Middle East, with the latest coming from NATO urging Syria not to use chemical weapons with its battle against rebels, as well as headlines yesterday that Egypt's president fled the presidential palace after protests.
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.
