CORN
The November options expire today and there is quite a bit of open interest at the $7.40 and $7.50 strike prices, so analysts look for the market to trade in that area today. Fresh news is limited. Basis levels are still on the rise here and in eastern Europe and there is still hope that we will eventually see better exports, but so far they have not materialized.
WHEAT
The wheat market was directionless overnight and will likely remain that way through the day according to analysts. The market has made it's test of the upper end of the trading range and didn't have any follow through buying, so now we look for consolidation trade and hope for some fresh news. Traders need to see either a big move in the corn or fresh export business to make this market move, say analysts....otherwise they look for a choppy, two sided trade.
SOYBEANS
There are a great deal of soybean options that will expire today with some of the biggest open interest at $15.00, $15.50, $15.60 and $16.00. Analysts say it will be interesting to see which options get exercised. A settlement today at either $14.99 or $16.01 would probably cause the most havoc and either one of those is possible today. Looking to Sunday night, attention will turn to South American weather and any threatening forecasts should provide a bullish boost to the market. With the strong demand we are seeing, analysts anticipate that any weakness today will be used to buy call options.
LIVE CATTLE
Live Cattle futures closed sharply lower on Thursday, in spite of steady to higher cash trade in most of the region. Triple digit losses in all but the expiring October contract were the feature of the day. Weights are showing signs of a seasonal high, with steady to lower levels from the week before. Overnight trade has been two sided, with a quiet tone.
FEEDER CATTLE
Feeder Cattle futures closed with triple digit losses at the close on Thursday, in the face of sharp losses in the corn market. Overnight prices continue to weaken, with another .50 or more off of the front three trading months. With technical signals turned lower, rebound efforts look to be harder to come by on the near term.
CRUDE OIL
December crude oil prices trended lower during the initial morning hours, weighed down by weakness in outside markets and lingering concerns over slumping global demand. The market received a preliminary look at Q3 US GDP this morning, which was slightly better than expected. Ample US crude supplies and the upcoming restart of the North Sea Buzzard oil field have some traders concerned that supply is outpacing demand. This was highlighted by US Government reports noting an increase in global spare oil capacity, with reduced Iranian exports being more than made up by increases in Saudi Arabia and the US.
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.
