CORN
The low volume trade overnight didn't provide any follow through weakness in the market, but it wouldn't be surprising to see the December corn drift down to the $7.35 area at some point today. At that level the talk will turn back to rising world corn prices and importers turning back to the US for their needs. Analysts say plan on the trading pattern remaining sideways until we get to the Supply and Demand Report on Friday.
WHEAT
The December KW is still consolidating above the 50 day moving average. This market seems primed to move higher, but we still need a spark to get the market moving. We have the talk of better exports coming soon, but we haven't seen good numbers on a consistent basis yet. When it happens, analysts say this market will explode. Demand will draw down old crop supplies and unless the weather pattern changes, we are set up for another poor crop next summer.
SOYBEANS
The soybeans are the weak link again, which is a little hard to understand with demand as strong as it is, but there is just a great deal of fear regarding the production estimate in Friday's Supply and Demand Report. Analysts believe we will use all we produce and don't think we will see the ending stocks estimate move up. At some point the realization will hit that supplies are going to be very tight this summer and if you don't secure your supplies now, you may go without.
LIVE CATTLE
Live Cattle futures closed narrowly mixed on Friday and basically flat for the week. Slaughter was up a couple of thousand for the week, leaving packers fairly close to the knife entering this week. We expect choppy trade into the election tomorrow, with a lot of eyes on world equity markets. Trends remain lower, suggesting that rallies are for selling the near term.
FEEDER CATTLE
Feeder Cattle futures settled modestly higher on Friday and modestly lower for the week. Corn prices are up in overnight trade, which could create light selling in the Feeders. Some of the plains rains we were looking forward to by week's end seem to be taken out of the forecast. that could pressure the Feeders from a pasture demand point.
CRUDE OIL
December crude oil prices registered a lower low during the initial morning hours, weighed down by weakness in global equity markets, strength in the US dollar and uncertainty over the US presidential election. Some traders noted a measure of caution following weaker than expected service sector growth in China. The crude oil supply situation seems more than ample, despite dislocations from Hurricane Sandy. The continued closure of two key New Jersey refineries is seen as a force limiting demand for crude oil in the Northeast region. The Commitments of Traders Futures and Options report as of October 30th showed non-commercial traders were net long 241,073 contracts, a decrease of 11,606. Non-commercial and nonreportable traders combined held a net long position of 251,146 contracts, for a decrease of 14,484 in their net long positioning. Money managers were also aggressive sellers during the report window, slashing their net long positions by 11%.
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.
