CORN
Newly published crop condition ratings show a decline of 5 points to 72% Good to Excellent with Illinois, Indiana and Kansas all with double digit declines. Although expected, it didn't provide much support to the market. July corn fell through critical support on the charts and although it is considered oversold, ther eis currently no indication that a bottom has been reached. As for the December contract, bear spreading and imperfect weather in the Corn Belt are keeping that market from taking out the low made in May. Analysts believe a record yield is looking less likely as time goes by.
WHEAT
The $6.85 support failed in the July KW, which makes the new downside objective of $6.55. Harvest pressure, corn pressure....a dual force in the market at this time. Production is not expected to meet expectations, which is supportive to the market, but as usual, what we really need to see is more demand. After the recent short liquidation the funds now have a lot of room to sell wheat in Chicago.
SOYBEANS
Bear spreading has been active overnight due at least in part to concerns about the weather and the slowdown in Chinese old crop purchases. On the charts, the beans are still trading in a downward channel. The bulls will at least need to take out the high from yesterday at some point this week in order to change the trend. Rainfall totals over the next 3-4 days will determine if that happens.
LIVE CATTLE
Live Cattle futures closed moderately higher to begin the short week, with higher cutouts and firm equities leading the way. Overnight trade saw moderate weakness, with the Dollar value firming and equities sliding lower. A lack of interest from the large speculative trade is keeping a lid on price and the open interest in a declining mode. Analysts anticipate cash interest to be a day or two away, but if slaughter keep up Tuesday's 130,000 pace, we will see buyers sooner than later.
FEEDER CATTLE
Feeder Cattle futures closed moderately to sharply lower on Tuesday, as traders sold thelarge premium to cash in the late summer and fall contracts. Weaker corn values didn't even faze the selloff in the feeders. Analyst expect to see more of the same, unless deferred Live Cattle are able to find buying interest. Overnight, Feeders were mixed to lower, with corn trading narrowly on either side of unchanged.
CRUDE OIL
July crude oil prices soldoff into a new low for the decline during the initial morning hours, pressured by renewed concerns over Spain's banking sector and reduced chances for a big round of Chinese stimulus. It seemed that growing uncertainty in Europe pushed Brent crude oil prices into new low ground for the decline and to their lowest level since December 2011. Further weakness in the Euro currency supported the US dollar, and that seemed to put added pressure on the crude oil market. Some traders suggested that the weak outside market tone this morning might have put concerns regarding Iran's uranium enrichment program, as well as supply disruption concerns, temporarily on the back burner.
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.
