CORN
The December corn posted solid gains yesterday and had some follow through buying overnight, which pushed the market through the 9 day moving average. The market is said to be basically at the middle of the recent range and there is a good chance that we will see a test of the $8.25 area by tomorrow's close. So far, however, there is little indication that the market is about to change it's sideways pattern. Export sales were reported poor at 122,800 MT of old crop and 130,600 MT of new crop sales.
WHEAT
Export sales were a disappointment at 396,700 MT thanks to large cancellations by "unknown destinations". However, the market is firm this morning thanks to continuing bad news out of Russia and thoughts that we will eventually see them curtail exports and we will see more demand. The bulls need to see the December KW move through the $9.00 level in order for that market to look like a buy again, say analysts.
SOYBEANS
Soybean export sales were great with 97,200 MT of old crop and 924,600 MT of new crop sales. China was the big buyer of both old crop and new crop beans and the quantities show how poorly the market is rationing demand. New crop sales commitments now total 53% of the year's expectations, so there doesn't have to be much sold each week from here on out. November soybeans look like they will be near $17.00 soon according to analysts.
LIVE CATTLE
Live Cattle futures settled narrowly mixed on Wednesday, with August higher and deferred contracts modestly lower. With the end of the week nearing, cash trade should begin to take shape today. Feedlots appear to have the upper hand after seeing a 12.00 rise in boxed beef prices over the past seven trading days. Overnight trade had been two sided in a narrow range. 43 new deliveries were posted against the August contract. Friday's On Feed Report is expected to show 100.7% on Feed, 91.4% Placed and Marketings of 101.6%.
FEEDER CATTLE
Feeder Cattle futures closed moderately lower on Wednesday, pressured by double digit gains in the corn futures. Prices were weakening again this morning, after trading two sided overnight. Corn is up another 3-5 cents along with softer deferred Live Cattle. If the placements for July come in as expected on Friday, analysts say it would be the second largest placement total for that month in the past 20 years. Unless corn has a major setback, analysts expect feeders to lose ground to the fats.
CRUDE OIL
September crude oil prices traded around unchanged levels for most of the overnight and early morning hours. Perhaps that comes in response to a mixed outside market tone, with China talking up the potential for another RRR cut but a further decline in their Foreign Direct Investment in July prompted some analysts to lower the country's growth prospects. Talk of Saudi Arabia kidnapping threats and ideas that Israel is willing to attack Iran's nuclear operations stoked the geopolitical risk premium in the crude oil market. Yesterday's upside breakout action in September crude oil came on the heels of a larger than expected US inventory draw last week of 3.699 million barrels. This brought current inventory levels to 366.158 million barrels, which is down to a new four month low. Another positive highlight in the report was the strong total petroleum demand that touched 20.0 million barrels per day last week, a new nine month high. EIA crude stocks are 12.175 million barrels above year ago levels and stand 27.189 million barrels above the five year average. Crude oil imports for the week stood at 8.717 million barrels per day compared to 8.627 million barrels the previous week. The refinery operating rate was unchanged on the week at 92.6%, which compares to 89.1% last year and the five year average of 88.09%.
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.
