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Midday Update

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Midday Update

·         The U.S. economy contracted by 0.2% in the first quarter of this year according to the final revision released this morning, but that’s an improvement from the previous estimate of a contraction of 0.7%.

·         The dollar erased its overnight losses following the report, but remains relatively quiet at this hour with traders monitoring the situation in Greece.

·         The equities remain under pressure on Greek concerns, while money flows modestly into the broader commodity sector.

·         The Department of Energy reports that crude oil stocks fell 4.9 million to 463 million barrels, but remain near 80-year highs for this time of year. Stocks fell 2.7 million barrels the previous week. Crude oil prices are turning lower as the dollar firms.

·         Ethanol stocks fell sharply to 19.8 million barrels in the week ending June 19, versus 20.7 million the previous week and 18.2 million barrels in the same week last year.

·         Stocks fell even as production hit a new record 994K barrels per day during the week, up from 980K barrels the previous week and 938K barrels per day in the same week last year.

·         Some grain buyers note that they saw one of the largest days for farm corn sales since harvest yesterday, while soybean sales were significant as well, yet the market has been very resilient this morning.

·         Corn futures are 1 to 2 cents higher this morning, pushing to new one-month highs as production prospects slip amid good processor demand.

·         Soybean futures are 1 to 3 cents higher on ideas that old-crop stocks are tightening and new-crop conditions are sliding.

·         Wheat futures are 2 cents higher in Chicago in continued short-covering amid harvest delays, while Kansas City is a penny lower on harvest pressure and Minneapolis is 2 cents higher.

·         Live cattle futures are $1.10 to $1.40 lower on ideas that demand will back off after the Fourth of July. Packers have yet to respond to feeder offers of $152 to $153 per cwt on a live basis, compared to last week’s trade at $150 per cwt.

·         Feeder cattle are $1.15 to $1.45 lower on weakness in the fat cattle market and strength in corn.

·         Lean hogs steady to 40 cents higher in another round of consolidation ahead of Friday’s USDA quarterly hogs and pigs report. Cash hogs are mostly steady to 50 cents weaker.

 

All opinions expressed in this commentary are solely those of Water Street Advisory. This data and these comments are provided for information purposes only and are not intended to be used for specific trading strategies. Although all information is believed to be reliable, we cannot guarantee its accuracy or completeness. There is significant risk of loss involved in commodity futures and options trading and may not be suitable for all investors.

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Arlan Suderman | Senior Market Analyst
WATER STREET ADVISORY® | www.waterstreet.org
(316) 729-4599 | asuderman@waterstreet.org

Past performance is not indicative of future results. The information contained in this report is intended for informational purposes only and is the opinion of the writer and may change at any time. This information was compiled from sources believed to be reliable but accuracy cannot be and is not guaranteed. There is no warranty, expressed or implied, in regards to this information for any particular purpose. There is SIGNIFICANT RISK involved in trading futures and or options on futures and may not be suitable for all investors. Investors should consider these RISKS and evaluate their suitability based on their financial conditions. No one should ever consider trading futures or options on futures with anything other than RISK CAPITAL. This information is provided freely and is NOT in the capacity of a trading advisor. NO LIABILITY on the part of the author exists for any trading loss you may incur in the use of this information. Information provided is not to be construed as an offer to sell or solicitation to buy any commodity or security named herein.

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