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Midday Update

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Midday Update

·         The outside markets are in a strong rebound today as they begin to accept a possible Greek exit and on the biggest rebound in the Chinese stock market of the past six years. Crude oil prices are rebounding on ideas that Chinese and European problems will not significantly impact global demand. That easing of worries frees money managers up to buy the grains once again.

·         Traders are buying the grain complex on ideas USDA will tighten the balance sheet tomorrow. They’re counting on yield cuts from USDA for corn and soybeans based on excessive rain, although USDA could point toward crop ratings that are near average for this time of year. That’s really all they have to look at until they start walking fields in a few weeks.

·         Export sales in the week ending July 2 totaled 21.1 million old-crop & 5.9 million new-crop corn bushels, 0.0 million bushels of grain sorghum, 1.5 old- & 7.4 million new-crop soybean bushels and 12.8 million wheat bushels. Chinese purchases during the week included 2.5 million bushels of corn, (0.018) million bushels of soybeans and no grain sorghum or wheat.

·         Soybeans are rebounding on fresh export demand reported yesterday and the big rebound in Chinese stocks. They also had lost the most in recent trading days. As such, soybeans are up 30 to 32 cents on the day.

·         Corn prices are following soybeans higher and are testing six-month highs set last week on optimism that USDA will cut yields tomorrow.

·         Wheat prices are also following, but are only up 5 in Chicago, up 2 in KC and up 5 in MN. Demand for U.S. wheat remains weak, but traders are worried about adverse weather in Europe, Canada and Australia.

·         Live cattle futures are $0.70 to $1.20 lower on follow-through weakness on a continued free-fall in product prices this morning.

·         Feeder cattle are $1.00 to $1.30 lower on weakness in the fats and strength in corn.

·         Lean hogs are down $1.10 to $1.80 as packer margins evaporate on soft product prices amid a large number of hogs being delivered to market.

 

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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