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Midday Update

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Midday Update

·         The dollar is well off its lows as traders wait for Greece’s parliament to vote on the offer made to creditors. It is expected to pass, which would then put the pressure on European Union leaders to accept or reject it going into the weekend. The markets are generally optimistic.

·         Corn futures are up 5 to 6 cents in response to a report that cut stocks, but not yields, with traders looking ahead to how tight balance sheets will be once USDA does cut yields. However, strength in the current rally seems to lack some conviction at this time.

·         Soybean prices are up 9 cents on the tight old-crop stocks that demonstrate that demand remains quite strong, opening up the imagination to what could happen once USDA does cut yields as expected. However, prices are already coming off their highs suggesting some lack of conviction.

·         Wheat futures are up 3 cents on the surprisingly low winter wheat crop that offset gains in spring wheat. KC wheat is mixed, while MN wheat is down 4 cents on a larger crop.

·         Live cattle are down 75 to 95 cents in follow-through selling as the lead August contract falls to its lowest level since early May. Boxed beef prices were lower again this morning, but the decline has slowed and volume picked up dramatically.

·         Feeder cattle are up 70 to 95 cents on expectations of lower corn prices, although prices are coming off their high since USDA released its report.

·         Lean hog futures are basically $0.50 to $1.10 higher this morning on a technical bounce and steady cash market. Product prices are weaker again this morning.

·         Grain trade was generally quiet with modest gains going into USDA’s crop report. Key numbers from the report were as follows:

Old-Crop Stocks

2014-15

Corn

Soybeans

billions of bushels

USDA July 10 Report

1.779               

0.255               

    Pre-Report Estimates

Average Trade Estimate

1.811

0.287

Highest Trade Estimate

1.880

0.330

Lowest Trade Estimate

1.726

0.251

Previous USDA Estimate

1.876

0.330

Water Street Solutions

1.786

0.294

 

U.S. New-Crop Ending Stocks

2015-16

Wheat

Corn

Soybeans

billions of bushels

USDA July Crop Report

.842               

1.599               

0.425                

Average Trade Estimate

0.861

1.540

0.370

Highest Trade Estimate

0.947

1.910

0.450

Lowest Trade Estimate

0.695

1.263

0.193

Previous USDA Estimate

0.814

1.771

0.475

Water Street Solutions

0.947

1.472

0.311

 

U.S. Yields & Production

2015-16

2015-16

Corn

Soybeans

Corn

Soybeans

Yield in bushels per acre

Production in billions of bushels

USDA July 10

166.800               

46.000               

13.530               

3.776               

    Pre-Report Estimates

Average Trade Estimate

165.391

44.964

13.440

3.776

Highest Trade Estimate

169.000

46.100

13.945

3.885

Lowest Trade Estimate

163.000

43.500

13.140

3.580

Previous USDA Estimate

166.800

46.000

13.630

3.850

Water Street Solutions

164.000

44.200

13.301

3.713

 

 

 

 

 

 

 

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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