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Midday Update

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Midday Update

·         Greek Prime Minister Tsipras returns to Greece from an emergency summit to a hostile environment at home within his own party. The euro is weaker, with the dollar up 700 points at times this morning on skepticism about whether he’ll be able to get the necessary reforms through parliament by Wednesday as required in the agreement.

·         USDA is scheduled to release its weekly crop progress report at 3 p.m. CDT today. The trade expects it to show deteriorating conditions, which has been providing support for corn and soybean prices this morning.

·         Export shipments for the week ending July 9 totaled 41.6 million bushels of corn (strong), 3.9 million bushels of grain sorghum (good), 4.9 million bushels of soybeans (seasonal), and 9.2 million bushels of wheat (weak).

·         The trade is trying to get a grasp of crop losses in the southern Midwest, versus strong yield potential in the northwestern Midwest. We expect a bigger draw on yields in wet areas than rise in the good areas, leading to much tighter new-crop stocks than currently projected by USDA.

·         Historically, the market has been reluctant to acknowledge that, largely because USDA has been reluctant to do so. USDA raised its corn yield in the August 2010 report to above-trend. As such, the biggest question at this point is the timing of the move. Thus far, this market has been reluctant to follow historical tendencies.

·         Corn futures are 4 cents higher and probing Friday’s highs on strong demand and expectations of lower crop ratings this afternoon.

·         Soybeans are 4 cents higher on expectations of lower ratings after an early-session sell-off held above Friday’s low.

·         Wheat futures are 3 cents weaker in Chicago, 9 cents lower in KC and 12 cents lower in MN on poor demand.

·         August and October live cattle futures are 30 to 50 cents weaker, while the deferred contracts are modestly higher this morning after the market slipped to new lows for the move early.

·         Feeder cattle futures are bouncing $1 after last week’s big price break.

·         August lean hogs broke to new lows early today, but since then have firmed back to erase the bulk of the losses, with the deferred contracts in positive territory on a lack of follow-through selling.

 

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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