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Midday Update

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Midday Update

·         The dollar broke lower in profit taking this morning after failing to test Monday’s three-month high. Speculative funds saw this as a signal to profit from the recent sharp sell-off in the commodity indices, turning buyers of the broader commodity sector. That provided support for corn and wheat following recent losses, while amplifying a modest bounce in soybeans on tightening stocks amid strong demand. Buying in the broader commodity complex has waned as the morning progressed, allowing wheat prices to slump, while corn and soybeans hang onto early-session gains.

·         The rebound in corn prices amid a sharp drop in the cash index Monday afternoon stimulated heavy liquidation in the feeder cattle futures market this morning, which in turn weighed on fat cattle prices as well. Demand for light-weight cattle is waning amid fears that a short corn crop could squeeze margins this winter and into next year.

·         Today’s cash hog market is mostly steady to 50 cents weaker across the Midwest. The number of hogs continues to raise questions about whether USDA under-counted pigs in its June quarterly hogs and pigs report.

·         Corn futures are 3 cents higher at this hour, garnering support from strength in soybeans.

·         Soybean futures are 8 cents higher on strong demand amid concerns about this year’s crop.

·         Wheat futures are 2 cents weaker in Chicago, where demand for a poor quality crop remains weak. KC wheat is also down 2, but MN wheat is a penny higher on good demand for quality.

·         Feeder cattle are $3 to $3.20 lower after a sharp break in the cash index reflected waning demand for lighter-weight cattle as margins compress.

·         Fat cattle are $1. To $1.20 lower on weakness in the feeders. Today’s spot daily product market is mixed on routine volume.

·         August lean hogs are 60 cents higher trying to close the gap with the cash index, which is also slipping toward the lead contract. The deferred contracts are weaker on large numbers despite strong gains in the product market this morning.

 

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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