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Midday Update

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Midday Update

·         The dollar is bouncing modestly today, but not enough to significantly influence money flow in the broader commodity sector. Fund managers continued to pile on sell orders of the major commodity indices early today, adding to pressure in the grain and oilseed complex. However, profit taking is encouraging active buying of the continuous commodity index, of which the grains are a part. Wall Street has turned very bearish the commodity sector, but often times that is a signal that a low may be near.

·         Strong demand from processors for soybeans continues to support the August contract, but corn and deferred soybean contracts remain under pressure amid talk of “ideal” Midwest weather for the crops. How quickly market sentiment can change. Wheat prices are mixed as prices consolidate after recent losses.

·         Corn futures are down 3 to 4 cents this morning after completing a 38% retracement of the recent mid-summer rally. A 50% retracement would take December corn down to $4.02. Trade reports indicate that 10,000 $4.30 calls were purchased this morning, raising talk of a possible near-term low.

·         August soybeans are 3 cents higher on strong demand, while November soybeans are down 6 cents on favorable growing conditions.

·         Chicago wheat is mixed, while KC is up 2 cents in consolidation today. MN wheat is down 2 to 3 cents as reports from the Canadian wheat tour are improving today.

·         Feeder cattle are mostly steady to 50 cents higher today on weaker corn prices, consolidating within Tuesday’s trading range.

·         Live cattle futures are steady to 30 cents higher in the August and October contracts, but 15 to 35 cents weaker in the deferred. Packers are offering $144 in the Plains, while feeders are asking $150, although there have been unconfirmed reports of a few cattle moving at $147 per cwt on a live basis, down $1 from the previous week.

·         Lean hog futures are mostly $2 to $2.50 higher on a breakout to the high side on the charts this morning, with the August contract testing the 100-day moving average. Unfortunately, the composite pork product price is down $1.56 after being up more than $2 yesterday.

 

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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