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Midday Update

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Midday Update

·         The dollar remains lower as the euro rallies on advancements in Greece, but the greenback is well-off its lows. We saw a brief spurt of money buying the broader commodity indices in bottom-picking action early today, but that flow has reversed, with the major indices slipping to new lows for the move as Wall Street laments the poor global economy that is expected to decrease demand for commodities.

·         Soybeans were the bright spot on good demand, but soymeal futures fell after this morning’s USDA weekly export sales report, with losses accelerating after the pause. Soymeal shipments remain strong for this time of year, but new sales are finally showing signs of dropping off significantly. Weakness in meal dropped the bottom out of soybeans as well, with the focus shifting to favorable growing conditions. November soybeans face next key support at $9.7875.

·         Corn futures found a bid earlier this morning on spread trading, but they are now turning lower as well as traders focus on improving crop conditions across the Midwest. December corn took out Wednesday’s lows and is currently testing support at the 50% retracement of the mid-summer rally at $4.08, with next meaningful support at $4.

·         Wheat futures are trying to post a technical bounce this morning, but that is losing momentum as selling in the broader commodity indices increases. An industry tour of the Canadian Prairies continues to report of significant yield losses due to the worst drought in decades, but traders are focused more on the massive supplies of U.S. wheat that can’t be sold due to “high” prices. This morning’s USDA weekly export sales report showed good demand for hard red spring wheat, but demand for hard red winter and soft red winter wheat remains nearly nonexistent.

·         Live cattle futures are mostly 35 to 55 cents weaker this morning with August live cattle probing four-month lows on ideas that this week’s cash cattle trade will remain weak.

·         Feeder cattle are 55 to 70 cents weaker as the cash index continues to fall on weakening demand on tighter margins for feeding.

·         Lean hogs are 50 to 75 cents weaker in a technical pull-back after the lead August contract failed to take out the 100-day moving average after product prices pulled back on Wednesday. Cash hogs are steady to $1 higher in the closely watched Iowa/Southern Minnesota market, while mostly steady elsewhere.

 

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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