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Midday Update

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Midday Update

·         China promises to take steps to stabilize its stock market, but the global economic fears that last night’s collapse re-energized continue to weigh on the broader commodity and equity markets. The broader commodity indices tried to stabilize earlier this morning, but then came under renewed selling once again. This is the biggest threat for grain and oilseed prices in the near-term in the absence of any real knowledge about the size of this year’s crops.

·         USDA is scheduled to release its weekly crop progress report at 3 p.m. CDT this afternoon. A Reuters survey of trade participants reveals expectations that the agency will peg the corn crop at 69% Good to Excellent, unchanged from the previous week. Soybeans are expected to come in at 63% G/E, up 1 point from the previous week. Winter wheat harvest is expected to reach 84 as of July 26, up from 75% the previous week.

·         Export shipments in the week ending July 23 totaled 43.6 million bushels of corn (strong), 6.3 million bushels of grain sorghum (strong), 4.4 million bushels of soybeans (soft) and 16.1 million bushels of wheat (soft). China took all of the week’s grain sorghum shipments, but was basically a non-factor in the other commodities.

·         Corn futures are down 18 cents in a flush of the market following the lead of the broader commodity complex. The market has the appearance of a final flush, but market action is largely based on emotions driven by what is happening in China.

·         Soybean futures are 25 to 28 cents lower for similar reasons to corn. Soymeal futures are down nearly $10 per ton.

·         Wheat futures are down 7 cents in Chicago and down 5 cents in the hard wheat markets. There is a glimmer of a bright spot here, as prices thus far show signs of finding support at key areas on the charts, suggesting a low may be very near. Continued weakness in the dollar could help that occur.

·         Feeder cattle broke lower on follow-through selling early today, but they have now worked their way back to half-dollar gains as the corn market collapses.

·         Fat cattle are mixed, with the nearby contracts 25 to 40 cents higher now on firming feeder cattle futures. Boxed beef prices are bouncing this morning, but on thin volume.

·         Lean hogs are down 30 to 70 cents in follow-through selling after prices failed three times to take out the 100-day moving average last week. Cash hogs are mostly steady. Product prices are modestly higher, but on very thin volume.

 

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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