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Midday Update

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Midday Update

·         The dollar remains higher, but it fell sharply from near its session highs this morning when The Conference Board reported that the consumer confidence index had fallen to 90.9, down from 101.4 the previous month and down from Wall Street expectations of 99.6. The data suggests that consumers are growing more wary about the U.S. economy, which feeds into the recent concerns about the global economy.

·         Even so, today is about the technical bounce following the crash. Stock and commodity prices are bouncing, but gains are limited. Some end user and speculative short-covering buying can be expected, but most traders are being cautious while watching events in the outside markets to be sure that a bottom is in fact in place. They can afford to do so near-term, because the flow of fundamental information is slow in late July. Crude oil is in the process of posting a friendly reversal on the charts after sliding to new four-month lows overnight.

·         USDA’s daily export reporting service today confirmed the sale of 4.7 million bushels of U.S. grain sorghum; equally split between the current and new-crop years.

·         Corn futures are down 2 cents at this hour as crop ratings creep higher amid more favorable weather conditions, with many traders believing that the problems created by early-season persistent rains have healed.

·         Soybean futures are 11 cents higher for the lead August contract and 10 cents higher for November. Demand is good, with processors pushing bids to pull soybeans out of farmer’s hands.

·         Wheat futures are 3 to 4 cents higher across the board on a technical bounce as this market shows signs of carving out a seasonal bottom. Industry representatives began a tour of the Northern Plains spring wheat belt today, which is expected to confirm a good crop in that region.

·         Speculative short-covering jettisoned futures higher in the cattle complex this morning on signs that the product market may be posting a seasonal low. Live cattle futures are $2.25 to $2.65 higher on the short-covering.

·         Feeder cattle futures are $2.20 to $2.90 higher for similar reasons, with help from weaker corn prices as crop ratings creep higher.

·         Lean hog futures are $0.50 to $1.10 higher after contracts bounced late yesterday after approaching areas of chart support. The cash market is mostly steady to up to $1 lower, while product prices are slightly higher in routine movement.

 

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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