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Midday Update

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Midday Update

·         The dollar has been relatively quiet this morning, trading both sides of unchanged, but near 3-1/2 month highs. However, the primary focus has been on crude oil prices near 4-1/2 month lows. That’s providing a drag to the broader commodity sector, leading to fresh selling of the major commodity indices, which provides a drag on grain and oilseed prices as well.

·         USDA released export sales data for the week ending July 30 this morning. Wheat sales were strong at a marketing-year high 30.9 million bushels, highlighted by strong demand for hard red spring and hard red winter wheat. Corn sales were very disappointing at negative 0.1 million old-crop & 10.9 million new-crop bushels. A large shift from old-crop to new-crop saw old-crop soybean sales negative 16.4 million bushels of old-crop versus 37.6 million new-crop bushels. Grain sorghum sales were strong at 2.2 million old- and 8.8 million new-crop bushels.

·         USDA’s daily export reporting service today indicated that China bought another 4.85 million bushels of new-crop soybeans in the past 24 hours that will show up in a future weekly export sales report.

·         Corn futures are 1 to 2 cents lower on the weak export data and weakness in soybeans, along with a technical pull back after recent gains amid uncertainty about this year’s crops.

·         Soybean futures are down 5 cents for the nearby and 9 cents for deferred contracts on disappointing export data and yesterday’s technical failure to take out the July 30 high for November. Choppy trade likely to continue into USDA’s crop report next week.

·         Wheat futures are up 10 cents on short-covering in Chicago and up 4 cents in KC and 6 cents in MN on good demand. Chicago soft wheat has weakest fundamentals long-term.

·         Live cattle futures are steady to 60 cents higher in follow-through trading after taking out a series of areas of resistance on today’s higher open. Support comes from recent strength in Choice cuts, but that strength is waning on word that prices are softer at mid-morning.

·         Feeder cattle are mostly 20 to 50 cents higher on strength in the fats and weaker corn prices, but strength is waning late this morning.

·         Lean hog futures are down as much as $2.20 per cwt on this morning’s weakness in product prices, led lower by loins and belly prices. Belly prices had reached their highest level in more than a year  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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