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Midday Update

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Midday Update

·         This morning’s monthly employment summary report showed that the economy created 215,000 jobs, while the unemployment rate remained unchanged at 5.3%. The numbers basically matched Wall Street expectations and were seen as “good enough” to support an interest rate hike later this year.

·         The dollar pushed to new 3-1/2 month highs following the jobs report released, but then strength withered away. The major commodity indices showed signs of selling fatigue, finding support at these multi-year lows. That has allowed grain and oilseed prices to bounce this morning, led by soybeans.

·         Soybeans are pushing to double-digit gains, up 15 to 16 cents, on ideas that USDA will cut more than a million acres from the crop next week, while taking 1.3 bushels off the yield. Such a large move in both categories in the August report would be surprising for USDA in a wet year like this, although our analysis would support both at some point down the road.

·         Corn futures are 2 cents higher in sympathy with soybeans. Traders expect USDA to knock a couple bushels off its yield estimate for corn next week. Again, we support larger cuts down the road, but such a cut would go against some past tendencies in the August report in wet years.

·         Wheat futures are mixed this morning as the market consolidates around a possible bottom, while watching the dollar show signs of topping.

·         Live cattle futures are 10 to 35 cents weaker while waiting for cash action. Packers are offering $145 to $147, while feeders are asking up to $155 per cwt in the Plains. Product prices were modestly higher this morning, but at low volume.

·         Feeder cattle are showing similar losses while taking their lead from the fats. Traders will be watching next week’s USDA crop report closely for indicators of future feed costs.

·         Lean hog futures are 10 to 60 cents higher this morning, bouncing off chart support. Cash hogs are $1 higher to $1 lower in the Midwest. Product prices firmed to their highest level since December at midday, but on very low volume. Traders are worried about higher hog numbers with heavier carcasses beyond the Labor Day weekend.

 

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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