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Midday Update

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Midday Update

·         The Department of Energy reports that ethanol stocks rose to 18.8 million barrels in the week ending January 2, up from 18.1 million the previous week and up from 16.1 million the previous year.

·         Stocks rose in recent weeks despite ethanol exports rising to 344 million liters in November, a four-year high.

·         Ethanol production dropped to 949K barrels per day in the week ending January 2, down from 972K the previous week, but up from 919K barrels per day the previous year.

·         China imported just 4,689 tons of DDGS in November, which is a record low since it became a major importer. However, imports are expected to increase dramatically in the months ahead, based on recent purchases.

·         Corn futures are 5 cents lower on the ethanol data and a new 9-year high for the dollar.

·         Soybean futures are mixed, with nearby contracts 1-2 cents higher on strong demand and deferred contracts down 2-5 cents on a big South American harvest around the corner.

·         Wheat futures are down 6 cents now that the cold has arrived and export business remains sluggish.

·         Cash cattle traded at $172 per cwt on a live basis in Nebraska this morning, but futures are modestly mixed to weaker ahead of index fund portfolio rebalancing that is expected to result in selling pressure over the next five sessions starting tomorrow.

·         Feeder cattle are up 88 cents in the January, but weaker in the deferred months on the above.

·         Lean hogs are up 60 to 80 cents on a corrective bounce. The cash market is steady to $1 lower, while the product market is stabilizing.

 

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

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