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Midday Update

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Midday Update

·         The economy added 252K jobs in December, beating Wall Street estimates of 240K. The previous two months were also revised upward another combined 50K jobs.

·         The unemployment rate dropped to 5.6% from 5.8% the previous month as more people dropped out of the job force. The labor force participation rate dropped to its lowest level since 1978 at 62.7%. Hourly wages also dropped a nickel.

·         The dollar rallied off its session lows on the data’s release before sinking again, but the equity markets have largely been negative. The VIX, Wall Street’s fear index, has been modestly higher on global economic concerns combined with the evolving terrorist situation in France.

·         USDA’s daily export reporting system today included notice that South Korea bought 5.4 million bushels of old-crop corn and “unknown destinations” bought 4.6 million bushels of old-crop grain sorghum.

·         Money flow is choppy amid a great deal of uncertainty with this year’s January USDA crop report.

·         Traders remain wary of index fund portfolio rebalancing late in the trading session, particularly in the beef sector. That factor produced some limit-down moves Thursday in the beef sector.

·         Crude oil prices are trading just above this week’s 5-1/2 year low of $46.83.

·         Corn futures are 5 cents higher on rising global demand for corn and positioning for Monday’s USDA crop report.

·         Soybeans are 2 cents higher on strong upfront demand and positioning for Monday.

·         Soymeal futures are steady to firm, although the trend has been for basis to soften this week.

·         Wheat futures are 2 cents higher in Chicago and steady to 1-cent weaker in the hard wheat markets.

·         Live cattle futures are locked the $3 daily limit lower on fear of additional index fund selling as they rebalance their portfolios. Boxed beef prices are strong again this morning on good movement.

·         Feeder cattle are $3.25 to $4.50 lower on similar dynamics as the live cattle market.

·         Lean hog futures are modestly mixed. The cash market is mostly steady, but the product market is soft again this morning.

 

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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