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Midday Update

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Midday Update

·         The dollar remains higher and crude oil sharply lower today, taking the air out of yesterday’s “risk on” day on Wall Street that saw money flow freely to the broader commodity and equity sectors.

·         Crude oil added to losses after the Department of Energy reported that crude stocks rose by 6.3 million barrels last week. Stocks of crude oil are the highest for this time of year in at least 80 years!

·         The Department of Energy reports that ethanol stocks rose to a 2-1/2 year high of 21.0 million barrels in the week ending January 30, versus 20.6 million the previous week and 16.7 million the previous year.

·         Ethanol production dropped to a nearly three-month low of 948K barrels per day during the week, versus 978K the previous week and 895K in the same week last year.

·         A Commodity Weather Group analysis of years with similar weather suggests that USDA’s Argentina corn production estimate may be 4 to 6 mmt too low and its soybean estimate may be 2.5 to 5.0 mmt too low.

·         Corn futures are 2 cents lower on building ethanol stocks and the approaching South American harvest.

·         Soybeans are 12 cents lower amid soymeal prices that are $6.70 per ton lower on increased harvest momentum south of the equator.

·         Wheat prices are 1-cent higher in Chicago, 3 cents higher in KC and 3 cents lower in Minneapolis in consolidation trade.

·         Feeder cattle are another $2 to $2.20 lower this morning on continued bearish sentiment in the beef sector.

·         February live cattle are 25 cents lower, but April is $1.30 lower on weakness in the feeder cattle market. Boxed beef movement is good at mid-morning at 131 loads, but on mixed prices.

·         Lean hog futures are $1.75 to $2.60 lower after breaking chart support. The cash market is steady to $1 lower. Product movement is routine for a Wednesday, but the composite price is p $0.42 to $76.67.

 

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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