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Midday Update

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Midday Update

·         The Bureau of Labor Statistics reports that the producer price index fell 0.4% in April, versus Wall Street expectations of a 0.2% rise. This suggests more concerns about deflation, decreasing the odds of an interest rate hike near-term.

·         The U.S. Climate Prediction Center finally confirms what we’ve been passing on to you from Commodity Weather Group. The CPC sees a 90% of an El Nino summer and 80% odds that the El Nino will continue through the remainder of the year.

·         El Nino years tend to favor high corn and soybean yields in the U.S. Midwest.

·         Export sales for the week ending May 7 included 14.7 million bushels of corn (nearly all old-crop), 1.6 million old- & 4.2 million new-crop grain sorghum bushels, 5 million old- & 3.2 million new-crop bushels of soybeans and 9.5 million bushels of wheat.

·         Grain sorghum basis bids are tumbling in many markets after an USDA attaché in China indicated that the Chinese government is taking notice of the large shipments there and may try to block them in order to facilitate use of its high-priced reserve corn.

·         Corn futures are 6 cents higher on short-covering, aided by strength in wheat prices.

·         Soybean futures are 2 cents lower on big stocks and softening demand.

·         Wheat futures are up 26 cent in Chicago, up 27 cents in KC and up 21 cents in MN as speculative hedge fund managers take profits on their large short positions.

·         Live cattle futures are up $1.35 to $1.80 after Choice cuts rise to record high levels this morning and on strength in the charts.

·         Feeder cattle are $1.20 to $1.35 higher on strength in the fat cattle market.

·         Lean hog futures are mixed; product prices are higher. Cash hogs are steady to $1 higher.

 

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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