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Midday Update

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Midday Update

·         Greek Prime Minister Tsipras has a phone conversation with Russian President Putin today. It is one of several conversations the two have had in recent weeks. Is Greece available to the highest bidder? It has great geopolitical significance to both the East and the West.

·         That would suggest that the United States may pressure Europe to bail Greece out, with possible money under the table to do so. However, bailing out Greece would likely quickly provide fodder for a repeat scenario in Spain, which is a much larger economy, with Portugal and Italy to follow.

·         China may become the larger story this week if the government is not able to restore confidence in its financial markets. Weekend steps to stabilize the market boosted a few of the big institutions, but left the broader markets in a tailspin. Fund managers interpret a weakening Asian economy as translating into weaker demand for commodities.

·         USDA is scheduled to release its weekly crop progress data at 3 p.m. CDT today. A Reuters’ survey of trade participants reveals expectations that USDA will peg corn at 67% Good to Excellent, down 1 point on the week; soybeans at 61% G/E, down 2 points; winter wheat unchanged at 41% G/E; spring wheat at 73% G/E, up 1 point on the week. The trade expects USDA to report 97% of soybeans planted, up 3 points on the week, but down from the 5-year average for the week of 99%. Winter wheat harvest is expected to come in at 51%, up 13 points on the week, but down 8 points from normal. Corn silking is expected to come in at 12%.

·         Export shipments for the week ending July 2 totaled 33.0 million bushels of corn, 0.014 million bushels of grain sorghum, 7.3 million bushels of soybeans and 13.6 million bushels of wheat. None of these totals are particularly impressive.

·         Traders are still worried about declining crop ratings, with some end users and speculators alike still buying the breaks and pulling grain and oilseed prices off their lows. Added support comes from an easing in the broader commodity complex as the dollar erases its earlier losses.

·         Corn futures are down 3 cents on the broader sell-off, but is finding support from expectations of lower crop ratings amid this week’s anticipated heavy rains in the southern belt.

·         Soybeans are down 13 cents under similar dynamics to corn.

·         Wheat futures are 5 cents higher in Chicago, 4 cents higher in KC and 9 cents higher in Minneapolis, with support from intensifying dryness in Canada, Australia and Europe.

·         Live cattle futures are $1 lower after failing to even test Thursday’s high in early trade. Product prices are sharply lower on routine movement this morning.

·         Feeder cattle are 60 to 80 cents weaker on weakness in the fat cattle market.

·         Lean hogs are quietly mixed. Cash hogs are steady to $1 higher this morning, with product prices stronger as well on good movement.

 

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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