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Midday Update



Midday Update

·         Gains in the dollar today have been modest, but enough to push the index to new three-month highs, leading speculative fund managers to short (sell) the major commodity indices that include the major ag commodities. That’s not the cause of lower ag commodity prices, but it contributes to it and likely amplifies the losses.

·         Grain and oilseed prices came off their lows mid-morning when USDA data showed that soybean shipments rose to a 9-week high and both corn and wheat shipments rose to 12-week highs in the week ending July 16.

·         Export shipments for week ending July 16 (mln bu); corn 45.7 (strong), grain sorghum 4.6 (strong), soybeans 11.3 (strong), wheat 18 (good).

·         Shipments to China in week ending July 16 (mln bu); soybeans 0.055, corn 2.5, grain sorghum 4.6, wheat 4.4. China is quietly increasing imports of U.S. corn and wheat to go along with its strong grain sorghum imports. It will be back for soybeans when new-crop supplies become available.

·         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 it will show that the corn and soybean crops will remain unchanged at 69% and 62% Good to Excellent respectively. The winter wheat harvest is expected to advance to 76%, while spring wheat slips 1 point to 70% Good to Excellent.

·         Corn futures are down 7 cents on a shift toward more favorable weather patterns in the Midwest with added pressure from broad-based selling of the larger commodity sector.

·         Soybean futures are 6 cents weaker on similar dynamics, but finding a bit more support from strong processor demand; now combined with stronger exports. My old-crop ending stocks estimate is 238 million bushels as a result of these demand patterns, below USDA’s estimate of 255 million bushels.

·         Wheat prices are down 14 cents in Chicago, down 16 cents in KC and down 11 cents in MN due to the broader pattern of slow demand and huge surplus stocks.

·         August to December live cattle futures are 5 to 35 cents higher, while the deferred contracts are showing similar losses in generally quiet trade today.

·         Feeder cattle are trading $1 higher on the sell-off in corn.

·         The August to December lean hog futures contracts are 5 to 35 cents weaker, while the deferred contracts are 25 to 80 cents stronger this morning. The Midwest cash market is mostly steady in the west and $1 lower east of the Mississippi River. Product prices are firmer, but in slow volume.


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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