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Midday Update

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Midday Update

·         The equity markets are pushing higher and the dollar modest gains as Wall Street anxiously waits for the 1 p.m. CDT release of the Fed’s revised monetary policy statement. Wall Street will be watching for any change in wording that might suggest a September interest rate hike, with potentially significant implications for the currency and commodity markets.

·         Crude oil prices surged this morning when the Department of Energy reported that crude oil stocks fell by 4.2 million to 459.7 million barrels in the week ending July 24 as demand improves. Stocks are still near levels not seen in July for 80 years. Gasoline stocks fell 0.4 million barrels and are in the middle of the typical range for this time of year, while distillate stocks increased by 2.6 million barrels, but are also in the middle of the typical range for this time of year.

·         The Department of Energy reports that ethanol stocks remained unchanged at 19.6 million barrels in the week ending July 24, but up from 18.6 million barrels in the same week last year. Ethanol production slipped to 965K barrels per day, down from 973K barrels the previous week, but up from 954K barrels in the same week last year.

·         Soymeal continues to show gains north of $5 per ton on strong demand, keeping soybean prices elevated. However, August beans are up just 7 cents, down 6 cents from their session high, while November soybeans are up just a penny.

·         Corn prices are down 6 cents on “near-perfect weather” in the eyes of the trade, but pressure also comes from weakness in wheat.

·         Wheat prices are down 14 cents in Chicago, down 10 cents in KC and down 11 cents in Minneapolis. Tour participants in North Dakota are calling for record yields thus far.

·         Live cattle futures are quietly mixed after weaker product prices Tuesday afternoon poured cool water on hopes of a seasonal low. August cattle still cannot take out Tuesday’s high.

·         Feeder cattle are 45 to 65 cents higher on weaker corn prices, but also have not been able to challenge Tuesday’s high.

·         Lean hogs surged on chart buying this morning after October broke above resistance near $66. The cash market is mostly steady to up to $1 higher on good demand. Product prices are considerably weaker.

 

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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