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Midday Update

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Midday Update

* The VIX, Wall Street’s fear barometer, has been up more than 10% at times this morning as the global markets digest the implications of negative industrial data released in China overnight. The Dow Jones Industrial Average has generally been 100 to 200 points lower for the bulk of the morning, while it is currently more than 200 points.

* More details are emerging on last Thursday’s record deal with China in a signing ceremony in Des Moines. USDA confirmed this morning that China bought 36.7 million bushels of next year’s soybean crop, while “unknown destinations” bought another 9.1 million bushels of this year’s crop. We still lack details on roughly 90% of last week’s deals, but those details should continue to emerge in the days ahead.

* Export shipments to all destinations for the week ending September 24 totaled 31.9 million bushels of corn, 13.3 million bushels of grain sorghum (strong), 19.5 million bushels of soybeans and 23.9 million bushels of wheat (one-year high).

* The commodity sector remains under considerable pressure this morning on the global sell-off due to economic concerns focused on China. Those commodities, like soybeans, most sensitive to China are under the greatest pressure.

* Corn futures are down 4 cents, but have not yet done significant chart damage. Selling increased just below $3.95 ahead of Wednesday’s USDA quarterly stocks report known for its surprises.

* Soybean futures are down 12 cents on the above. They remain in the primary trading range between $8.65 and $8.90 that has contained the bulk of price action over the past five weeks or so.

* Wheat futures are down 7 cents after reaching fresh one-month highs overnight. Wheat continues to struggle whenever corn slips into the red.

* October live cattle are down $1.60 on cash concerns, while December is down $0.25 and February and March are modestly higher. Rallies are still being sold amid large imports and a lot of heavy cattle.

* Feeder cattle are $1 higher in the nearby and modestly weaker in the deferred contracts.

* Lean hog futures are 20 to 40 cents higher on good chart strength following Friday’s mostly neutral hogs and pigs report. Product prices are $1.10 higher and cash is mostly steady.

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(r) | 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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