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Midday Update



Midday Update

* The September jobs report kept the unemployment rate at 5.1%, but it also showed that the economy only created 142K jobs during the month, which was 60K below expectations. Furthermore, sharp downward revisions were made to the July and August numbers and the labor participation rate fell to 62.4% – a 38-year low.

* The dollar fell sharply following the report’s release on ideas that it will be a long time before the Fed raises interest rates now. The energy sector turned lower as well on ideas that a struggling economy will mean reduced demand for fuel. That initially pulled the rest of the commodity sector lower, but then the commodity indices found buying interest on ideas that a breaking dollar would help stimulate demand for the other commodities. That included providing solid underpinning for grain and oilseed prices.

* Informa is said to have told its clients to expect a corn yield of 168.4 bushels per acre, with soybeans at 47.2 bushels. Prices of both actually ticked slightly higher when the data was released, but the market generally yawned when it saw the numbers.

* The strongest correlation in grain and oilseed prices this morning has largely been with movement of money in and out of the broader commodity indices. Those indices that are weighted more heavily toward the energy sector have struggled more, while the others have seen more support.

* Corn futures are fractionally weaker and 4 cents off their lows on some bargain buying on dollar weakness.

* Soybean futures are down 3 cents after trading both sides of unchanged. Prices are largely back into their previous trading range primarily between $8.65 and $8.90 per bushel.

* Wheat prices are 2 to 3 cents lower on similar dynamics.

* Live cattle futures are 15 to 65 cents higher on a technical bounce this morning after falling $20 over the previous 15 days. Boxed beef prices are mixed. This week’s cash trade has largely been $118 to $124 per cwt on a live basis.

* Feeder cattle are $1.65 to $2.30 higher on a technical bounce on firmness in the fats.

* Lean hog futures held key chart support on Thursday’s break, resulting in a bounce of $0.95 to $1.60 currently. Product prices are modestly higher on slow movement. The cash market is mostly steady to 50 cents 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(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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