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Midday Update

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Midday Update

* Crude oil turned encountered profit taking after coming within 2 cents of its 200-day moving average early today at $50.94 per cwt. The pullback from its highs led to profit taking in the major commodity indices as well, erasing overnight gains in the grain and oilseed complex. The dollar though continues to trade near the three-week lows set overnight on expectations that a Fed rate hike is a longtime in the future.

* USDA’s daily export reporting service this morning confirmed that China bought another 13.2 million bushels of U.S. current-year soybeans.

* USDA released its highly anticipated October crop report at 11 a.m. CDT this morning, which now becomes the base for the next month or so of trading. Key numbers in the report were as follows:
U.S. New-Crop Ending Stocks

2015-16

Wheat

Corn

Soybeans

billions of bushels

USDA October 9

0.861

1.561

0.425

Average Trade Estimate

0.819

1.534

0.414

Highest Trade Estimate

0.891

1.750

0.475

Lowest Trade Estimate

0.765

1.339

0.300

Previous USDA Estimate

0.875

1.592

0.450

Water Street Solutions

0.846

1.130

0.259

U.S. Yields & Production

2015-16

2015-16

Corn

Soybeans

Corn

Soybeans

Yield in bushels per acre

Production in billions of bushels

USDA September 11

168.0

47.2

13.555

3.888

Pre-Report Estimates

Average Trade Estimate

167.100

47.200

13.504

3.908

Highest Trade Estimate

169.500

47.700

13.798

3.975

Lowest Trade Estimate

165.000

46.500

13.283

3.830

Previous USDA Estimate

167.500

47.100

13.585

3.935

Water Street Solutions

165.000

46.800

13.382

3.887

* Corn futures are down 2 cents after USDA cut corn acreage by 400K and boosted the yield to 168 bushels per acre.

* Soybean futures are 3 cents higher after USDA cut 900K acres from soybeans acreage, while boosting crush 10 million and cutting exports by 50 million despite a surge in Chinese buying over the past 6 to 8 weeks.

* Wheat futures are a penny lower after USDA slashed 50 million bushels from exports and 20 million from feed usage, raising ending stocks to a burdensome 861 million bushels.

* Live cattle are $1 to $1.25 lower after December bumped against resistance at $138. Offers and asking prices are still far apart at $118 to $130 per cwt. However, some support coming from chatter that a major raised their offer to $126 in Nebraska. Product prices are mixed on good movement.

* Feeder cattle are 80 cents higher, getting a boost from a higher corn yield estimate from USDA that eases fears of higher corn prices, along with trade chatter suggesting that fat cattle may be firming in the country.

* Lean hogs are 30 to 65 cents higher on good demand, although the supply is big as well. Cash hogs are mostly steady once again. Product prices are weaker on slow movement this morning.

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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www.waterstreet.org
or 1-866-249-2528

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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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