* Fund managers were buying the commodity indices on Tuesday, with that tendency carrying over into early-session today as well. However, negative wholesale price data out of China followed by negative data for the United States raised economic worries once again, leading the money to flow out for much of the morning. Wal-Mart added to the concerns when it projected that sales will be flat in 2016, with profits down in 2017.
* Crude oil prices slipped on worries that a slowing global economy would hurt demand, providing a drag for the broader commodity sector, even though the dollar was down to new three-week lows on ideas that there would be no rate hike this year. Crude oil is still modestly lower hovering just above chart support, but money is slowly returning to the commodity indices as crude holds above that support.
* USDA’s daily export reporting service today confirmed more soybean demand. The agency reports that China bought another 8.6 million bushels of this year’s U.S. crop, to go along with the 8.8 million bushels purchased yesterday.
* Corn futures are 3 cents lower after dropping to $3.795 on the bearish slide in commodities earlier today. However, December corn continues to hold above key support at yesterday’s lows of $3.79.
* Soybeans are now a penny higher after being dragged lower earlier today. Support comes from strong demand, with many speculative hedge fund managers trying to unwind short (sold) positions.
* Wheat futures are down 9 cents on the lack of support from the outside markets. However, they are now coming off their lows as money slowly returns to the commodity indices.
* Live cattle futures are $1.675 higher for the lead October contract, while December is $0.55 higher. Packer bids of $125 per cwt on a live basis are starting to emerge in Kansas, which is a bit below last week’s trade of $126 to $127 per cwt. The sense in the country is that this week’s cash trade will be steady to higher. Product prices a $2+ higher this morning, with movement good.
* Feeder cattle are $0.80 to $1 higher on strength in the fat cattle market and renewed demand at the sale barn for lighter-weight cattle.
* October lean hogs are 30 cents higher this morning as cash hogs in the Midwest are steady to $1 higher. Product prices are modestly higher on good movement this morning as well. However, the deferred contracts were 30 to 70 cents lower.
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.
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.
The information contained in this e-mail message is intended only for the personal and confidential use of the recipient(s) named above. This message may be an attorney-client communication and/or work product and as such is privileged and confidential. If the reader of this message is not the intended recipient or an agent responsible for delivering it to the intended recipient, you are hereby notified that you have received this document in error and that any review, dissemination, distribution, or copying of this message is strictly prohibited. If you have received this communication in error, please notify us immediately by e-mail, and delete the original message. Water Street Solutions is an equal opportunity provider. Water Street Solutions is an equal opportunity employer.