· At midday, corn is -1 ½, soybeans +1 ½, Chicago wheat unchanged, KC wheat +1, Minneapolis wheat +3, Dec cattle -2.90, Jan feeders -3.35, and Dec hogs -.700.
· Wheat has recovered after trading 5 year lows and soymeal and soyoil are holding up and providing support to soybeans.
· The US dollar has taken out March’s high of 100.380 on today’s strength. European stimulus and expectation of a December hike in US interest rates continues the dollar support.
· Headline numbers in the weekly EIA inventory report showed crude inventories increase 1.2 mln bbl, gasoline stocks flat and distillate stocks jump 3 mln higher. Compared to a year ago this week, crude inventories are 11 percent higher, gasoline 4 percent bigger and distillate stocks 24 percent larger.
· Weekly ethanol data this week was mixed, showing larger than expected drop in production and bigger than expected build in inventory. Production was down 5 percent this week.
· Oil options have become increasingly more expensive as the market waits for the outcome of this week’s Vienna OPEC meeting. Hedge funds have a near record short position of Brent and WTI oil leaving the market at risk of short covering if there is any surprise to production pace. Saudi Arabia has been the most resistant to cuts in production.
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.