Market Update - July 22, 2013

Posted on Jul 22, 2013
CBOT Corn and Soybean futures are trading in opposite directions.  Strong demand for soybean meal (August futures up 3.5%) is driving the market for old-crop soybeans higher, more than offsetting the weakness in soybean oil futures.  Corn futures are trading slightly lower, but the DECEMBER CORN contract is still holding above key chart support of $4.90.  Although rain amounts in the western Corn Belt are disappointing, the turn to cooler weather will help make a lot of corn during the final phase of pollination (occurring later this year).

Chicago wheat futures traded higher overnight but have sold off strongly since the pit opened at 930 am.  Wheat futures are torn between prospects of export business and the weight of falling corn futures.

FYI: As of Friday’s CFTC report, it appears the large spec funds are moderately short CBOT CORN and WHEAT, but very long CBOT SOYBEAN futures.

LIVE Cattle futures are down slightly following last Friday’s Cattle on Feed Report that appeared to come in near trade expectations.   Most analysts are highlighting the large number of heavy-weight feeders placed in feedlots.

LEAN HOG futures are trading higher, extending the rally seen throughout last week.  The large spec funds are near-record long LH futures even as the cash hog market fails to rally. However, August futures are discounted to the latest CME Lean Hog Cash Index of $101.31.   Seasonal trends could begin to work against this trade.

The U.S. dollar is much weaker and continues the downward trend started with the sharp drop on July 10.  A weak dollar usually supports agricultural exports and thus commodity prices. Corn Sep -4 540; Dec -5 496 (493-503)

Bean Aug +26 1517; Sep +23 1349; Nov +14 1288 (1265-1291) Meal Aug +18 500; Dec +7 389 Oil -9 4541

Wheat Sep -7 657; Dec -6 669; Jly -5 685 KC -5 700; MGE -1 749

Oats unch 355

Rice -10 1545

LC Aug -7 12190; Dec -15 12857 FC Aug +75 15300; Oct +42 15762 LH Aug +47 9695; Dec +25 8247 Milk Jly -1 1737; Aug -14 1812

US$ -.5%

Dow +.1% SP +.2% NAS +.3% Tran unch VIX +2.3% 12.83

WTI -.6% Brent -.1% Gas -1.5% NG -3.3% HO -.6% Eth -1.7%

Gold +3% Slvr +5%

5-yr unch 1.30% 10yr -.01 2.48% 30yr -.02 3.54%

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Tagged Post Topics Include: Economics, Market updates