by Dennis Smith
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Ideal weather conditions into the middle of July continue to weigh on corn prices. As expected, when 340 in the Dec was penetrated it’s quickly moved to the next support of 330. Sources are suggesting that many producers were waiting for “one more rain” before turning loose of their old crop. Well, those rains will be occurring over the next five days across the Corn Belt. If producers turn aggressive sellers of old crop, futures and basis will continue to grind lower. We’re long the Aug corn 335 puts from around 11 cents. Recommend placing orders to liquidate these positions at 20 cents or nearly a double the money on the premium.
The following cash steer trade was reported on the late USDA wire for yesterday. TX 500 at 97 cents, KS 2850 at 95-97, NE 4850 at 95 and 8300 at $155 to $156 in the meat and IA 350 at 97-99 and 3800 at $153 to $156. Negotiated volume stands at 52,200. Weekly beef export sales were excellent at 24,400 MT, up 52% from the 4-week average. South Korea booked 8,200 MT followed by Japan taking 5,900. Lower prices are bringing demand to the beef. Shipments were also excellent at 18,600 MT, up 84% from the 4-week average. Japan shipped 6,400 MT followed by S. Korea shipping 5,400 MT. Open interest dropped by 2850 perhaps as disappointed bullish traders peel away from the first three contracts. Technically, despite the poor close, it was an inside day which makes the action inconclusive. Based upon the expectation of plentiful supplies of heavy weight cattle, peaking demand and a continuation of the erosion in the beef, we’re bearish.
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The risk of loss in trading futures and options on futures can be substantial. The author does not guarantee the accuracy of the above information, although it is believed that the sources are reliable and the information accurate. The author assumes no liability or responsibility for direct or indirect, special, consequential or incidental damages or for any other damages relating or arising out of any action taken as a result of any information or advice contained in this commentary. The author disclaims any express or implied liability or responsibility for any action taken, which is solely at the liability and responsibility of the user. In addition, the author of this piece currently trades for his own account and may have financial interest in the following derivative products: (corn, soybeans, soybean meal, soybean oil, lean hogs, live cattle, feeder cattle).
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This is not a solicitation of any order to buy or sell, but merely a collection of information related to Archer Financial services and commodities trading provided by Archer Financial services. Any statement of facts herein contained are derived from sources believed to be reliable, but are not guaranteed as to accuracy, nor do they purport to be complete. No responsibility is assumed with respect to any such element, nor with respect to any expression of opinion herein contained.
The risk of loss in trading futures and options on futures can be substantial. Each investor must carefully consider whether this type of investment is appropriate for them. Past performance is not necessarily indicative of future results.