DTN Morning Comments on Livestock

Lean Hog Paper Likely Open Higher

Look for lean hog futures to open moderately higher this morning, supported by midweek short covering and improving carcass value. On the other hand, the cattle pits will probably start trading on a mixed basis thanks to cautious positioning ahead of more definitive cash and product news.

By John Harrington DTN Livestock Analyst

Cattle: Steady-$1 HR Futures: mixed Live Equiv $130.92 – 0.10* Hogs: Steady-0.50 HR Futures: 10-30 HR Lean Equiv $109.35 +$1.24** * based on formula estimating live cattle equivalent of gross packer revenue ** based on formula estimating lean hog equivalent of gross packer revenue

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The risk of trading futures and options can be substantial. Trading foreign exchange carries a high degree of risk, and may not be suitable for all investors. All information, publications, and reports, including this specific material, used and distributed by Sweet Futures 1, LLC shall be construed as a solicitation. Sweet Futures 1 does not distribute research reports, employ research analysts, or maintain a research department as defined in CFTC Regulation 1.71. This website contains information obtained from sources believed to be reliable, but its accuracy is not guaranteed by Sweet Futures 1. Past performance is not necessarily indicative of future results.

DTN Morning Comments on Grains

Grains Mixed Early Wednesday

Corn futures are unchanged at 6 a.m. CDT; soybeans higher; wheat higher.
By Darin Newsom
DTN Senior Analyst
6:00 a.m. CME Globex: Corn unchanged, soybeans 2 cents higher (November), and
wheat 1 cent higher.
CME Globex Recap: Grains posted a relatively quiet overnight session with
only soybeans establishing a double-digit trading range. However, soybeans were
near session highs early Wednesday morning while corn and wheat were near
mid-range. Outside commodities were mixed as the U.S. dollar index showed a
small loss and Dow Jones Industrial Average futures posted a small gain.

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The risk of trading futures and options can be substantial. Trading foreign exchange carries a high degree of risk, and may not be suitable for all investors. All information, publications, and reports, including this specific material, used and distributed by Sweet Futures 1, LLC shall be construed as a solicitation. Sweet Futures 1 does not distribute research reports, employ research analysts, or maintain a research department as defined in CFTC Regulation 1.71. This website contains information obtained from sources believed to be reliable, but its accuracy is not guaranteed by Sweet Futures 1. Past performance is not necessarily indicative of future results.

DTN Morning Comments on Cotton

Cotton Creeps Quietly To Slight Gains

U.S. crop conditions improved and drew even with a year ago. Cash sales increased on The Seam.
By Duane Howell DTN Cotton Correspondent

Cotton futures crept to slight gains in quiet dealings Tuesday after finishing in the red two sessions in a row.
Benchmark December hovered up 14 points to 84.85 cents at 7:52 a.m. CDT, trading within a tight 57-point range from 85.22 to 84.65 cents on a contract volume of 1,133 lots. March edged up 11 points to 82.82 cents.
In outside markets, Dow Jones futures gained 39 points and S&P futures 5 points, while dollar index futures eased off 0.023 to 81.740, crude oil dropped 95 cents to $103.60, Brent crude slipped 32 cents to $107.13 and gold gained $2.30 to $1,321.60. Grains were higher.
China’s Zhengzhou cotton futures settled mixed, up 20 yuan or 0.10% in September, up 90 yuan or 0.46% in November and up 110 to down 80 yuan in the other contracts. Prices also closed mixed on the China National Cotton Exchange, while the China Cotton Index continued to slide.
U.S. crop conditions improved during the week ended Sunday, with good to excellent up a percentage point to 45%, fair also up a point to 33% and poor to very poor down two points to 22%, USDA reported.
The DTN cotton condition index improved to 103 from 94 a week earlier and drew even with a year ago. This was up from the low for the season of 90 as of July 14.
Ratings rose in Texas as excellent held at 4%, good gained six points to 28%, fair was steady at 36%, poor dropped two points to 19% and very poor slid four points to 13%. The DTN index for Texas climbed to 59 from 37 a week earlier but was down from 68 a year ago.
Conditions also improved in Arizona, Kansas, Oklahoma, Tennessee and Virginia; held steady in Louisiana, Mississippi and Missouri; and declined in Alabama, Arkansas, California, Georgia and the Carolinas.

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The risk of trading futures and options can be substantial. Trading foreign exchange carries a high degree of risk, and may not be suitable for all investors. All information, publications, and reports, including this specific material, used and distributed by Sweet Futures 1, LLC shall be construed as a solicitation. Sweet Futures 1 does not distribute research reports, employ research analysts, or maintain a research department as defined in CFTC Regulation 1.71. This website contains information obtained from sources believed to be reliable, but its accuracy is not guaranteed by Sweet Futures 1. Past performance is not necessarily indicative of future results.

Market Update with Mike Kuta " The Squawk Trader "

July 30, 2013
Bank Revenues Surge on Trading Over What Fed Will Do.
Diverging monetary policies are creating ideal conditions for banks to make money from trading currencies as Credit Suisse Group AG to Goldman Sachs Group Inc. say rising volatility is boosting earnings. “If there’s higher volatility, there’s higher volume and higher opportunities for us to generate revenue,” Bernie Sinniah, the London-based global head of corporate foreign-exchange sales at Citigroup Inc., the second-biggest currency trader, said in a phone interview. Volumes in the biggest financial market jumped to a record $5.7 trillion a day in June, according to the latest data from CLS Bank, which operates the world’s largest foreign-exchange settlement system. Deutsche Bank AG and Barclays Plc, which had the highest revenue from currency trading in 2012, published results today while HSBC Holdings Plc reports in the next week. While the Federal Reserve said it plans to reduce the money it pumps into the U.S. economy should a recovery take hold, the European Central Bank is considering additional stimulus and the Bank of Japan announced four months ago an unprecedented bond-buying program. The JPMorgan Global FX Volatility Index jumped last month to the highest level since June 2012.
Stricter Rules:
The rise in price swings should bolster banks’ profits at a time when stricter regulations after the financial crisis threaten earnings from other divisions. The Basel Committee on Banking Supervision’s latest rules, known as Basel III, will force the world’s 101 largest banks to set aside additional capital to cushion against potential losses from businesses such as fixed-income. “Foreign-exchange, which isn’t a heavy consumer of risk-weighted assets or balance sheet, will become more important,” George Athanasopulous, the co-head of global foreign exchange at Zurich-based UBS AG, which reported second-quarter earnings today, said in an interview. “Stringent capital requirements will reduce the footprint of businesses which rely heavily on risk-weighted assets and balance sheet.” Frankfurt-based Deutsche Bank, the biggest foreign-exchange trader, earned the most from this business in 2012 at about $2.7 billion, while Barclays in London received $1.8 billion, according to JPMorgan Chase & Co. estimates on June 28.
‘Significantly Higher’
Both banks reported earnings today. London-based HSBC, which posts results on Aug. 5, was the third-biggest recipient of foreign-exchange revenue last year, JPMorgan estimates. Deutsche Bank, continental Europe’s biggest lender, said second-quarter revenue from foreign-exchange trading rose on increased price swings and greater client activity. Overall profit fell 49 percent to 334 million euros ($443 million), from 656 million euros in the same period a year earlier. UBS, the fourth-largest currency trader, said that increased volatility caused a decline in second-quarter earnings from its foreign-exchange business. Revenue from currencies, rates and credit fell 42 percent to 362 million Swiss francs ($389 million), from 619 million francs in the first three months of this year, UBS said. The investment bank posted a pretax profit of 775 million francs, compared with a 92 million-franc loss a year earlier. Goldman Sachs, located in New York, said this month that its currency-trading operation had “significantly higher” revenue in the second quarter than in the year-earlier period. Like most of its peers, the investment bank doesn’t break out foreign-exchange earnings.
‘Strong’ Activity:
“Activity levels in our currency business remained strong as clients reacted to increased volatility, particularly in Asia,” Chief Financial Officer Harvey Schwartz said on a conference call with analysts. Most banks lump earnings from their fixed-income, currencies and commodities divisions together. Foreign-exchange trading for Group of 10 and emerging-market nations accounted for 15 percent of fixed-income revenue, or about $14 billion, for the 10 largest banks in 2012, according to an estimate from analytics firm Coalition. That’s down from 22 percent in 2011 when most rates and credit operations lost money, Coalition said. U.K. currency-trading volumes rose to a record $2.55 trillion a day in April, 26 percent higher than in October, the Bank of England said yesterday, citing a twice-yearly survey.
Weaker Yen:
The increase was aided by a “substantial” jump in trading of the dollar against the yen, which more than doubled, the central bank said. Japan’s currency has weakened 11.5 percent against the greenback this year. JPMorgan’s foreign-exchange volatility index surged to 11.96 percent on June 24, from 8.07 percent at the end of last year. At 9.7, the gauge is now up 20 percent for the year. Fed Chairman Ben S. Bernanke stoked the surge in volatility when he raised the prospect of the U.S. central bank reducing its $85 billion of monthly bond purchases later this year.In the euro region, ECB President Mario Draghi said he plans to keep the benchmark interest rate at a record-low 0.5 percent for an “extended” period, and that he’s considering additional measures to boost the economy of the 17-nation bloc. The Bank of Japan refrained from adding to its unprecedented monetary stimulus earlier this month and raised its assessment of the nation’s economy, referring to a recovery for the first time since before a record 2011 earthquake. Credit Suisse, Switzerland’s second-biggest lender, said July 25 that increased currency volatility helped boost second-quarter earnings. “Revenues from foreign exchange improved as higher market volatility led to increased client activity,” the Zurich-based bank said in a statement.

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The risk of trading futures and options can be substantial. Trading foreign exchange carries a high degree of risk, and may not be suitable for all investors. All information, publications, and reports, including this specific material, used and distributed by Sweet Futures 1, LLC shall be construed as a solicitation. Sweet Futures 1 does not distribute research reports, employ research analysts, or maintain a research department as defined in CFTC Regulation 1.71. This website contains information obtained from sources believed to be reliable, but its accuracy is not guaranteed by Sweet Futures 1. Past performance is not necessarily indicative of future results.

DTN Morning Comments on Grains

And Now For Something Completely Different — Grains Higher Early Tuesday

Corn futures are higher at 6 a.m. CDT; soybeans higher; wheat higher.
By Darin Newsom DTN Senior Analyst
6:00 a.m. CME Globex: Corn 3 cents higher, soybeans 2 cents higher (November), and wheat 3 cents higher.
CME Globex Recap: It has basically been a week since grains posted a higher overnight session, with even the bean complex posting modest gains early Tuesday morning. This despite the generally lower commodity markets as the U.S. dollar index is rallying.

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The risk of trading futures and options can be substantial. Trading foreign exchange carries a high degree of risk, and may not be suitable for all investors. All information, publications, and reports, including this specific material, used and distributed by Sweet Futures 1, LLC shall be construed as a solicitation. Sweet Futures 1 does not distribute research reports, employ research analysts, or maintain a research department as defined in CFTC Regulation 1.71. This website contains information obtained from sources believed to be reliable, but its accuracy is not guaranteed by Sweet Futures 1. Past performance is not necessarily indicative of future results.

DTN Morning Comments on Livestock

Meat Futures Set for Mixed Opening

Cattle pits should start with uneven price action tied to follow-through buying on one hand and uncertain fundamentals on the other. Lean hog contracts are also expected to open on a mixed basis as traders struggle with whether the board is discounted too much or not enough.
By John Harrington DTN Livestock Analyst
Cattle: Steady-$1 HR Futures: mixed Live Equiv $131.02 – 0.41* Hogs: Steady-0.50 HR Futures: mixed Lean Equiv $108.11 + 0.45** * based on formula estimating live cattle equivalent of gross packer revenue ** based on formula estimating lean hog equivalent of gross packer revenue

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http://sweetfutures.com/2013/dtn-morning-comments-on-livestock-live-cattle-feeder-cattle-and-lean-hogs-5/

The risk of trading futures and options can be substantial. Trading foreign exchange carries a high degree of risk, and may not be suitable for all investors. All information, publications, and reports, including this specific material, used and distributed by Sweet Futures 1, LLC shall be construed as a solicitation. Sweet Futures 1 does not distribute research reports, employ research analysts, or maintain a research department as defined in CFTC Regulation 1.71. This website contains information obtained from sources believed to be reliable, but its accuracy is not guaranteed by Sweet Futures 1. Past performance is not necessarily indicative of future results.

DTN Midday Comments on Grains

Mixed Grain Trade at Midday

Grain trade is fairly quiet at midday with mostly lower trade.

By David Fiala DTN Contributing Analyst
Grain General Comments
The U.S. stock market is lower with the DOW futures off 64. The interest rate products are lower. The dollar index is 8 higher. Energies are narrowly mixed. Livestock trade is mostly higher. Precious metals are higher with gold up $10.
CORN
Corn trade is 1 to 3 lower at midday in slow trade. December futures have seen trade from 3 higher to around 5 lower. A new low for the move has been seen keeping the downtrend in place. The weather forecast remains cool, with some moisture for the driest areas. Outside markets are pretty neutral this morning, so little to talk about of significance. The chart picture is negative, the December 10-day is up at $4.91 which is the first notable chart resistance, now that we slipped below $4.75, $4.50 is the next notable support. The weekly export inspections were in the low but in the middle part of expectations at 11 million bushes. Crop ratings this afternoon are expected to remain pretty steady thanks to the cool weather, although maturity will continue to lag.

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The risk of trading futures and options can be substantial. Trading foreign exchange carries a high degree of risk, and may not be suitable for all investors. All information, publications, and reports, including this specific material, used and distributed by Sweet Futures 1, LLC shall be construed as a solicitation. Sweet Futures 1 does not distribute research reports, employ research analysts, or maintain a research department as defined in CFTC Regulation 1.71. This website contains information obtained from sources believed to be reliable, but its accuracy is not guaranteed by Sweet Futures 1. Past performance is not necessarily indicative of future results.