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Closing Comments

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Closing Comments

Corn

Good weather outlook and lack of fresh news keeps corn in consolidation mode.

While concern over dry weather begins to develop in areas with poor root development, the long fund position liquidation continues to provide a cap on rallies until more define concern develops. By midday, funds were actually buyers of corn, but lack of fresh news contributes to consolidation and light volume

CME Group has lifted its declaration of force majeure at all Illinois River terminals that are regular for CBOT corn and soy futures delivery. CME declared force majeure on June 17 due to high water and flooding that made it impossible for the terminals to load grain.

Report from ADM is that processing profitability in Q2 fell to $204 million from $338 million last year due to compacted ethanol margins.

Today September closed up 2 ¼ at 3.68 ¾, December closed up 2 ¼ at 378 ¾. Charts are oversold and due for a bounce. Yesterday it ran out of sellers below the market, but it has to prove that it can take out Friday’s high.

Soybeans

Moderate weather outlook keeps soybeans in consolidation, but some concerns starting to develop.

While beans were able to close higher, they managed to close well off their mid-day highs. December meal was able hold on to its gains better than soybeans and significantly better than oil. For strength to return to soy, watch for meal to lead the way.

Yesterday the USDA met the market’s expectations by raising crop conditions slightly to 63% G/E. Cooperative weather and moderate temperatures have helped with vegetative growth improve in the past few weeks. However, there are some reports of diseases including Sudden Death Syndrome in Soybeans that are starting to trickle into the marketplace.

November soybeans closed up 6 ¾ at 9.42 ¼ while December meal was up 4.5 at 325.5 and December oil was unable to hold on to gains, closing down .02 at 30.28.

Wheat

Wheat price fails to maintain morning friendship with buyers as trade progressed to close.

Bulls can hang their hat only one thing today; Chicago and Kansas City didn’t put in new lows.

Lack of Aussie concerns (even with expectation of strengthening El Nino) and excellent yield and test weights coming out of spring wheat harvest continue to compound with wheat supplies to keep the market from being able to find any strength.

In the September contracts; Chicago closed down 5 ½ at 493 ¼, KC down 4 at 4.85 and Minneapolis was off 3 ¼ at 5.13 ¾.

Beef

Beef unable to extend yesterday’s strength.

Trade mixed midday ahead of cash sales leaving the market lack of follow through after yesterday’s gains. Small ‘life’ in corn and moderation of strength in lives shows feeder’s price vulnerability.

Midday boxed beef lower, choice 233.18 -0.81, select 227.95 -0.88. Asking prices at 151-152 for lives in the south.

Pork

Demand expectations continues to support hog prices.

Positive cash expectations and firm pork prices help the futures to extend gains.

Midday mandatory FOB plant carcass 89.31 +1.37, bellies 161.75 +2.69.

Closing Market Snapshot

 

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.

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