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Closing Comments

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Closing Comments

Mixed trade in the grains led by hectic soybean spreads and runaway crush margins. Newest run of summer weather maps could show a more benign forecast: hotter than normal, but with average to above average rainfall.

Corn was generally positive today, impressive in the face of how mixed bean trade was throughout the session. General seeding progress is still advancing at a steady clip in areas of the corn belt that have been behind, such as Ohio, Michigan, and Nebraska. This situation seems to be in close balance with the growing adversity in Brazil. There are reports that high domestic prices have spurred some farmers in central Mato Grosso to begin harvest at high moisture to take advantage of the price push. In an interesting turn, the growing situation in Brazil could eventually have a bearish spin, as a Brazilian deputy ag minister was quoted today saying that higher prices could lead to substantially higher corn seeding for the 2016 crop year.

Soybeans had aggressively higher trade during the overnight session, followed by a washout into the day session, and ended with a nearly .15 spread correction favoring old crop beans. Meanwhile, July meal closed $14.60 a ton higher, improving July board crush to nearly $1.33 a bushel. This mark is double what crush was trading as recently as May 2!

Wheat traded mixed with Chicago down slightly and KC slightly positive at the close. The market is slowly starting to turn from macro markets, to focus on weather critical to crop development. Today’s Climate Prediction Center forecast for summer showed a general warmer than normal as widespread throughout the central and western growing regions, but also normal rainfall with above normal predictions for the Western Plains. NOAA’s forecast was in agreement, with predictions of any droughty conditions confined to the Northern Plains.

Cattle traded mixed today in advance of the cattle on feed report, which showed cattle on feed slightly over expectations, placements far above expectations, and marketings slightly lower than expected. Expectations of placements at 99% were shattered with 107% reported, and marketings of 102% expected, reported at 101%. Overall cattle on feed came in at 101% versus 100% expected. All of this could spell some pretty bearish action come Monday.

Hogs were lower again today, taking out the lows of the recent move and filling the break-away gap on the June hog chart at 79.75.

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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