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Closing Comments

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Closing Comments

Corn managed to find support for much of today’s session on expectations for continued strong export demand and uncertainty over the size of the Brazilian corn crop. Technically the July contract was able to trade at its highest level since April 21, but couldn’t hold strength into the close for a new high close. Corn continues to trade in an uptrend – but will need to prove it can hold strength past the 4.00 July psychological barrier. Today’s inability to hold on to session strength coupled with over-bought stochastics will give bulls pause for the short term.

Soybeans lost ground again today, albeit reluctantly, as US plantings continue to progress and participants in Asia and the US stepped back from their long positions. The longest speculative position in a couple years continues to have the market fearful of a setback. On-going uncertainty over Argentine production continues to drive gyrations in the soy meal market led to mixed trade but a higher close in July meal. USDA announced a private sale of 140,000 tonnes of 16/17 soybeans – the second such announcement in two days. Seller reluctance today illustrates the trade hesitation to give up on long positions until there is more confirmation of soy meal topping out. Look for July soybeans to find support tomorrow above 10.41.  

Wheat futures traded an outside day today as the market is caught between concerns over rain risks leading toward harvest, damp conditions in Europe and dryness in FSU spring wheat areas and the weight of the ample current and anticipated supplies.  Currently the market is anticipating the heavier than normal rain accumulating in many wheat producing areas as the crop matures to create nearby support for the market.

Cattle and feeders were lower across the board despite nearby months resistance to selling pressure on the tighter nearby supplies. Much of the weakness has come from technical liquidation following Friday’s bearish Cattle on Feed report. Choice boxed lost 1.05 today while Select was down .33. While cattle were lower, today’s action suggests reluctance to continue to press futures lower. Futures look to be trading a too much of a seasonal discount to cash for futures to sustain significantly lower prices without further weakness in the cash market.

Hogs recovered today across all months, led by June, on the expectation that demand could be better than expected going into the Memorial Day weekend. This morning’s wholesale prices were down $1.14 to $83.01 per cwt from Monday while the average cash hog price in the western Midwest was down 89 cents to $75.80 from Monday.

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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