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Closing Comments

 

Corn traded lower on the day closing -3 at 3.46 (Sept) and -3 at 3.60 (Dec). There were varied results from the first day of the Farm Journal Tour. Ohio corn yield came in at 164.6 bpa vs. last year’s 148.9 bpa. Ohio soybean pod count averaged 1,107 vs. 1,055 last year. South Dakota corn yield at 147.7 bpa vs. last year’s 149.7 bpa. South Dakota soybean pod count 899.5 vs. 970.6 last year. On the western leg of the tour, scouts pegged Southeastern Nebraska corn yields at 171.2 bpa for five yields in Adams, Webster and Nuckolls counties. Scouts moving through Indiana suggest yields are widely variable. Estimated corn yields across Boone, Hamilton and Hendrick counties came in at 168.7 bpa. That is below last years, 176.1, but above the three year average of 167.4. The USDA conditions report came in at 62% good to excellent 26% fair and 12% poor to very poor. No adjustment from last week.

 

Soybeans made small gains today closing +1 ¼ at 9.33 ¾ (Sept) and +1 ¼ at 9.37 ½ (Nov). November soybean selling interest seems to have dried up for the time being. If the Farm Journal Tour discovers some problematic areas in Indiana and Illinois, a technical bounce could unfold. USDA condition reports show conditions 60% good to excellent, 28% fair and 12% poor to very poor vs. last week 59% good to excellent, 29% fair and 12% poor to very poor. Illinois, Indiana and Missouri all saw 3% declines in good to excellent ratings and Ohio is down 1%. Blooming progress is at 97% complete (last week 94%), compared to 98% a year ago and soybean pods progress at 87% complete (last week 79%) compared to 88% a year ago.

 

Wheat, like other grains, closed lower today -7 ¼ at 4.02 ¼ (Chicago Sept). Kansas City and Minneapolis followed suit closing -8 ¾ and -14 respectively. December hard red wheat has set a new contract low in three of the last four sessions. The sheer size of the Russian crop continues to pressure prices down to oversold conditions. Spring wheat harvest progress is 58% complete (last week 40%) compared 63% a year ago. USDA conditions report put wheat conditions 34% good to excellent, 24% fair and 42% poor to very poor vs. last week’s 33% 25% and 42%.

 

Live Cattle ended a four day price decline closing +.725 at 106.725 (Aug) and +1.875 at $107.725 (Oct). The threat of long liquidation selling is still present; however, a short-term low cannot be ruled out, especially if there is a lull in the markets. February cattle experienced a hook reversal on Friday followed by an inside session yesterday and should see some support early this week.

 

The Hog market is on a sharp break trading lower for the fifth consecutive day closing -.800 at 63.875 (Oct). Seasonally strong upswing in production is helping to pressure, but the slaughter pace in not increasing as much as believed. Last week, slaughter was up 1.6% from last year as compared with trade expectations for a 3.5% to 4.0% increase. Bears will be watching for slaughter to pick up as the discount of futures to cash is not likely to widen any further without help from a jump in production.

 

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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