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Closing Comments

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Closing Comments

 

Corn traded lower today -3 at 3.42 ¼ (Dec) and -2 at 3.55 (Mar). Steady trade early gradually melted away to a modest sell off into the early noon close. December options expired today, with the largest open interest at the 350 strike and USDA corn exports came in at 1.080 mln mt vs expected 900k-1.4 mln mt. Ethanol production for the week ending November 17 averaged 1.074 million barrels per day which was an all-time high weekly production number.

Soybeans closed lower -4 at 9.93 ¼ (Jan) and -3 ¾ at 10.04 ¾ (Mar).  The lower trade is thought to be driven by both the short trading day and the less than expected export sales/low volume. AgroConsult forecasted that this year’s soybean crop could produce 111 mln mt and added that with good weather conditions could push close to 115 mln mt for Brazil.  October Chinese customs data released soybean imports during the month at 5.856 mln mt, up 12.4% over the same month a year earlier.  Jan-Oct imports totaled 77.306 mln mt, up 15.3% compared to the previous year period.

Wheat traded lower across the complex today. Chicago -7 at 4.15 ¾ (Dec), KC -6 ½ at 4.14 ½ (Dec) and MN -3 ¼ at 6.23 ½ (Dec). USDA weekly export sales came in at 199,800 mt vs expectations of 300k – 600k. Pre-first notice positioning as well as soft export shipments this week has pushed the Dec/Mar spread even wider than -18 ½ that we saw on Wednesday.

Cattle lost ground today with Dec off -0.475 but Feeders gaining +0.575 in Jan. After Wednesday’s close, the cold storage report showed beef at 501 mln lbs which is 102% of September but only 95% of a year ago supplies. China has discussed lowering their import tariffs on US meats soon which will be supportive to demand. More will be known in the next couple weeks.  Look for generally favorable trade the next couple of months on tighter numbers and seasonal demand.

Hogs gained on today’s shorted session with December up +0.425. Chinese import pace has been a bit sluggish. Hopefully the lowering of meat import tariffs will help provide a boost. Carcass weights are running above last year, adding to the current plentiful supply. The cold storage numbers came in just above market expectations, slightly under last year’s report.

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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