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Closing Comments

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Closing Comments

 

Corn overcame a very poor weekly export sales report, + ¼ (Mar). With managed funds in record short position for this time of year, the risk to the downside is limited. The USDA pegged exports at a measly 101,200 MT vs estimates of 600K-1.0 MMT. Corn exports are down 25% on the year. It is thought that the USDA is likely to cut 50 million bushels of corn exports in the report next Friday due to lagging sales.

 

Soybeans got a lift as forecasted South American weather is light on the precipitation and featuring temps in the 90’s and lower 100’s, +3. It is thought that the La Nina weather pattern will persist, which could affect yield potential the second half of the growing season. Soybeans had a poor showing on the weekly export sales log, with a mere 560,800 MT reported vs expectations of 600K-1.0 MMT. It is likely the USDA will trim 25 million bushels off of their annual export estimate.

 

Wheat saw a modest correction for the second day in a row, as it has been trading in a gentle uptrend since mid-December: Chicago SRW -3 ¼, Kansas City HRW -2 ¼ and Minneapolis HRS -1. Like the other grains, wheat weekly exports were down, pegged by the USDA at a paltry 131K MT vs. estimates of 250K-500K MT. It is likely some investors took profits on recent gains, with warmer Central U.S. weather in the forecast.

 

Live Cattle took a plunge below the 100-bar moving average, lock limit down, -3.000 (Feb). Coming into today’s session, cattle were considered slightly overbought. Long liquidation selling dominated the trade, with brutal winter storms on the East Coast and cold temps in the Midwest slowing down restaurant business and beef demand in the near-term.

 

Hogs were mixed, eking out a small gain in the February contract, +.050. Supply fundamentals continue to be weak and the market is being held up by temporary supportive forces. However, firm pork cut-out values and warmer Midwest temps on the way are helping to keep the bears at bay. 

 

Closing Market Snapshot  

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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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