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Closing Comments

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Closing Comments

 

Corn had a mild setback to end the week as traders took some profits and a break from building their large net long position, -1 (May) and – ½ (Dec). Managed funds have gone from record short portfolios to large longs in a matter of weeks. Look for Commitment of Traders results later today. Talk today centered around the RFS and RINS, as the Trump Administration is seeking a compromise between Big Corn and Big Oil. One idea to brokering a deal is to push a RINS price cap in exchange for expansion of the E-15 standard.

 

Soybeans saw profit-taking early on but reversed course for another positive finish in May, +3 and a small setback in Nov, – ¾. Traders were concerned that President Trump’s announced aluminum and steel tariffs on imports (majority are Chinese) might result in retaliation. But, for now this is not the case as orders were switched from Brazil to the U.S. due to tightening basis there and farmers holding on to crop as they are feeling more bullish based on reduced yields in the Southern Hemisphere. The USDA announced daily sales of 198K MT to China and 121K MT to “unknown”. Look for Argentine weather reports over the weekend to be very influential to trade next week.

 

Wheat had a large correction today as the CBOT in general is overbought: Chicago -15 ½, Kansas City -9 ¾ and Minneapolis -14 ½. The U.S. Central Plains is not showing any weather forecast changes, so it is likely this is a temporary break. But, today featured profit-taking and there has been a good amount of farmer selling that is also playing a role.

 

Live Cattle fell in spite of great demand as traders are concerned about supplies ahead, -1.150 (April). Exports are strong and well above the four-week average, while big beef production numbers are bringing pressure to the market.

 

Hogs had mixed results as April gained +.600 while the deferreds showed losses. Falling belly and ham prices are weakening the market, but technically it is oversold which could help stabilize prices.

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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