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Closing Comments

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Closing Comments

 

Corn saw strong buying today in both old and new crop, with May +1 and Dec +2. Technical chart action was positive after yesterday’s reversal, as Dec corn forged a new high. Will corn be able to buy more acres as we move closer to the month end intentions report? The biofuel meeting scheduled for yesterday between lawmakers and industry leaders was postponed indefinitely, as RINS remain a hot topic of conversation. Ethanol demand is strong along with exports, so stay tuned for the EIA ethanol reporting tomorrow. In daily sales, South Korea was in for 210K MT of optional origin corn.

 

Soybeans led the grain complex today, as chart action seemed to be at a decision point for higher or lower, May +7 ¾ and Nov +8. March futures expire tomorrow which has helped the weekly charts as they are rolled. The uncertainty over Argentina’s production continues to dominate the headlines. Renowned crop scout, Cordonnier downgraded his Argentine soybean estimate to 43 MMT from 45 MMT, while leaving Brazil unchanged. Look for February NOPA Crush numbers tomorrow – estimates range from 148-150 mbu compared to 163.1 mbu last month and 142.9 last year.  

 

Wheat traded both sides in over a ten cent range, with July finishing –3 (Chicago). Kansas City rounded out the winter wheats -1 ¾ (July). Winter wheat conditions released yesterday afternoon showed Kansas declining modestly while Texas and Oklahoma both showed improvement over last week. Minneapolis featured a “shooting star” on the chart, indicating that early buying was not able to be sustained throughout the session, as spring wheat finished – ¼ (July). Russian Black Sea wheat continues to appreciate in value, up a Dollar from last week. However, recent gains in U.S. prices are keeping exports less than competitive.

 

Live Cattle were up in April, but down in subsequent months, +.350 (April). The USDA Report last week predicted the largest ever increase in beef production from one quarter to another. This is not exactly a bullish recipe, as speculators have continued to liquidate long positions. Technically, the market is starting to cross over into oversold territory.

 

Hogs also have become oversold, and this helped to trigger a bounce today, +.050 (April). The market is relieved that Mexico and Canada are exempt from steel tariffs as they are a large part of U.S. pork exports. According to Hightower, Mexico takes 22% of all U.S. pork.

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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