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Closing Comments

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Closing Comments

 

Corn got less acres today, but to an even greater extent than expected, as the USDA pegged them at 88.0 million. This was almost 1.5 million less than the average estimate, and caught the market by surprise. Will final acres be reflective in June? It all depends on planting season, which for now is tending more cool and wet, not favoring corn acres. December corn shot up to 4.11 ¾ before settling +14 ½ at 4.11 ½. Quarterly stocks were up, but with less acres predicted, planting ahead, and the already known Argentina shortfall, this provided feed for the bulls. USDA weekly corn sales were solid, pegged at 1,640,000 compared to the range of estimates of 1.5-1.9 MMT.

 

Soybeans got the biggest surprise from the USDA, as acres were well under the average estimate of 91.1 million acres at 88.98. This in addition to the Argentina shortfall and meal shortage for end users was a volatile combo, as November soybeans made a new high of 10.49 ¼ before backing off modestly to 10.47 ¾, a gain of +31 ¼ on the day. Soybean quarterly stocks were up, but this did nothing to dissuade bullish mindsets, as the U.S. planting season lies ahead. Buyers continued to pile on to their large net long positions with the new information. The USDA announced a private sale of 266,500 MT of beans to “unknown” destination for 2017/18. On the weekly sales log, soybeans were on the light side, coming in at 387,200 MT vs estimates of 600K-1.0 MMT.

 

Wheat was mixed as the Report gave traders more optimistic news on winter wheat than spring wheat. All wheat acres were estimated at 47.3, which is a million over estimates. However, this difference was made up largely from gains in spring wheat, which bested estimates of 11.5 million acres to 12.6 million. Weekly sales were near the middle of the estimated range of 200K-600K MT, coming in at 475,600 MT. Egypt’s GASC put in a total order of 475K MT in their tender today, likely to be of Russian origin. Chicago +5 ¾, KC +6 ¼ and Minneapolis -10 ¼.   

 

Live Cattle was down sharply, going limit down in June, -3.000. The market is heavily oversold technically, but this was not enough to discourage buyers today. Large supplies continue to win the battle with demand.

 

Hogs were up modestly in the near months, while June and the deferreds were down. April +.325 and June -.075. June had huge gains yesterday, and tried to give some of it back, but selling exhaustion resulted, bringing the market back almost to even. Look for results from the Hogs & Pigs Report later this afternoon to be influential to next week’s direction.

 

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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