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Closing Comments

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Closing Comments

 

Corn was mixed but succumbed to negative pressure from the other grains, – ½ (Dec). Wheat has been driving the corn market of late, along with heightened concerns that Brazil’s second crop could see a yield reduction in Parana. However, it has been reported that subsoil moisture is still adequate in S Brazil. Planting is continuing in earnest in the U.S., as some IL farmers are 75-95% planted. EIA Ethanol data showed weekly production up 4.77% vs last week and 4.67% over last year. Stocks were up 2.03% compared to last week and down 4.61% from last year. Corn used for ethanol was a solid 107.53 mbu, well over the 103.453 mbu needed to meet the USDA annual projection. With slowing ethanol export demand from Brazil and China, will ethanol stocks climb in the weeks ahead?

 

Soybeans saw short-covering and profit-taking, finishing the session poorly -9 ¾ (Nov). The world is watching as trade representatives from the U.S. and China face off today in Beijing. Some type of press release regarding progress is expected tomorrow. Trade is nervous about a potential impasse or delay that could continue to put a lid on Chinese buying. Soymeal has been helping to lead the recent soy rally, but meal took a step back today while oil bounced. No new daily export sales were announced this morning. The next important date on the calendar is the May WASDE Report on the 10th.

 

Wheat saw short covering early, as funds balanced positions with less-than-positive conditions not only in the U.S. Plains, but Australia and the Black Sea Region as well. The market rebounded off of overnight lows that followed the re-opening of the European markets after the May Day Holiday before fading late session. A negative factor is the rising U.S. Dollar, and its negative relationship to price competitiveness on the global scene. Look for more reports through the rest of the week from the Kansas Wheat Tour to influence trade. Kansas is the focal point as it has the highest concentration of hard red winter wheat. An initial assessment of Oklahoma’s HRW was dismal, with abandoned acres seen as high as 46%. Chicago SRW -2 ½, Kansas City HRW +2 ¼ (July) and Minneapolis + ¾ (Sept).

 

Live Cattle had a pullback in June and August, while gaining in the deferred months. June ended -.975. The long-term trend is negative but strong demand and a steady, firm cash market should help support the near-term.

 

Hogs gave back some of yesterday’s gains, -.400 (June). The CME index has continued to gain on June futures, cutting the premium held by June down to $11. If NAFTA is resolved soon, with large supplies now built into the market, there could be upside potential  for a bounce ahead.

Closing Market Snapshot  

 

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