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Closing Comments

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Closing Comments

 

Corn closed –4 ¾ @ 416 1/4 (Dec18). Corn is following suit with the rest of the grain sector today. Good weather over the last week for planting progress and better rains expected for the dry areas of Brazil is taking away from the positive momentum we have seen. USDA report this Thursday is expecting tightening old crop stocks around 2.177 billion bu. vs. 2.182 currently and 1.628 billion bu. for new crop stocks. China sold 1.96 million tonnes of corn out of 4 million offered from state reserves. An additional 8 million will be auctioned off next week. Traders are expecting to see planting progress come in at 35% today compared to the 5 year average of 44%.

 

Soybeans closed -17 @ 10.20 1/4 (Nov18). Traders expect to see old crop stocks on soybeans tighten in the upcoming report as well but only marginally. Average trade guess is 541 million bu. vs. the current estimate of 550 million bu. New crop estimates even with reduced acres expected to be 435 million bu. because of lackluster demand. Planting progress is expected to come in at 10% vs. average of 14%. Chinese demand fears continue as they have cancelled some sales in the past few weeks. We are entering a time frame where China purchases most of its soybeans from South America.

 

Wheat closed -16 1/4 @ 5.26 ¼ (Jul18). Wheat sets back on lack of new story in the U.S. and some rain relief for the Black Sea region and Australia. This market needs constant headlines to keep its momentum. The report this week is expected to show an increase in old crop stocks with slow demand. The big story for this report will be the expected new crop stocks number.

 

Live Cattle followed the negative grain market trend today closing -.725 @ 105.325 (Jun18). June futures have been pressed to a pretty steep discount to cash at this point so a downturn is already priced in to the market. We have a large supply as we all know but demand has been exceptional as well. If we get any steady action in cash it would seem futures are over sold.

 

Hogs closed +.55 (Jun18). Increased demand and improving packer margins are providing support. We showed you yesterday that March exports hit a record high for any month and up 2.7% from last year. South Korea imports jumped to 87.7 million lbs. from 66.9 million last month.

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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