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Closing Comments

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Closing Comments

Corn

Light news and holiday volume (lightest volume of the week) continues to be the feature in grains. USDA did announce a sale of 210,000 mt of corn to Japan for 15/16 delivery. Right now the price action doesn’t indicate much concern for SA weather.

Weekly US corn exports came in just a bit above expectations at 35.2 million bushels.

Crude traded in a wide range today as the market absorbs the increased demand with brimming supply but continued reports of wells starting to shut down across the globe. Heating oil is lower on the day as well, but was not able to put in a new contract low following yesterday.

The dollar continues its march higher, putting weekly highs for the 10th week straight as Europe continues with economic struggles and US economic reports continue to be supportive.

Word from the floor is that yesterday funds were net sellers of 7,000 contracts as year-end profit taking was the feature.

White House announced new sanctions against our hermit friends in North Korea. Specifically against their arms industry and intelligence operations for their role in the Sony hack.

Corn bounced off the 50 day moving average and finished the day down 1 ¼ cent in the March contract at 3.95 ¾. December ’15 lost 1 ½ cents to close at 4.19 ½.  

Soybeans

March Soybeans closed decisively below the 100 day moving average on their fourth consecutive day lower.  Four sessions ago, soybean posted a 6 week high – today they put in a four week low.

Very little weather concern from South America for now. Weekly soybean sales came in as expected at 22.4 million bushels. Making the total commitments 1,556 million bushels vs 1,492 last year.

March soybean meal put in its lowest close since November 4th after putting in 6 week highs just four sessions ago. Basis continues to be soft in meal and the calendar spreads are showing signs of weakening.

Soybeans finished its first Friday of 2015 with January down 16 ¾ cents at 10.02 ½ and November 2015 lower by 12 ¼ at 9.93 ¼.

Wheat

Selling continued in wheat as March, like corn, bounce off the 50 day moving average on its third consecutive day lower and came close to matching its December 11th low.

Wheat, being a headline market, has been starving for more Russian wheat news. For now the bears are in charge – running from the top on December 18th.  The cold weather fears seem to be being alleviated by the cold front not lasting as long as feared and some potential snow cover.

Chicago March closed down 8 ½ cents, 6 ½ off its session lows at 5.81 ¼.  KC March was off 10 cents at 6.16 ½ and March Minneapolis ceded its recent strength among the complex to Chicago, closing 9 lower at 6.13.

Beef

Live cattle and feeders were sharply higher on the day following sharp gains in cash trade on Wednesday and corn prices lower.  Good numbers were traded as packers stocked up for the full kill week next week.  In the south, trade was at $166 live, up $4.00 from Christmas week.  Trade in Nebraska was mostly $168 with a trading range of $161-$169.  Dressed trade came in mostly at $265, up $7 from Christmas week.  

 

Choice cutout is down $0.90 at noon, with the select cutout up $0.40 with light volume as the holiday weeks ends.  Packers have had success this week pushing end cuts higher on the seasonal increase in demand.  The big surprise has been higher prices paid for loin cuts and some new buying developing there.  The rib was steady for the week.

 

Feb live cattle are currently trading .2.425 higher at 165.975 while Jan Feeders are trading up the limit at 4.50 at 223.950.

Pork

Hogs were higher today mostly led by spillover buying from cattle.  Cash hogs are mostly steady.  Packers are sitting well into next week as the industry works through hogs backed up from over the holidays.  Next week’s bids are expected to be steady/weak again despite expectations for slaughter above the 2.3 million head mark. 

 

The pork cutout is down $0.63 at noon.  Some sources report that hams appear to have cleaned up somewhat after packers resorted to more aggressive discounts in heavy hams earlier this week.  Bellies are holding steady.    

 

As of this publication Feb hogs are .225 higher on the day at 81.425 while June is .650 higher at 91.325.

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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