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Closing Comments

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Closing Comments

Corn

Corn pulls back on lack of deterioration of crop conditions and after encountering the lows from June of 2014.

 

Today marks the first of 13 that corn closed lower than it opened.  The corn market has been in an overbought situation and needed more information to keep it going it would appear.   An unchanged crop conditions report form the USDA seemed to slow the buying for the moment and after making a new high on the December chart, profit taking seemed to be the theme throughout the day.  December Corn settled the day down .13 at 4.38 ¾.

Soybeans

Soybeans close lower after posting an 8 month high in the overnight session.

Soybeans led the strength in the opening of the overnight session on the crop condition ratings showing continued deterioration of conditions. The good to excellent category lost 1% putting it just 1% above the 61% average for the date. The state by state breakdown was most telling of the story in the east with IL -4% G/E, IN -4% G/E, KY -3% G/E, OH -3%.

New crop board crush meal margins, while off their June highs – are holding at more than $1.00.

July futures expired today.  August soybeans weren’t able to take out the recent highs and closed down 4 cents at 10.33 ½ and November closed 20 cents off its overnight highs, down 3 ½ on the day at $10.25.

Wheat

Wheat continues to struggle under global supplies and weakness in corn

Futures closed mixed to lower after being higher in the overnight. The overnight probably had more today with new highs in corn and wheat following along than anything else. Wheat reversed quickly today after corn reversed with plenty of reasons for doing so.

 

We continue to have some negative follow through from Friday’s bearish report for wheat showing increased world stocks that were higher than expected. Estimates of world wheat stocks at 219.8 mmt vs 202.4 mmt that they had it June was one of those bearish numbers.

 

The wheat market had a lot of weather premium built into over the last couple of months between our poor weather in the Midwest as well as in Europe.  It is now looking like at least in Europe they may have become too negative as the yields are coming out better than expected and harvest pressure may be taking its toll.  Midwest yields have been very poor but a lot of negative expectations were built in and world stocks are still very large which are lingering over the market.

 

September Chicago lost 4 ¾ closing at $5.71 while KC September lost 6 to close at $5.61 ¼ with the KC – Chicago spread put in new lows.

Beef

Cattle strengthen on weaker corn prices

Cattle futures found support today from the nice break in the corn market as the main motivator.  Feeder Cattle benefited the most from the break in corn, up around $3.00 on the day.  Boxed Beef prices are stronger today, up .63 on choice at $236.63 and up $1.58 on selects at $234.28. 

Pork

Technical buying strengthens hog market

 

Lean hogs finished stronger on support from technical buying spurred by the key reversal from Monday’s trade.  July futures go off the board tomorrow which is causing the August contract to close some of the gap between the current lean index price and the futures price.  Buying interest accelerated midday as the cash is expected to remain firm. 

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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