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Closing Comments

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Closing Comments

Wall Street was lower on Wal-Mart’s lackluster earnings while crude came off its earlier highs from EIA information showing a build in US crude inventories.

Corn

Corn closed lower on growing ethanol stocks and profit taking from the recent rally.

Corn supplies and large quantities of farmer ownership continues to hang over the market, but signs of improved export demand and weather premium as spring nears is providing some market support.

Ethanol producers increased inventories by 262,000 barrels, to a record 23.22 mln bbls due to increased weekly grind.

Buenos Aires Grain Exchange forecast pegged Argentina’s 15/16 corn crop at 25 mln mt, compared to a year ago production at 28.2 mln but is above their previous estimate for 15/16 of 24.2 mln.

Traders are expecting USDA’s export sales tomorrow morning to show between 600,000 and 1 million tonnes, up from 346,032 tonnes a week ago.

Soybeans

Soybeans lower on export demand concerns and cooperative South American weather.

Soybeans finished lower today on doubts that demand for US soybeans can hold up to China continuing to switch destinations to South America. The market continues to talk about long wait times at South American ports, but low shipping costs have reduced buyer anxiety to the wait compared to just a few years ago.

South American weather continues to be cooperative for harvest and winter corn planting in northern regions of Brazil.

The Buenos Aires Grain Exchange today kept their current Argentine soybean harvest estimate unchanged at 58 mln mt.

Weekly export sales will be released tomorrow morning by the USDA with trade expectations between 400,000 and 7,000 tonnes.

Wheat

Chicago weakest wheat on halt to short covering and ample global supplies.

Large global inventories, poor export demand for US supplies and lack of outside market support to encourage continued short covering sent the Chicago March contract 6 ¼ lower. Kansas City and Minneapolis was able generally resist selling pressure, closing only incrementally lower.

Reiterating the global supply issue, FranceAgriMer raised its forecast for French soft wheat ending stocks for 15/16 to 6 mln tonnes, up from 5.8 mln last month and the most in 17 years. Strategie Grains raised its forecast for EU 16/17 soft wheat exports to 30.6 mln tonnes, up 1.7 mln from its previous estimate.

Livestock

Cattle higher on hope for cash market support while hogs pop new highs for the move on speculative buying before selling off.

Trade expectations for Friday’s USDA Cattle on Feed report has January placements at 99.6% of last year and Marketings in January at 97.8%.

In hogs, bulls will need to see an improvement in exports as 25% of production leaves the US. Weekly average weights for IA/MN as of Feb 13 came in at 283.4 lb, down from 283.5 the previous week and down from 285.8 lb last year.

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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