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Closing Comments


Closing Comments

Energy prices were weaker today as the Saudi oil minister commented they anticipate global demand to use up excess oil supply rather than having to reduce production. The general secretary of OPEC did note though the members would consider taking more steps in three or four months if the freeze agreed to by some members is effective.

South American weather has Argentina drying out after their recent heavy rains while Central Brazil is facing heavy rains over the next five days.

The USDA will issue its acreage forecasts on Thursday at the start of its annual outlook form.


Corn lower on fund and farmer selling as March basis contracts face decision.
Funds press shorts as first notice day nears while farmer selling in SA and the US add to the weakness.
The funds that have been short this market are tired of being short, but the people who bought the market are tired of not being rewarded. There still lacks a weather story to give the market direction and commercials have yet to get scared into covering their needs beyond the month.
Brazil’s CONAB is set to auction off another 150,000 tons of corn from state reserves today in an attempt to cool surging domestic basis as feeding regions remain tight on supply.
Cordonnier raised his Brazilian corn production estimate 800k to 84 mln mt.
Brazilian winter corn crops in Parana and Mato Grosso have been quickly planted and are showing good condition so far.
Technically the front month in corn needs to hold the 3.55-3.58 area. We are still in sideways mode with the bulls and bears playing tug-o-war. Above 3.70 March; look for higher, below 3.55 March; look for lower.


Soybeans lower on soy oil fund liquidation and continued weakness in the meal market.
Soybeans struggle to find direction (as it has for six months) as the market continues to anticipate record South American supplies coming to the market and able anticipated US planted acreage to be announced in the USDA outlook numbers.
Soy oil liquidation on larger than expected Palm oil output.
Cordonnier raised his Brazilian soybean production estimate 1 mln to 99 mln mt for the 15/16 crop.
Technically the soy market continues to trade in tighter and tighter ranges, looking for an eventual break out. For now the buyers run out past 8.85 and sellers get scared past 8.60. Next step is some information or new belief system to throw the well balanced pricing out of balance.


Cooperative weather outlook and search for buyers had Chicago Wheat into new contract lows.
US wheat markets joined today’s weakness out of Europe as ample supplies and lack of threatening weather has the markets continuing to seek price buyers while they wait for supportive headlines.
Ukraine’s grain harvest is likely to fall 10 percent to 52.2 mln tons in ’16 due to decreases in winter grain acreage and poor weather according to UkrAgroConsult. The wheat harvest is likely to decrease to 17.3 mln tons from 24.8 mln in 2015.
Front months led the weakness (bear spread) in today’s wheat trade. KC and Minneapolis have stayed away from new lows but not the case in Chicago as they anticipate higher vomitoxin deliveries.


Cattle higher on jump in wholesale beef expected to support cash prices later this week.
This morning’s wholesale choice beef price climbed $2.19 per cwt to $215.47. Select jumped $2.69 to $212.49. Futures prices, wholesale beef demand and fewer cattle for sale point to steady to better prices for cash cattle. A week ago, packers paid $133-134 for cash cattle.
Lean hogs gained on anticipation of tighter spring supplies and firm wholesale pork values with some packers scheduled to curb production. The morning’s wholesale pork price was 85 cents per cwt higher than on Monday.

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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