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Closing Comments

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Closing Comments

Crude oil was higher on news that OPEC oil output in February fell from the highest production level in history on disruptions in Iraq’s exports and some member disruption issues. EIA data released that US crude oil output in December was off -43k bpd – the third straight month of output declines.

Quite ag markets on slow news as South American weather continues (generally) cooperative and users remain content hand-to-mouth in ownership in the face of large supplies and no weather concerns yet.

Corn

Corn extends losses for fifth session on continued fund selling and lack of buying enthusiasm.
Weekly export inspections came within trade expectations at just over 29 mln bushels. This puts corn pace this week just over 20 percent behind last year’s pace.
China will unveil its new state corn pricing policy in the next few weeks in an effort to revamp their approach to supporting farm income and to begin dealing with the glut of corn supplies. Their current scheme has led to domestic prices 30 to 50 percent over global substitutes, leading to high volumes of imported corn, barley, DDGs and sorghum. Some estimates are for a cut in corn values by 30 percent to get domestic usage going and to stem the imports of replacements.

Soybeans

Soybeans incrementally lower on plentiful supplies, however long oil/short meal spreads look to be unwinding some today.
Soy meal firmed today on short-covering and end user buying while soy oil weakened on technical selling.
USDA reported weekly export inspections at 38.5 mln bushels, right within trade expectations. This puts soybean export progress 8 percent behind a year ago.
AgRural estimates Brazil soybean harvest at 33 percent complete, up from last week 23 percent and a year ago at 29 percent.
The CBOT reported 227 March soybean deliveries, topping the expectation for up to 100.
Technically May soybeans are trading back at the bottom of the range established in late August. Daily stochastics have entered over-sold territory which should stabilize the market if meal can also hold recent lows.

Wheat

Wheat closes marginally higher on the day but finishes March with the lowest close since 2007 on ample supply and cooperative weather.
Export inspections came in at expectations with 13.7 mln bushels. Much better than last week but wheat is still 13 percent off last year’s pace.
Algeria’s grain agency reported it had purchased at least 280,000 tonnes of durum wheat sourced mostly from Mexico and Canada. The North African region uses durum wheat for the staple food Couscous.
European movement of wheat has started to pick up with sales to Egypt, Saudi Arabia and North Africa but the late start to movement will challenge their ability to stay on top of stockpiles set to be the biggest in seven years.

Livestock

Cattle unable to continue last week’s strength as the wild card months of April and May approach.
New trading hours for CME livestock began today as Monday through Friday, 8:30am-1:05pm CT.
Total cattle slaughter last week was at 534,000 head, 1.5 percent higher than the same week a year ago.
Hog slaughter last week was 2.211 mln head, 3.6 percent lower than the previous week and 2.1 percent lower than one year ago.

Closing Market Snapshot

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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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