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Closing Comments

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Closing Comments

The energy market was able to shrug off the bearish EIA inventory report today which showed total crude inventories up 10.4 mln barrels to a new record of 1,213 mln barrels. This is the fourth consecutive week for an increase.

EPA moved to halt the sale of the insecticides containing flubendiamide, the active ingredient in Bayer’s Belt and Nichino’s Tourismo and Vetica citing environmental risks.

Corn

Corn fractionally higher on bargain hunting but struggles to hold gains on the ample supplies.
News continues to be scarce in the corn market as traders slowly begin their prognostications and positioning for the spring weather outlook. The market is technically oversold and back to recent lows where selling has historically dried up, but for now the global carry-outs are creating a cushion providing headwinds to rallies.

Soybeans

Soybeans higher on support from meal and the continued global demand to China.
FCStone raised their 15/16 Brazil crop forecast to 98.6 mln mt, up 600k from the previous outlook. Informa increased their estimate for Brazil to 101.3 mln mt, up 800k from their previous guess.
China’s soybean imports are forecast to grow 6 percent in the year on higher demand for animal feed. They are expected to buy 83 mln tonnes of soybeans in 15/16, up from 78.35 mln a year ago. Hog margins continue to support the growing feed demand in China.
Funds were reportedly buyers of 5,500 soybean contracts.

Wheat

Wheat finds support on developing dryness concerns in the Plains and bargain hunting.
In the southern Plains, some concern developing that pattern are shifting dryer. Out of 9 correlating El Nino years, only one was dry in the Plains wheat belt and signs are beginning to point to the models beginning to align this year with that dry one in the Plains. According to the Commodity Weather Group the moisture will move north over the next few weeks, leaving the southwestern wheat belt dry.
Egypt bought 180,000 tonnes of Romanian and Ukrainian wheat for an average price of $184.71/mt highlighting how competitive the global wheat trade is right now and the need US producers have for production issues to develop in Europe and/or the Black Sea region.
The CBOT reported hefty deliveries of 525 contracts against the March contract. .

Livestock

Profit taking weighs on live cattle futures.
Cash bids in TX and NE are holding at $136 per cwt vs offers ranging from $140-142. Last week Plains cattle sold at $133 to $137.
Grocers working to be ready for the grilling season to kick in after the early Easter are supporting cash price along with the expectation of fewer cattle in the upcoming weeks.

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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