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Closing Comments

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Closing Comments

Energy prices came under pressure from the EIA report showing crude inventories jumped 9.4 mln barrels, gasoline stocks were off 4.6 mln while distillates jumped 1 mln.

Ethanol data was more positive with a small cut in production and a small draw on stocks to a six week low. Ethanol futures erased recent losses, closing up more than 4 cents on the day.

Corn

Corn trades lower on technical selling, weakness in Chinese corn futures and a stronger US dollar.
Corn traded lower for most of the day on pressure from wheat, fund selling and lower futures prices out of China on concern over the government releasing excess stockpiles below market prices starting April 1st.
In South America, the Argentine farmer is planning on harvesting a record 27 mln tonnes of corn this season, up from 33.8 mln in 14/15 according to their government.
Funds sold 6,000 contracts of corn, defending their current large short position. However, slow farmer sales and weather uncertainty couldn’t keep the market down – allowing the market to recover much of the early session losses in the last two hours of trade.
May corn resisted at the 3.70 area for all of today’s trade, but was able to close in the top half of today’s trading range – maintaining the closes above the 50 day moving average now for the 8th consecutive session.

Soybeans

Soybeans succumb to profit taking after yesterday’s five month high trade.
Concerns over export demand on talk of Chinese cancellations of Brazilian cargoes, higher US dollar and falling energy prices weighed on the overbought market today which has recently seen the weakening of cash markets.
Soy oil sold off on lower energy and veg oil markets while soymeal was able to stay steady to firm. The ability to soymeal to hold on will be important to the soybean market to see.
USDA export sales report will be out tomorrow morning.
Bear spreads were active as the November continues to work to protect planted acres versus corn. The May contract was able to close for the second day in a row above the 200 day moving average, trading the entire day inside yesterday’s range.

Wheat

Wheat lower on strength in the US dollar index and reduced weather fears.
The stronger dollar coupled with reduced concern over weather damage in the HRW production areas had the Kansas City contract lead the complex lower.
The May Chicago contract continued its trade below the 50 day moving average while Kansas City May support on top of the 50 day while Minneapolis continues to perform the best as spring wheat planting nears.

Livestock

Cattle and feeders continue sell off on anticipation of lower cash prices, Hogs generally mixed.
Boxed beef cutout values were lower on Choice by -$1.73 while Select was able to at $0.15. Packers in Kansas bid $135 per cwt for cash cattle that sellers were pricing at $141. Most of the cash cattle in the Plains brought $139 last week.
The Hog market will get USDA’s quarterly Hog & Pig report tomorrow at 2:00pm CT. Analysts are expecting a small increase in the hog herd during the December – February quarter versus a year ago.
Morning wholesale pork prices was up 17 cents per cwt while cash hogs held steady.

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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