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Closing Comments

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Closing Comments

Crude oil lower ahead of tomorrow’s EIA inventory report while the US dollar fell and treasuries rallied off Fed Chair Yellen’s comments to the Economic Club of NY.

Corn

Corn higher on sympathy strength from wheat and soybeans.
Short fund position squaring as the Quarterly Stocks and planting intentions come out from the USDA on Thursday. Analyst estimates are for a March 1 corn stocks of 7.798 bln bu vs last year at 7.750 while planted acres are expected to be 90 mln acres of corn vs last year of 88 mln. Trade guess range from 89.0 to 92 mln acres.
Chinese officials confirmed the scrapping of their corn stockpiling program to move to a market based approach this fall. The impact on the market seems minimal as this move has been widely anticipated and China has already slowed its US imports of DDGs.
May corn got its first close above the 100 day moving average since the beginning of October. May closed at 3.73, just under the recent swing high of 3.73 ½.

Soybeans

Soybeans climbed to five month highs on technical fund buying.
Continued strength from the Palm oil market trading to two year highs helped the soy oil continued to provide buying in soybeans as funds add to their long positions. Drought conditions from El Nino in Malaysian Palm oil producing regions continue to build fear of lower production.
Canola extended its March rally into one month highs on the Winnipeg ICE exchange on support from the palm oil strength.
The Dec high of 9.17 ½ will be the near term target for May with the October high of 9.29 ¼ the target beyond.

Wheat

Wheat higher on short covering off continued dry plains weather.
Western winter wheat dryness and uncertainty over the extent of damage from cold weather in the Plains provided short covering support in the wheat market despite the good condition ratings yesterday.
The trade is waiting on Thursday’s Quarterly Stocks and planting intentions on Thursday. Trade expectations are for the largest March 1 wheat stocks since 2011 and the smallest wheat acres since 1970.

Livestock

Cattle mixed on wholesale beef demand while hogs find strength.
Boxed beef cutouts were mixed today leaving Choice off $.22 at $225.06 with Select off $.79 to $216.84. Investors expect packers to curb their cash spend due to their return to negative profit margins and uncertain wholesale beef demand.
Fear of stronger corn prices weighed on feeder cattle futures.
Lean hogs gained for the second day on generally quiet trade from short covering and technical buying. Deferred months led as traders bought them while selling the April scheduled to expire April 14. This morning had wholesale pork up 15 cents to $76.45.
Thursday will end first quarter for traders.

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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