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Closing Comments

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Closing Comments

Crude oil traded lower on EIA monthly supply data showing US total oil demand was off -1% from the previous year (however +0.4% from last month). US crude exports were reportedly off -28,000 bpd from the previous month.

USDA says crop progress report will be delayed until tomorrow. No explanation was cited of why.

Corn

Corn mixed with bull spreading leaving May higher and Dec lower.
Two sided trade in corn following early weakness as the market still looking for sellers willing to take out last week’s lows. CFTC data on Friday will be interesting to see the adjustment of net fund positions following the Thursday USDA report.
Export inspections came in more than 6% above last week at 41.496 mln bushels. This puts corn just under 16% behind last year’s pace at this point.
Cooler, wetter outlook will be likely to impede fieldwork progress over the next couple weeks.
Interior corn basis was steady to firm on slow farmer selling in much of the Midwest.

Soybeans

Bear spreads at work in soybeans on poor export inspections and profit taking.
Soybeans set back today after reaching multi month highs as exports slow and soy meal led the trade lower. USDA export inspections showed soybeans at an anemic 7.532 mln bushels – almost 64% behind last week.
May soy oil in Chicago reached its highest level since June of 2015 as El Nino conditions continue to threaten Palm Oil production. In Winnipeg, canola futures reached a 2 month high.
Funds were reportedly sellers of 5,000 soybean contracts.
Word from the floor said that somebody bought 10,000 1260 x 1400 call spreads on an apparent La Nina bet.

Wheat

Wheat closes softer but off daily lows as crop ratings wait until tomorrow.
Outside commodity weakness in markets like crude oil and copper seemed to weigh on wheat.
Wheat export inspections came in nearly 10% off last week at 11.697 mln bushels.
Crop progress will be out tomorrow with the wheat market expecting a reminder of generally good conditions in wheat despite dryness concerns in the Plains and moisture / cool weather in the soft wheat areas.
European wheat prices rose on concerns about crops in eastern Europe, but good conditions in western Europe are offsetting much of the concern.

Livestock

Cattle trade in narrow range while lean hogs lower on continued fund selling.
Boxed beef cutout values were lower on moderate demand and moderate to heavy offerings. Choice was off $1.60 while Select down $.70.
In Oklahoma City, feeder steers and heifers opened steady to $2 higher with good demand.
Peoria hogs traded steady at $40. June lean hogs led today’s weakness while October was able to close higher.

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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