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Closing Comments

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Closing Comments

The EIA’s weekly energy report pegged total US crude stocks as of April 1st at 1.225 Mln Barrels, down 5 Mln from the week before – but still near record large. Crude has extended the overnight rally following this data and is currently up $2.00/barrel. US ethanol production through the week totaled 287 Mil Gal, down 2 mil from the prior week and right at the average needed to hit the USDA’s target.

Corn

Corn higher for the 4th day in a row on slow selling and technical buying.
The May-July corn spread got to its smallest carry since last summer as cash market demand continues to be strong leading to bull spreading in futures.
Ethanol futures were 1 percent higher after the EIA data showed the stocks of the biofuel declining to the lowest levels since January.

Soybeans

Soybeans recover early losses after soybean oil recovers on stronger energy markets.
Soyoil came back to life after early losses, led by the higher energy markets and the data that was released by the EIA. The turnaround in Soyoil helped the Soybeans turn higher along with support from the 200-day moving average for technical traders.
Informa estimated Argentina soybean production at 59.5 MMTs, up 0.5 from last month but still some 1-2 MMTs below trade guesses. Brazilian soybean production was lowered by 0.8 MMTs to 100.5.

Wheat

Wheat came under pressure on better than expected condition ratings.
Chicago and KC wheat fell to a one week low following the USDA’s Tuesday report showing US winter wheat conditions at 59 percent G/E compared to the five year average 42 percent. The relatively good condition ratings are in contrasts to the ongoing concerns of dry, cold weather in the west and persistent wetness in the Delta and South.
Informa in its monthly crop report estimates US winter wheat production at 1.377 Bln Bu, up 7 Mil from 15/16.
Funds were reported to be sellers of 6,000 contracts in wheat.

Livestock

Cattle recover losses on bargain buying. Hogs higher on up trending pork values.
Live cattle recovered some of Wednesday’s losses on short-covering and bargain buying as April closed $1.40 higher. Futures price discount to early-week cash cattle encouraged buying but doubt about potential gains in cash cattle kept contracts off their highs. So far, southern Plains look to be selling steady to $4 lower from last week.
Boxed beef cutout values lower today on light to moderate demand and moderate to heavy offerings. Choice was off -$1.29 and Select off -$1.77.
Hog futures traded higher as April drew support from upward-trending wholesale pork values and the prospect that fewer hogs might underpin cash prices. Morning wholesale pork price on Wednesday was up 76 cents per cwt from Tuesday. Cash hogs in the Midwest traded 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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