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Closing Comments

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Closing Comments

Commodity Weather Group released its latest summer weather scorecard for June, July, August. The current outlook is warmer and less wet than the previous outlook – with the greatest hot/dry threat for the Midwest still August.

Corn

Corn higher on short covering and expectations of planting progress to come to a halt.

Yesterday’s corn planting progress of 30 percent came in close to trade expectations and nearly double the 5 year pace – regardless weather uncertainty in South America and the anticipation of Midwest rains helped corn find support for the second day of the week and was encouraged by the strong soybean market.  

The front month contract for corn closed just ¾ cent below its session high. It has closed higher 15 of the last 18 sessions.

Funds were estimated buyers of 8,000 contracts in corn.

Soybeans

Soybeans close the November contract with a new high close on this rally on continued technical and speculative buying and higher energy markets.

Weaker US dollar, higher energy markets and continued concern over the adverse South American weather brought technical and speculative buying into soybeans again this week. Closing the November contract at the highest price since January of 2015.

Funds were estimated buyers of 14,000 soybean contracts.

Canola futures in Winnipeg were mostly higher in sympathy with higher US soybean prices and higher Malaysian palm oil futures.

May board crush margin has lost ground from Thursday’s recent highs, closing today at 66.85.  

Wheat

Wheat finds support on continued short covering.

Chicago wheat led the price action today on continued covering of the large shot position as money continues to flow into the grains. The strength in wheat has been in defiance of the higher crop condition ratings, growth of expected EU output and the continued languishing of Euro wheat futures near their contract lows.

Livestock

Cattle higher on short covering while cash price continues to weigh on hog futures.

CME live cattle rallied again today, led by short covering on the sentiment that last week’s selloff ahead of the Cattle on Feed report was overdone. The morning’s mixed rather than lower beef cutout values and better packer profit margins contributed to the futures buying. Last week’s cash cattle in the Plains brought $125 to $128 per head, down from $133 to $136 the previous week.

CME hogs were lower, pressured by cash price uncertainty and futures premiums to the exchange’s hog index.

Closing Market Snapshot

 

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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