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Closing Comments

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Closing Comments

Japan’s central bank announced that they would not expand their stimulus program which sent the yen higher and added to the pressure in the US dollar index – helping the commodity complex through most of today’s session.

 

Seven day rainfall as a percent of normal:

Corn

Corn rallies on better than expected export demand.

USDA export sales report came out this morning at double the market expectation at more than a 100 mln bu for combined old and new crop business – the largest number in four years. Weak US dollar, tight Brazilian supplies and concern over the crop stress on the growing second crop corn in Brazil has put the US back as preferred supplier of corn supplies.

The dry weather in Brazil is anticipated to reduce their winter corn crop by 5 to 10 mln tonnes.

The friendly export activity coupled with short covering by funds have helped the July corn contract to recover half of the losses from the most recent highs set last Thursday.

Upside resistance for now for the July contract will be the Thursday highs at the 4.07 mark.

Soybeans

Soybeans mixed on higher soy meal and lower soy oil.

Soybeans closed off their early session highs with front month losing ground in the spread and closing lower on profit taking after hitting its highest price since last August.

Soybean oil has struggled on weaker palm oil prices and the continued unwinding of long soy meal / short soy oil spreads.

USDA export sales for combined old and new crop were the largest in three months on improved exchange rates and strong demand for US soybeans.

Wheat

Chicago wheat closes slightly higher but KC and Minneapolis aren’t able to hold on in the face of the anticipated bumper crop in the US Plains.

Wheat rallied early on short covering along with the rest of the grain complex on supportive export sales at the highest level since July of 2015 – above the trade expectations.

The USDA Attache to the Ukraine said lower acreage will push 16/17 marketing year wheat to 24.5 mln tonnes, of -10% from last year.

Livestock

Cattle drop on sluggish beef demand while technical buying and cash prices propelled lean hogs higher.

Cattle and feeder cattle futures were sharply lower, both June cattle and May feeders closed down their limit, as poor beef demand threaten to pressure the cash prices as the end of week approaches. Beef cutout values have fallen six days in a row due to plentiful cattle, less-expensive pork and less-than-ideal spring grilling weather in many parts of the country.

Packers bid $123 to $124 for cash cattle with sellers standing at $130.

In hogs, technical buying and IA/MN cash hog price up 28 cents brought buying of futures to the lean hog contracts in Chicago with June leading the way.

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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