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Closing Comments


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Closing Comments

US consumer spending recorded its biggest increase in more than six years in April – another supportive sign of economic growth that could bolster the Fed to raise interest rates in June. The prospect of a jump in the rates from the Fed took the US dollar to its highest level since March 29th.

Corn traded under pressure much of the day on profit taking, farmer selling and weakness spilling over from the wheat market. USDA export inspections were a bit disappointing at 31 mln bu for corn, but follows a seasonal dip in inspections.

Mato Grosso’s IMEA pegged this season’s corn harvest at 21.24 mln mt off -8% from their previous forecast. Noting irregular rainfall as the contributor to the decline in production. Safras Mercado estimated Brazil’s 15/16 corn production at 78.9 mln mt vs last year’s 88.4 mln.

Despite today’s lower trade, July corn was able to add +13 cents for the month of May and saw that contract’s highest monthly close since last September.

Planting progress this afternoon is expected to show near 95% of the US corn crop being planted, near the five year average.

Soybeans lower on profit taking though declines continue to be limited by ongoing concerns over South American supplies. .  

Export inspections came in at the upper end of inspections while USDA export reporting system showed 73,000 tonnes of soybeans for 15/16 sold to ‘unknown’ and 140,000 tonnes for 16/17 to ‘unknown’.

Today was the last trading day of May which saw the July soybean contract gain +48 ¾ cents for the month. The third consecutive higher month.

Wheat was lower across the board following the three day holiday weekend on forecasts for improving harvest conditions for winter wheat and for good spring wheat development. Chicago wheat had its worst performance in more than five weeks. The dry out of the short term forecast helped to alleviate mounting concerns that US maturing crop would be damaged by continued rains.

Heavy rains over the weekend in Germany led to some localized flooding. The wetter European pattern over the 16-30 day could raise the risk for harvest delays and quality declines according to Commodity Weather Group.

Cattle continued their bounce as producers look to be very current with marketings. August cattle have been trading at nearly a $10 discount to cash market compared to the five year average of $3.65, underscoring a somewhat undervalued market.

Hogs finished mixed after early strong trade. The lean hog index is edging down and traders seem reluctant to move into new buying until there can be more confirmation of export progress.

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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