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Closing Comments


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Closing Comments

Corn was higher to start the week on the dry-out and warm-up in the short term forecast, adding to the La Nina summer weather fears. Crop Progress this afternoon showed corn 98% planted, 90% emerged and a condition rating of 75% good/excellent vs last week’s 72% rating. Grain inspections for corn showed a bounce back above the 40 mln bushel mark at 42 mln bu, at the high end of market expectations. The US continues to be the most competitive on the global market. Brazil’s tight domestic supplies coupled with their reduced second crop production is aiding the US export position.

Funds have been buyers of corn for 15 of the last 19 trading sessions and continued today buying 15,000 contracts. Technically July corn has made it through the psychological level of 4.20 and will be eyeing 4.30-4.38 as the next upside resistance level if follow through buying can be found.

Soybeans continued their run as the concern over supply disruptions in Argentina are now being augmented by mounting fears over late summer US weather for soybean production. Soybean inspections came in at 3.6 mln bu, off from last week’s pace. Crop Progress showed soybeans 83% planted, 65% emerged and the first condition rating at 72% vs 69% a year ago this week.

Funds were reported to be buyers of 10,000 contracts of soybeans.  Technically the July contract has lost 30 cents of its inversion to November in the last two trading sessions. November soybeans posted a new high close for the run on summer weather concerns, but the weakening of the calendar spreads could be an indication of running out of steam for now.  

Wheat traded higher today, but off early session highs, as the wet European weather and wet southern corn-belt weather builds concern of a drop in crop quality as harvest is on the doorstep for Northern Hemisphere producers. The French consultancy Agritel noted that crop quality concerns continue to mount across the continent with fear growing that the weather will drop most of the European quality to feed grade.

Export inspections came in at 14.3 mln bu, off from last week’s 18 mln bu pace. Crop Condition ratings showed US winter wheat 2% harvested vs the 5 year average at 10%. Winter wheat was rated 62% G/E vs 63% last week while Spring wheat came in at 79% – matching last week.

Cattle gave up early session gains following Friday’s stronger cash sales on profit taking and fund liquidation as today progressed. Last week cash cattle traded for $124, up $2 from the previous week. This morning’s choice beef rose $1.06 from Friday while select cuts drop 39 cents.

Hogs were generally higher, however June came under pressure as the lean hog index has been lower and the June contract expires June 14th. The run up in late summer month hogs has been predicated on the expectation for higher temperatures and higher feed costs combined with a pickup in export demand will work cash prices toward the $90 level.

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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