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Closing Comments

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Closing Comments

Corn sale of 116,360 mt of corn sold today to an “unknown” destination. Corn exports on the day were 1.56 mt which were just above trade expectations. Conab estimates Brazil crop production at just 76.22 million tonnes down from the USDA estimate in May of 81 million tonnes.  This will open up more possible exports for the U.S.  Despite this friendly information today trade was mostly lower with some slight profit taking before the USDA report tomorrow at 11 a.m. CST.

Soybeans sale of 240,000 mt of soybeans sold to China today.  Soybean exports were a little disappointing at 758,500 mt at the low end of the guesses.  Beans holding support today after yesterday’s big day.  Rains for next week in the forecast expecting 1.5 to 3 inches for much of NE and Southern Minnesota.  Good coverage of over an inch for Iowa.  This may hold the market in check until we see if they actually develop next week.  The question for tomorrow’s report will be do they adjust demand again as Argentina’s crop production number seems to keep dropping. 

Wheat exports for today were 223,800 mt.  This was in the middle of expectations.  Wheat gave up all of yesterday’s gains and seems to be a follower market without the fundamentals to support itself.  Harvest has begun in the South and harvest pressure could appear.  We have been expecting a great wheat crop for a long time though so you have to wonder how much harvest pressure we will really see.  This is still one of the few commodity markets that have a hefty short position, so if corn and beans continue higher wheat could take the lead if the shorts decide to exit.

Cattle market held after yesterday’s big gains.  Short term fundamentals are positive. Futures are a big discount to cash, packer margins are very strong and the show list is tighter.  Will all of this you would expect higher trade.  What is holding it back is the expectation for near record increase in meat supply from the 2nd to 3rd quarter.  If this weather holds up though it may be enough for the short term to win out and push the market higher.

Hogs had lower day today after showing some uncertainty on the last couple of trading sessions. China has bought nearly 40% of our pork exports this year.  We will need to see this strong demand continue with expectations for large supply in the 3rd quarter.

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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