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Closing Comments

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Closing Comments

Corn weaker today as rain was seen in areas of NE, MN, IA, WI, IL, MI, IN and OH.  Also a small shift in the forecast for wetter weather below the I-80 mark in the corn belt. Heat is still a concern moving forward with no rain expected in the near term.  Ethanol inventories jumped a whopping 4.7%.  We used 106 million bu. for ethanol this week which is a new record.  It’s not uncommon to have peak demand for the year in June but expectations are that the strong demand may continue.

Soybeans set back today with its 3rd consecutive negative close.  Despite NOPA crush numbers showing 152.82 million bu. used up from expectations of 149.7 million bu. and 147.6 million bu. the previous month.  Rosario grain exchange pegged the Argentina soybean crop at 55.3 mln mt.  Soybean traders will continue to weigh their risk between weather and the June 30th crop report expected to show increased acres.

Wheat tried to stabilize today even with reports of very good early yields out of Kansas. Weather ahead should give us an abundance of harvest information with a clear forecast.  Australia increased their 2016/17 wheat output expectations to 25.4 mln mt up from 24.5 mln mt in March.

Cattle were lower on the day and retested the trend line at 113.125 vs Aug.  Show list was larger this week and cash trade came out today from 122 to 125 which is lower than last week’s 128.  Cutout was mostly flat so packers are still enjoying a very healthy margin. Futures and cash getting closer with the lower cash trade this week but futures still about an $8 discount to cash.

Hogs mixed today.  Continued expectations that demand from China with outpace expectations for supply increases from the 2nd to 3rd quarter.  Hot weather also a concern that weights will be lighter moving forward.

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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