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Closing Comments

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Closing Comments

Corn closed today down just a ¼ cent after spending most of the day in positive territory.  The Euro weather model added heat for the early part of July in the overnight which shot the market up outweighing the crop conditions being unchanged yesterday afternoon.  Crop ratings to this point would tell you the crop is in terrific shape.  Concern is obviously still out there though on if this will continue if heat for July holds up and we miss a rain.  June 30th stocks report on Thursday will be closely watched to see if the USDA will adjust acres down.  Expectations are currently for just under a 1 million acre reduction.

Soybeans had continued follow through buying today but closed close to the middle of its trading range.  Expectations for a negative report due to an acreage increase seem to be overshadowed by demand and weather concerns for Late July and August.  Crop conditions decreased 1 point in yesterday’s report signifying stress in areas like KS, IL, and MI that have missed the most recent rains. Expected carryout for beans has already taken a big hit this year with increased demand from the poor crop in SA.  Weather concerns moving forward provide a lot of support when we now need a good crop.

Wheat followed corn down today after spending most of the day higher it ended the day lower.  Cash wheat is approaching loan values and wouldn’t seem to have a lot of downside risk from here.  It will be extremely hard for end users to originate wheat at these levels after the excess from strong production is through the pipeline.  Wheat will need the other markets to start working higher to get funds to exit their short positions.

Cattle futures are still a $6 discount to cash.  Boxed beef is at its lowest level since May 9th.  Markets were positive today on thoughts that these fundamentals could increase demand in grilling season.  Slaughter continues to be at elevated levels but weights are down.

Hogs had a good turnaround after a bearish hogs and pigs report.  Most have been anticipating larger 3rd quarter supplies but the 4th quarter is also now expected to show an increase in production.  Slaughter came in at 425k head yesterday up from 419k last week.  A continued strong export outlook will need to be realized to combat the supply 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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