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Closing Comments

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Closing Comments

Corn futures lost 2.8 percent today on pressure from the forecast showing significant rain accumulation for Eastern KS, Northern MO and Western IL – areas that have struggled with dry weather as of late. The wetter forecast coupled with fund liquidation ahead of tomorrow’s USDA acreage report took front month corn to its lowest price since May 11th. The average trade guess is that US farmers will be reported to plan 92.896 mln acres of corn this spring compared to the March estimate of 93.601 mln. Acreage guesses vary from 91.5 to 94 mln acres. Tomorrow is first notice day for the July contract, adding to the selling pressure in the July contract. Estimates had funds as sellers of 20,000 contracts of corn.

Soybeans closed lower but were generally resistant to selling pressure as traders position ahead of tomorrow’s USDA acreage report. Good export demand coupled with the ongoing expectation of hot/dry weather for the critical August timeframe kept the losses in check. Soy oil futures were a bit lower but support was found in meal on the demand in the cash market. In tomorrow’s report, expectation by analysts average 83.834 mln acres, up from the March guess by the government of 82.236 mln. The range of guess on acres is 82.632 to 85.7 mln.

Wheat continued their fall, led by fresh selling in the Chicago contract on the expectation of the bumper winter wheat crop in an already low wheat demand environment. In KC the front month continuation contract found fresh 10 year lows while Chicago wheat found price levels not seen since 2010. The July Chicago wheat price is just 5 cents from the 2010 lows. Forecasts for heavy deliveries against the expiring July contracts added to selling pressure.

Cattle futures continued higher for the third day on the prospects of summer demand, lighter weights and cheaper feed sources. Feeders led strength with August trading at its highest level since June 13th.

Hogs continue to consolidate sideways to lower with August losing -.65 today as Peoria cash hogs traded $1 lower at $50. Plants will be closed for Monday’s holiday but eventually they will need to replace the post-holiday supply.

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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