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Closing Comments


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Closing Comments

Corn closed lower on the day trying to price in expected rains for the weekend.  The southern Midwest is supposed to get good soaking rains over the next 1-5 days.  The forecast this morning initially shifted lower but then at midday came back slightly north again to catch the majority of the area currently on the drought monitor.  This system will be closely watched over the weekend.  The report stopped momentum in the corn market of a carryout that was slowly working its way down.  Now it will come down to an expected yield of 168 and if the weather will continue to cooperate to make that kind of crop or a larger one possible.  Right now with crop ratings where they are we may be pricing in a larger crop than a 168.  Weather for the second half of July will be heavily speculated moving forward.  It is still expected to be warmer and slightly drier and that time frame should be when the majority of corn is going through pollination.

Soybeans had some profit taking today going into the long weekend.  Rains through the weekend should ease production concern in the short term.  If yield were to drop by 1.5 bu. this year it would send our ending stocks below 200 million bu.  This would be an uncomfortable spot and the trade may want to feel more comfortable about production before selling off to hard.  This may be hard to attain with a scheduled hot second half of July and August.  Soybeans rallied to the highest point above corn yesterday that we have seen in 7years. 

Wheat closed lower today after a key reversal yesterday on a bearish report.  Trade is trying to gauge this year’s crop that seems to keep getting larger.  Wheat has closed lower 15 out of its last 17 sessions and closed at new lows today. 

Cattle closed lower on the day and $7.17 lower than cash trade this week.  Cash was increased this week on strong packer margins and a smaller show list.  Weights continue to run about 5lbs less than last year.  Beef production is up 10.4% from a year ago and boxed beef cutout closed lower again this week at 208.44.  Thoughts that this should increase demand.

Hogs were one of the few things in the ag sector today that was positive.  Cash hogs were mostly $1 lower this week as packer demand was slow.  Exports were behind pace and none of them were to China which was disappointing.  Trade will be watching to see if the action today means a short term low is in place and if China can get back in the export report next week.

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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