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Closing Comments


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Closing Comments

The outside markets continue to show jittery signs as ongoing Brexit concerns and soon-to-come Chinese economic information sent crude oil futures and stock indexes lower while the US dollar traded higher – but the weight on the grain markets came from the weekend rains bringing relief to some dry areas of the Midwest and a cooperative outlook for the next two weeks added to long fund liquidation in corn and soybeans.

Corn closed lower to start the shortened week – but well off early session lows. Anticipated rains that fell over the weekend in some of the dry areas of the corn-belt coupled with the expectation for cooperative weather for crop development over the next few weeks sent corn tumbling out of the gate this morning. Corn export inspections came in close to trade expectations at 1.64 mln metric tonnes. Good/Excellent ratings this afternoon came in at 74%, essentially unchanged on the week. Corn traded off its lows as the session progressed as bargain buyers stepped in after the front month contract hit its lowest level since fall of 2014 and strength spilled over from the stabilizing wheat market which closed higher across the board, with Minneapolis wheat posting a key reversal for higher on the daily chart. In corn, funds were reported sellers of some 22,000 contracts.  

Soybeans started off the week with a dramatic lower day, mainly due to rains reaching the drier areas that needed relief and maybe even more importantly that current extended forecasts look good for crop development – however longer term August outlooks continue to maintain hot/dry concerns for soybean reproduction. Export shipments this morning were also below expectations, and though they did not help this week closer attention will be paid over the next few to see if China picks up more US soybean shipments.  Crop Progress for soybeans were down 2% from good to excellent categories and may provide some support following today’s weak start. In the November contract was able to close above the 50 day moving average and maintained traded above the low from June 24th.

Wheat closed higher across all exchanges after the CBOT September contract bottomed out at its lowest level since September of 2006 while September KC priced to its lowest level since January of 2006 before closing 5 cents higher on the day. Crop condition ratings for spring wheat came in unchanged at 72 percent good/excellent. 

Cattle closed higher, mainly gaining support from the cheaper grain prices.  Live futures were also receiving some support after checking out the bottom end of the 2 month trading range this morning before reversing toward the close. Feeders look even stronger for right now and will be trying to make new swing highs on the charts tomorrow. Boxed beef cutout values were steady on Choice and higher on Select on light to moderate demand and offerings.

Hogs were higher in the back months and continue to hold their value better than the nearby contracts.  Both look good for a short term rally at least as nearby contracts closed well of their lows and later months have shown more strength. 

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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