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Closing Comments

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Closing Comments

Corn was helped by a short covering rebound in the grain markets.  Some concern into the weekend about a hotter forecast after July 16th and during the pollination period fueled today’s rally.  Whether or not the heat is carried forward after the weekend will determine how we start off on Sunday night.  Export sales for corn were 32 million bushels between old and new crop, a little disappointing for expectations.  The USDA monthly crop report will be released on Tuesday next week along with expectations of what new crop carryout will look like after increasing acres and any adjustments to demand.

The hotter forecast also pushed Soybeans higher, though it would impact grain fill in corn mostly during the time period.  The concern here would be if this was a setup going into August to stay hot and dry.  Export sales for soybeans were at 44.9 million bushels between old and new crop, and larger than expectations.  Analysts are expecting an increase in export demand compared to what the USDA has for the current marketing year and would help offset the bearishness in increasing planted acres. 

Wheat also received some short covering support in sympathy with the other grains.  The rally was limited to more talk about huge harvest yields.  As mentioned yesterday, issues around harvest for France and Germany due to rainy and overcast conditions may lead to large losses to the overall EU wheat crop this year and will be watched closely. 

Cattle futures showed limited gains on news that Canada confirmed that Taiwan had lifted its ban on Canadian Beef, effective today.  Cattle in Texas and Kansas were bid $119 against asking prices of more than $124, this would comparable to last week bringing $120 to $122 and part of the reason for a mostly sideway week.

Cash Hog prices were a little weaker on limited packer demand today.  Inventories are expected to be sufficient through early next week.  Exports could be picking up in the short term though as already near record high Chinese pork prices found more support after thousands of animals drowned and transportation to slaughterhouses were disrupted by severe flooding in southern China, according to a report by Reuters. 

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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