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Closing Comments

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Closing Comments

Corn lower as the trade backed off from some of its recent hot/dry ridge fear that is expected to move into the Midwest next week. The pollination and grain fill has been generally very cooperative across the Midwest, but the cloud of the coming La Nina pattern has kept uncertainty about what late July and August weather will produce. Currently 20 percent of the corn production area is at risk if the ridge (the biggest since 2012) was to set up and persist. Spot bids were steady to higher as the erratic futures action had farmer selling to a minimum. COT info showed that Managed Money eliminated almost their entire net long corn position as of Tuesday by selling -94,401 contracts taking them to only net long of 8,702 contracts. Funds were seen as sellers of -13,000 contracts in today’s trade.

Soybeans finished November down 5 cents after an erratic session started with the overnight 30 lower and the day session nearly 15 higher. NOPA crush came in just shy of analyst expectations with a member June crush of 145.050, down from 152.280 mln during may but 1.8% more than June of last year. Soy oil stocks as of June 30 stood at 1.985 bln lbs vs the forecast of 1.990 bln and year ago stocks of 1.574 bln. Managed Money were seen as sellers of -7,922 contracts as of Tuesday leaving them still net long 159,407 contracts. November contract still has an open gap above at 11.34 that should continue to be a magnet for the market.

Wheat fell on technical selling and spill over pressure form corn and soybeans. KC and Minneapolis closed lower, but saw smaller declines than Chicago. Fundamental pressure continues to weigh on the complex with the larger than expected winter wheat crops and news out of Canada of the expectation for a good production year all compounding large global ending stocks. FranceAgriMer said 49% of French soft wheat was rated good or excellent as of July 11, a drop from 59% due to the recent wet weather. Managed Money was seen as sellers again of wheat, reported to have added -12,425 contracts to their net short Chicago position of -114,668 – a new record large net short position.

Cattle saw fund liquidation as the market saw lower than expected cash prices. Cash cattle bits in the southern Plains were $116 to $117 per cwt against $120 asking. If the forecast hot weather coming into the western Midwest next week could slow down weight gains in the coming weeks.

Pork slumped to finish the week on technical sell stops and speculative selling on the expectation of bigger supplies from cooperative weather. Peoria hogs traded steady at $48. Packers are seen as having ample supply through next week. Sagging cash values and the setback in wholesale values continue to weigh on contracts. Managed Money sold -8,725 contracts this past week, leaving them still net long 59,617 contracts in Lean hogs.

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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