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Closing Comments


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Closing Comments

A good extension higher in the US dollar help put commodities into new recent lows for corn, beans, and wheat.

Corn below the recent swing low from a couple of weeks ago as fund selling accelerated after taking out key support areas.  Current extended forecasts offer a cooler trend after the weekend and are expected to limit pollination or grain fill potential issues.  Ethanol production was a new record for any week and raised ethanol stocks by 2 million gallons up to 890 million gallons.  Strong buying by end users has picked up in recent weeks overall, and margins for ethanol plants are at 2 year highs.  The market is only focused on crop production at this time however and trying to price in a crop size of 172-174.  Argentina truckers’ strike could slow corn exports and the US currently is the cheapest source and exports here could see a jump if the strike is extended. 

Soybeans also closed lower and below the 100 day moving average as a reason to liquidate more long positions.  Again, the main focus continues to be production and lack of a real weather threat over an extended period of time and into early August.  Soybeans are looking to be oversold at this level and given all of August to go.   Support can be seen here down to 9.75 until more information is known.  Also, China is said to have bought more cargoes of old and new crop beans and may to take some of the focus off of production if true.       

Wheat closed off of its lows by 5-6 cents, given how much bearish yields are already priced in and uncertainty overseas.  Chicago put in a new recent low while KC markets held a double bottom pattern for the time being, while Minneapolis has looked the weakest to this point.    

Cattle put in a negative day for feeders and fats, keeping the current sideway action intact overall.  Cattle on Feed report Friday show analysts are expecting on feed as of July 1st at 102% of the year ago level, placements in June are forecast at 106% year ago level and marketings during June are seen at 110% of the year ago levels.

Pork continued there slide lower after trying to put in a brief bottom.  The nearby contracts still show a lot of weakness on the technical side, while the deferred contracts have posted a 2 day bounce and show more signs of a bottom.

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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