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Closing Comments

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Closing Comments

Corn closed higher on technical buying and fund short covering following Friday’s higher close following the bearish USDA report. Price action indicates that for now the bearishness has been priced into the market and will need more confirmation closer to harvest for a confirmation of the huge production numbers being anticipated. The Brazilian government noted that they plan to rebuild their strategic corn stockpiles back to 2.0 to 2.3 mln tonnes in ’17 from the current 700k level. Expectations are for steady to slightly lower crop condition ratings this afternoon.

Soybeans traded to their highest level since July 22nd today on support from higher meal and an exceptional day in soybean oil. The NOPA report showed July crush at 143.715 mln bu for its members vs 145.227 a year ago and against the trade expectations of 146.729 mln. The supportive piece of the report was smaller than expected soy oil stocks of 1.742 vs expectations of 2.0 bln lbs. The November contract executed a technical ‘reverse head-and-shoulders’ pattern today which would have an expected target toward 10.40-10.50 area.

Wheat ended generally lower despite export inspections coming in ahead of analyst expectations this morning. The ample global and domestic supplies continue to weigh on the markets ability to sustain rallies, especially in the winter wheat complex. Spring wheat continues to be the strongest in the complex with September trading to its highest level since June 28th before encountering some selling exhaustion. The September Minneapolis contract traded for the second day above the 50 day moving average, the first time since June 21st.

Cattle and feeders traded mixed but finished lower on Friday’s steady cash trade compared to the week prior. Packers are trying to slow slaughter rates to avoid paying up for now, relying on what they can with contracted cattle.

Hogs were strong coming out of the gate to start the week and October closed at its highest level in 12 sessions thanks to advances made in Friday’s lean hog market. Friday afternoon the USDA reported that Friday’s average cash hog price in IA/MN traded $1.73 per cwt higher than Thursday. .

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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