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Closing Comments

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Closing Comments

Corn closed higher as doubt continues to creep in of the ability to reach the historic USDA yield projection amid accelerated grain maturity. Next week the Pro Farmer tour kicks off and will give the market something new to debate. Weekly ethanol production came in at 1,029,000 bbls/day which ties the all-time records while stocks declined 2.5 mln bbls. Brazil continues to be a buyer and shipper of US ethanol as their cane production has shifted toward sugar and away from bio-fuel. Funds are holding a sizable short position on the bet of record US yields to come. Initial resistance for the Dec contract to prove itself at will be 3.45 with 3.60 above that.

Soybeans continued higher on the weaker US dollar and the soybean oil led the strength in the soy complex as the bullish veg oil situation continues to develop. 16/17 soybean oil levels are expected to decline to their lowest levels in years despite the anticipated record soybean crop. As fall planting approaches in South America, Argentine soybean acres are expected to be down as the Buenos Aires Grain Exchange noted it expects corn planting area to increase 4.5 mln Ha from last year due to more favorable tax policy toward corn and wheat. The November contract narrowed in on the initial resistance zone of 10.20 and will encounter trendline resistance tomorrow around 10.18.

Spring Wheat continues to be the leader among wheats off strong export sales demand for the Minneapolis contract. The September spring wheat contract has gained 60 cents vs Chicago in the last two months. The September Minneapolis contract will encounter the 200 day moving average just above 5.26 tomorrow.

Cattle and feeders were under pressure today following yesterday’s losses and timid trade ahead of end-of-week cash cattle trade. Cash cattle bids were seen at $117 to $118 per cwt vs asking of $120 to $122. Last week brought $118 to $119. Packers are reluctant to step up right now. Monthly Cattle on Feed report out Friday afternoon.  

Hogs found support on the discount to the lean hog index following yesterday’s steep selloff. Cash hog prices were steady on limited demand. Lighter hogs (down 0.9 lb from a year ago) are helping to provide some support.

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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