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Closing Comments

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Closing Comments

Corn continues its rally for the sixth session as the trade continues to unwind its bearish positions ahead of next week’s Pro Farmer tour. FranceAgriMer noted further deterioration of their corn crop due to dry weather, lowering their good/excellent rating to 63% from last week’s 68%. Pro Farmer tour starts Monday with the worst crops likely seen their first day. Trade has some concern that they will be confirming current chatter of smaller kernels and tip-back, making the USDA projection hard to achieve.

 

Soybeans trade lower inside its recent trade range on the anticipation of cooperative weather going into the final stages of crop development and on the expectation of good pod counts in next week’s Pro Farmer tour . Export demand continued today with the USDA reporting a sale of 261,000 mt of new crop soybeans to “unknown” destinations. Soybeans encountered technical resistance in the 10.20 area for a second day in a row. This will be a key area to move through prove it can reach the 10.50 target area. Seasonal trends support soybeans into the end of August. Reports surfacing of areas experiencing significant white mold and SDS damage, but the trade is discounting the concerns with the high crop condition ratings and crop development weather.

 

Wheat continues its short covering as Minneapolis continues to lead the price action. Ample global and domestic supplies are capping strength in the winter wheat markets for now. Funds were estimated buyers of some 500 contracts in Chicago today. All classes of wheat have gained this week.

 

Cattle were lower ahead of the COF report and lower cash trade this week while feeders found support to finish the week. Cattle on Feed showed On Feed Aug 1 of 102% vs estimate of 101.4%, Placed of 102% vs 100.5% estimate and Marketed of 99% vs the estimate of 99.7%. This is the lowest number marketed for July since records were started in 1996.

 

Hogs continued their erratic trade, closing higher today on short covering and the futures discount to the lean hog index. USDA reported Thursday afternoon’s average cash hog price in IA/MN down 55 cent from Wednesday. Abundant supplies continue to temper the ability to sustain rallies.

 

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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