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Closing Comments

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Closing Comments

Corn traded in a small four cent range lower for most of the day’s session as the Pro Farmer crop tour kicked off today in Ohio and South Dakota. Early results have been highly variable with obvious damage from early water and later dryness showing in both Ohio and South Dakota. Tip back and pollination issues were offset by some exceptional corn, but early results show generally lower yields, not surprising given the two states where the tour started. Corn had another incredible week of inspections, defying expectations with just under 1.25 mmt of corn shipped. Overall tone of the market this week will be largely dependent on the findings of the tour, with expectations for better crops to come in IL and IA.

 

Soybeans traded off their lows early, but failed to exceed resistance at 10.20 before closing toward the top end of the range. Pro Farmer tour results are much less causal to bean yields, and most of today’s strength driven more by export inspections than any revolutionary findings from the tour. Little to no talk of disease and highly variable pod counts found thus far. Export inspections this morning were larger than expectations at 961k mt, and nearly 26% larger than last week! With adequate rainfall present and a cool forecast into the tail end of the month, only reports of disease out of the tour will be supportive in the days ahead.

 

Wheat was the weakest today as exports failed to impress and no new news is bad news for a commodity that still has burdensome world supplies. Minneapolis held up the best for the session while the KC / CHI wheat spread continues to strengthen even on this pull-back. Wheat exports were 535k mt, just under expectations at 550k mt.

 

Cattle had an indecisive day of trade, giving up mid-session gains to form an uncertain doji day on the chart. Feeders fared better than fats, and both traded relatively quiet for a post cattle on feed report session and a cold storage report day. Cold storage showed plenty of beef still in the freezer, with 469.3 million pounds verses expectations of just 445.5 million pounds. Demand and lower prices will eventually correct this market, but for now it seems large supply concerns are overmatching demand style news.

 

Hogs traded weaker today, with the deferred months trading slightly higher. Cold Storage numbers show nearly 30 million more pounds of pork in the freezer than expectations. This news is the last thing the market needs in its weakened state, but could easily be part of the justification for the recent tumble in prices.

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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