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Closing Comments

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Closing Comments

Non-manufacturing numbers from ISM saw the slowest service growth rate since 2009, cyclical industries in contraction and US economy remaining in slow growth trend. This sent the US dollar lower and gold and treasuries higher today.

 

Corn closed unchanged in December, well off session lows. Bearish private analyst reports Friday kept pressure on the market from the early session, but sellers were unable to hold the market down but buyers were unable to take out Friday’s high as the tug-o-war between supply and demand continues. Weekly export inspection came in above last week at 57.8 mln bu.  Several locations in the southern corn-belt are starting harvest this week. Early reports are mixed between ‘large, as expected’ and ‘light corn and disappointing.’ The market is heavily tipped to the bear’s side with short funds and end-users still waiting for the market to come to them. The market has closed right at trendline resistance and resistance of Friday’s high. Closes above Friday’s Dec high of 3.29 ¾ will be a serious shot across the bow for market shorts.  

 

Soybeans extended Fridays bounce into trendline resistance despite Friday’s bearish private analyst yield estimates. Export inspections were an impressive 45.3 mln bu, compared to last week at 33.9 mln. Commercial traders are eying open Sept/Oct/Nov export slots and significant demand below the market while bears are pointing to record anticipated yields and typical seasonal price pressure to keep buyers in check. Meal and soy oil trade will drive futures on soybeans. Funds are still long soybeans, but any hint of yield disappointments the next few weeks could bring them back to the table. Support the next few weeks should be in the 9.20 zone.

 

Wheat reversed Friday’s fortunes as European futures extended recent losses and ample supplies continue to look for a bid ahead of the large incoming corn crop. The lower US dollar helped to stem early session losses, but the higher quality wheats led price weakness today. Export inspections saw a slight uptick from last week at 23.5 mln bu.

 

Cattle put in new life of contract lows but found some light technical buying while feeders couldn’t hold midsession buying and closed October 3.875 lower. Week cash cattle and wholesale beef price pressure coupled with heavier cattle continue to point to bigger supplies. Last week Plains cash cattle traded mostly $5 lower from the previous week.

 

Hogs Friday price reversal extended today as record production of hogs this year continues to weigh on futures. Traders are continuing to wait for more cash price bottoming signals before stepping into long future bets. USDA data Friday showed average cash hogs in IA/MN 7 cents higher than Thursday. A Smithfield facility in Monmouth IL shutdown Monday due to fire. Smithfield said the facility will be “operational as soon as possible.” The location processes 10,000 hogs per day.

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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