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Closing Comments

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Closing Comments

Corn traded mixed and closed lower today as exports were just a little on the lighter side but did show a bit more heading to Asia than usual. For new crop, Black Sea and Argentina are trying to edge into future export business. Rosario Exchange is estimating Argentine corn acreage at 14 mln vs 12 last year thanks to the revised export tax policy. Strategie Grain trimmed their EU corn estimate, but ample feed grain and Ukrainian corn will keep them supplied. Good ethanol profitability is supporting end user bids – producer margins are estimated at 60-70 cent/bu. December his holding on 3.25 support. Trade above 3.44 Dec would signal an end to the downtrend – for now the fund seem to be content holding their huge short position.

 

Soybeans strengthened of continued export demand and the slow start to harvest balancing out for now the expected huge yields. 16/17 export sales came within expectations at just over 1 mln mt. Today’s NOPA report said members crushed fewer beans than a year ago. Stating an August crush of 131.822 mln bu – this was below the 136 mln expectation and Aug ’15 of 135.304. November has not yet been able to pierce the 9.37 low – longer term support is seen at 9.20 while the 9.65 area should cap rallies for the short term. Keep an eye on the soy oil market and rainfall the next few weeks in Brazil – they need some.

 

Wheat struggled to find strength today despite good export sales. Kansas City wheat extended its 12 week gains over Chicago on the market’s search for quality. Strategie Grains again cut its estimate of this year’s soft wheat production in the EU and lowered the expected share of milling-quality wheat. Their estimate is now 10 percent below the 2015 crop. Argentine and Ukrainian dry weather continues to be a concern for their wheat producing areas. A glimmer of hope for US wheat shippers is this year’s marketing pace is currently at the second highest pace of the last five years.

 

Cattle climbed today on follow-through buying – gapping higher to start the day. Traders are expecting firmer prices for cash cattle to provide a supportive tone despite the soft beef demand. Cash cattle bids in the Southern Plains are standing at $104 vs $110 asking prices. Packers paid $105 to $106 last week. Export sales report showed an uptick in beef exports vs last week.

 

Hogs continue to be under pressure as big numbers and better gains thanks to nice weather. Cash prices in the Midwest were mostly a $1 lower from continued supply pressure. Average packer margin continues to grow thanks to the large supply.

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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