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Closing Comments

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Closing Comments

World stock indexes edged higher and the US dollar weakened on expectations that the Fed will leave interest rates unchanged this week.

 

Corn was generally held in check today on the expectation of the large harvest to get underway. However some continued reports of disappointing yield reports are helping to provide support on breaks and offset the large yield reports. Export inspections came in just a little off from last week, but still a seasonally strong 50.590 mln bu. Corn showed resilience into the close coming back off their daily lows to close green. December is running into resistance at the 50 day moving average and will need to prove it can get through 3.42 which would project toward the 3.70 area.

 

Soybeans led price action today as China returned from their holiday and palm oil action provided support to the soy oil futures. Wet weather outlook for many areas the next few weeks is holding premium in the market in the face of what is expected to be a record harvest. Soybean inspections were down 20% from last week to 27.7 mln bu but the current pace is still double of last year with three weeks of the marketing year completed. Cash meal market is soft on expectations of the incoming crop as merchandisers continue the high wire walk between the tight old crop supplies and incoming harvest. China’s shipments are reportedly now moving into supplies rather than the crusher as crush margins have deteriorated and hog margins maintain weakness. Brazil has gotten some rains helping with planting. Safras forecast of big corn acreage hasn’t been stated, but could be implied to be coming at the cost of soybean acres. On the charts; soy oil was the strongest but couldn’t put in a new higher high yet, meal couldn’t hold early strength and reversed off trendline resistance as did the soybean futures. New crop crush margin was all over the place – closing unchanged at .76.

 

Wheat gave up early gains on continued global supply concerns and a slowdown in the export pace. Export inspections were down from last week to 20.6 mln bu and are expected to seasonally fall for the next six weeks. With 16 weeks done of the marketing year, the current pace is running 25% above last year. US winter wheat planting progress is expected to be at 15%. Farmers are projected to plant the fewest US winter wheat acres in more than a century. Egypt, the world’s largest wheat importer, cancelled its third straight tender and is essentially locked in dispute with suppliers over their import regulations.

 

Cattle were lower on profit-taking following the recent strength in futures and the better than expected cash trade Friday. Good margins and looking potential seasonal beef demand is helping processors to pay more than before. Traders will be anticipating Friday’s USDA cattle on feed report. Indications are that more cattle were placed last month than the year prior. Cutout values earlier today had choice 0.54 lower and select up 1.15.

 

Hogs gave up early gains to close lower on profit-taking and continued weak cash prices. Hopeful support development from October demand from National Pork Month. Lean hogs traded mostly 50 cents lower in the Midwest today. USDA midday said wholesale pork prices were up $2.52.

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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