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Closing Comments

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Closing Comments

Corn traded both sides of unchanged, finding support from the short fund position and parts of the corn belt not producing the yields quite to anticipation. Corn started under pressure on the Chinese announcement of adding anti-dumping import duties to US supplies of DDGs. CFTC data showed that as of Tuesday Managed Money had added again to their short corn position which is now at -161,592 net contracts. The December price is holding support, but is continuing to resist getting up and through the 3.42 area.

 

Soybeans fell on more good harvest yield reports and a better harvest outlook for many areas of the Midwest. Cash markets softened as harvest deliveries picked up at many terminals. Soy meal put in a new low on the move on the expectation of a boost in crush levels. Weaker crude oil and palm oil prices weighed on soy oil. Managed Money is still holding onto a long position and added to it in the week ending Tuesday, but the impressive yield reports coming in from so many areas may force their hand and add pressure in the short term. Soybeans still have the potential for a long term demand story, but for now the supply side of the equation will likely command the most attention. Longer term support at 9.00-9.20, November closed at 9.55 today. To watch for next week is the export inspection pace which is expected to be beyond any recent weekly record and would be almost double the record September pace.

 

Wheat closed mixed on the day on short-covering but off the session highs on ample global supplies. The Indian government lowered its wheat import tax to 10% from 25% as part of an effort in curbing food inflation. Expect much of Indian purchases to be from Australia and the Black Sea. Funds continue to hold their large Chicago short position, but have been working out of their short position in KC.

 

Cattle collapsed out of the gate this morning on technical selling, COF report fears and anxiety over cash trade off a couple dollars on the week before spending the rest of the day recovering losses. Boxed beef values earlier today were .20 lower in choice and .31 lower in select with a $7.86 premium for choice. Cattle on Feed report showed On Feed Sept 1 at 101%, Placed in Aug 115% and Marketed in Aug at 118%. Both Placed and Marketed came in just above analysis estimates.

 

Hogs were mixed today with Midwest prices about 50 cents lower. Relentless supply pressure continues, coupled with tempered wholesale demand. This morning’s wholesale prices were 80 cents lower on the day. Friday’s pork packer margins were estimated at $49.15/head, up from $45.35 a week ago. Cold Storage showed frozen pork at 607 mln lbs vs 598 mln lbs in July and 653 mln lbs.

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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