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Closing Comments


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Closing Comments

Corn traded positive overnight and continued the trend throughout the day but ended up down ¼ of a cent.  We are closing in on the resistance area of 3.60-3.75. The CBOT funds were net sellers of 5,000 contracts today. The USDA yesterday had corn harvest progress at 46% vs. 35% last week, compared to 54% a year ago. Brazilian 1st corn crop planting is continuing at a faster pace than last year, at 88% complete. Corn industry group from Iowa is hosting an event with Mexican grain importers this week, meant to strengthen relations between U.S. suppliers and Mexican buyers of grain and DDG’s.


Soybeans traded to new highs earlier in the day setting a 3 ½ week top, but pulled back to close down 5 ¾. The CBOT funds were net sellers of 6,000 contracts today.  The USDA reported a large private sale to China of 706,500 mt, likely part of the 5.1 mmt in purchase agreements signed by the delegation visiting Des Moines last week. Yields have continued to be fantastic with reports of double crops even approaching 40-50 bpa.  The crop harvest is 62% complete according to USDA progress reports from yesterday. On the South American front, Brazil is continuing on an above average planting pace. The USDA sees this year’s Argentina crop at 55 mmt, below the initial estimate of 57 mmt.


Wheat closed down 3 3/4 after recent gains. The CBOT funds were net sellers of 2,200 contracts today.  The Japanese Ag Ministry announced they are seeking food grade Wheat at a tender to close on Oct. 20th, which includes 28,360 mt of U.S. DNS, 26,270 of U.S. HRW, and 20,565 of U.S. white wheat.  U.S. winter wheat planting came in at 72% complete compared to 73% a year ago.  The Ukraine Ag Ministry said exports are at 11.9 mmt so far, compared to 10.6 mmt compared to last year. European wheat futures were little changed after reaching a seven-week high.


Cattle futures held their gains to maintain the upward trend.  The driver from here on will be the cash markets. Ahead of the monthly USDA report this Friday, analysts expect cattle on feed as of Oct 1st at 101% of the same period last year. September placements were expected at 104% of last year’s level and marketings at 106% of last September.


Hog futures closed down again on continued anxiety over big supplies. So much for National Pork Month.  Fear continues to drive the markets and the seasonal bias isn’t helping either.  Many are reluctant to take profits on their short positions given all of the negativity in the marketplace.  One push lower may be ahead of us before seeing some sort of recovery. 


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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