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Closing Comments

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Closing Comments

Corn headed lower out of the gate under pressure from the larger than expected short covering seen by the funds on Friday’s report – leaving less short covering in play than expected. In addition, corn export inspection came in below expectations at only 21.3 mln bu, 40% off last week as more room is made for soybeans at the ports. Dec corn posted just over a 50% retracement of the recent six day rally. Moving forward Dec needs to be able to show closing support above 3.45.

 

Soybeans inspections saw the biggest weekly number since November of 2014 at 100.7 mln bu. The biggest source of support to the soybean market has been spillover from the global palm and veg oil markets on continuing supply concerns. January over May spread continues to trade sideways – for better hope in the soybean market watch the Jan price begin to lead over May, signaling better front month demand.  Overhead resistance includes 10.00, 10.20 and 10.35.

 

Wheat headed lower, led by fund selling in Chicago to start the week. Export inspections were a disappointing 8.9 mln bu as the US continues to struggle to compete on the world market being dominated by Black Sea sources. KC gained on Chicago for the seventh day. Minneapolis closed lower, but continues to be the most supportive in the complex.  

 

Cattle jumped out of the gate following Friday’s bullish Cattle on Feed report that showed placements significantly lower than the market anticipated. However frozen beef stocks came in the highest ever for the month of September. Last week’s cash cattle traded $2 to $3 higher than the previous week.

 

Hogs found spillover strength from the cattle trade as Dec led the futures trade higher. The trade is generally skeptical of the ability to sustain rallies as huge supplies continue to weigh on the market. Last week’s 2.514 mln head hog slaughter was the biggest ever thanks to ‘catch up’ slaughter on the East Coast.

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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