Home Market Market Watch Closing Comments

Closing Comments

SHARE

cid:<a href=image009.jpg@01CE6CE4.660D8B30“>

Closing Comments

Corn overnight traded steady/firm on light volume, and this transitioned into a nice gain today, up 4 ¾.  The question that begs answering – can corn continue to advance if crude cannot take out the Oct $51.93 high?  EIA reported ethanol production down to 991K barrels/day from 998K, but was 5% up over last year’s same-week production.  Stocks had gotten down to a low not seen since last November, but rebounded sharply to 837mln/gal from 800 mln/gal last week . . Ethanol profitability remains positive, at/near the high for the year.  On another note, due to China’s new corn production policy (which includes fewer incentives for corn farming in many provinces), production is projected to drop by 4% to 216.2 tonnes next year.

 

Soybeans saw a big jump today, muscling their way up 19 ¼.  Surprisingly, there were no announced Chinese flash sales today, but Asian markets continued to influence, as strength in Dalian markets nudged Malaysian palm oil higher, which also positively reflected on the CME soy complex.  Yields continue to impress with double cropped beans yielding similar bushels to prior single crop yields – the thought being that this is in part to genetics finally catching up to corn and also near perfect growing conditions in many areas with timely late season rains.  Brazil’s regional ag institute has pegged soybean planting progress at 42.3%, almost double to a year earlier.  This is helping put Brazilian farmers in a good position for corn planting.

 

Wheat ended up a couple cents better overnight and came storming out of the gates today, up 7 ¼, Chicago leading the way (maybe an omen for the Cubs?). Wheat has been basically stagnant with limited fresh news and struggled to maintain gains.  During yesterday’s session, Egypt announced a large buy of 420K tonnes, consisting of 240K tonnes of Romanian and 180K tonnes of Russian wheat.  It is believed this is their single largest purchase since 2014. Russian winter grain acreage will attain 17.3 mln (42.7 mln acres) hectares, up .5 mln over last season, according to a Russian grain union official.  The U.S. is still not competitive with the Black Sea region.

 

Cattle trading this week has brought optimism that has been absent recently, with higher cash and future prices influencing the replacement market.  The cattle complex today once again ended with a modest gain. Tonnage will be positively impacted by the increasing heifer slaughter.  Heifer placements are increasing nationally in the feedyards.  Slaughter for the past two weeks has been consistently around the 600,000 head number, with packers able to make attractive margins on beef.

 

Hogs gave up some recent gains from earlier in the week, down .425. The combined slaughter for Monday and Tuesday was 885,000 head, 23,000 more than the same period last year, according to the USDA.  Wednesday’s average pork packer margins were estimated at $49.80 per head, up from $48.65 a week ago, according to HedgersEdge.com.  The large hog numbers are compounded by more pork tonnage, resulting from faster weight gain, due to lower fall temps and tasty, newly harvested corn.

 

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.

cid:image010.jpg@01CE6CE4.660D8B30

cid:image011.jpg@01CE6CE4.660D8B30

cid:image012.png@01CE6CE4.660D8B30

www.waterstreet.org 
or 1-866-249-2528