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Closing Comments


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Closing Comments

Corn had a quite finish to the week with Dec resisting again at the 3.58 mark. Market anticipating harvest progress Monday on corn to near 75%. Warm weather outlook should provide a cooperative harvest window next week. In China, the major corn growing provinces will begin offering subsidies to processors to increase the consumption of domestic supplies. Managed Money was hardly changed in their position, covering only 1k contracts which leaves them net short -68,962 contracts. December corn continues to gain on March, peeling off close to 2 cents from the carry in this week’s trade as harvest winds down in many areas. Over on the charts, December will need to show it can get through the 3.58 mark to get toward the target zone of 3.65-3.75. Support next week will be under the market at 3.48 December.


“Risk-offwas posture to finish the trading week in Soybeans. Soy meal reversed yesterday’s trade action, sending the longs in the soybean to the sidelines as farmer selling in the US and South America continues. First notice day for the November Soy contract is Monday. Anxiety in the trade if the recent price support in soybeans can be sustained if the buying out of China slows and a lack of meaningful South American weather story can develop over the next three months. In today’s trade, funds were seen as sellers of some 9,000 contracts. January is slowly trying to gain on the May contract, this will be necessary to prove there can be nearby demand and sustainable price action in futures. November price was rejected at 10.20 yesterday which will be a solid resistance line moving forward for the market.


Wheat was lower in Chicago and KC today, but again Minneapolis continues to resist selling pressure as the milling quality wheat is in demand. Concern is growing in the US Plains over the warm, dry conditions creating greater risk for winter wheat winter kill if the crop goes into dormancy poorly rooted. Managed Money were sellers again of Chicago, adding -21k to bring them to a net short of -123,387 contracts. On the charts, Chicago continues its erratic trade – grinding slowly higher from the August 31st lows. Dec Chicago will see overhead resistance in the 4.30 to 4.50 area.


Cattle gave up early gains after nearing technical chart resistance. Cash trade has been $3-5 higher than last week with much of the action in the $103-105 area. Feedlots seem to have said enough is enough and have been resisting the lower bids from packers. Beef demand is expected to pick up with the conclusion of October.


Hogs were higher again today on yesterday’s surprising strength in cash and wholesale prices. Word from the market is that product sales held up well throughout National Pork Month. Peoria hogs have traded steady at $25.

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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