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Closing Comments

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Closing Comments

Corn held on to most of its strength today thanks in part to pre-report short covering and election day buying by funds and end users.  Generally speaking, the November crop report produces mellow numbers for corn and lacks a strong reaction.  That would be the expectation for tomorrow’s 11:00 CT report, as corn is seen only decreasing in yield slightly for the average trade guess.  Demand will be a good number to watch tomorrow as corn is running 4% ahead of the current export pace that would be needed to meet the USDA expectation. Technically corn traded back to the top of its range today, waiting for further post report direction. 3.58/3.60 will be a key resistance area.

 

Soybeans pushed higher throughout most of the day session, but did close around .09 cents off the session high.  A larger soybean number is expected tomorrow in the report, but by how much is more of a debate? Anything sub 52 bushel will likely be seen by the trade as friendly. Soybeans are running around 2% ahead of the export pace set by the USDA and are looking at the evidence at hand as a reason to push prices higher, while others point to the difficulty or even impossibility to maintain this level of export shipments for any extended period of time. Big day in beans brought the January contract back to 10.20 resistance. Charts are looking friendlier but need to prove they can close through 10.20 – direction from tomorrow will be important.         

 

Wheat was higher, led by KC and Minneapolis as demand for protein and Plains weather concerns offered support.  Helpful news that Ukraine could be cutting up to 7 million tons of general grain exports, which most of that or even all could be wheat.  Logistics and worn out infrastructure would be the main reasons cited.  Still, large global supplies will limit much of a rally unless a weather story in the US can develop or in Australia.  Russia looks to have a very good developing crop, so the story will have to come from another area.   

 

Live Cattle were able to finally post a positive day following four sessions of losses. Short covering and bargain buying helped offer support while the trade anxiously awaits this week’s cash trade. The brisk packer pace thanks to good packer margins has added supply to the market, helping to soften the wholesale pricing.  

 

In Hogs today, futures traded up .95 while cash prices were seen across the Midwest as steady to $1 per cwt lower, weakened by weighty supplies that are reinforcing packer inventories. Last week, packers processed a record 2.532 million hogs, which beat the previous record of 2.524 million heads. 

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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