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Closing Comments


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Closing Comments

 Corn re-tested the highs from last week but closed just slightly lower on the day. Weekly grain inspections came in at 963,897 metric tons. Trade expected 900,000 metric tons. The market is anticipating another good week of exports this week.  Current sales are at 67% of USDA projections vs. 61% last year.  Safrinha corn is starting to get planted behind some of the earliest beans.  Ethanol margins did slip last week but all corn end users are currently seen as achieving break even or better with current prices.  Corn futures have finished higher or near unchanged in eight consecutive sessions.  This has seen an increase in speculative fund buying which is unexpected this time of year.


Soybeans closed mixed with nearby weaker than new crop. Weekend weather in South American was somewhat bearish.  Argentina was mostly hot/dry.  They expect the forecast to be clear until next Tuesday which will allow some areas that have received too much rain of late to dry out.  After Tuesday they are expecting the cool/wet forecast to return.  This break in the weather may allow some better identification of what damage has occurred because of the rain.  Brazil is seen as mostly favorable right now with some early harvest beginning. Soybean inspections were 1.29 mln metric tons vs expectations of 1.4 mln. China will be out of the market for the next couple of weeks as they celebrate their Lunar New Year.  Some early beans may now start to come to the market from South America and the trade will watch to see if demand begins a stronger switch to the Southern Hemisphere.


Winter Wheat closed up 1 to 2 today after a poor week last week. Rains across some of the more drought ridden parts of HRW country are adding pressure to the market.  Russian wheat prices rose for the second consecutive week.  The speculative net short position now sits at just over 98,000 contracts.


Live Cattle closed today mixed with the deferred a little weaker.  Carcass weights have exceeded that of last year. The market will watch to see if demand can increase to take care of this extra tonnage.  Although muddy pens across the Midwest may make this a short lived problem if cattle don’t perform well.  Cattle sales were mostly $3 to $5 higher last week.


Hogs continue with sideways choppy trade.  This market may take its direction from cattle this week.  Also they will be watching closely to see if carcass weights start to follow normal seasonal tendencies.


In other news President Trump has continued with executive orders today withdrawing the U.S. from the Trans-Pacific Partnership.



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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