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Closing Comments

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Closing Comments

The Markets were closed today in observance of President’s Day.

 

In Corn news, the Commitments of Traders Report on Friday afternoon showed managed funds increased corn long from 57K to 85K+.  Japan is looking to China to help replenish its dwindling corn inventories, as cargo delays from the northwestern US have put them in a tight spot, as they are expecting to tap into their emergency feed piles to supplement the critically low levels.  Here stateside, it has been reported that farmers advanced old crop sales from 50% to near 66% on the recent rally.  Producers are looking for CZ17 $4.20-4.25 to sell more new crop.  Corn needs to hold support around the 3.62 area (March), with 3.84 as a nearby target.

 

Soybeans gave up the most of the grains last week, down 24.25 cents.  The markets have been heavily focused on South American weather and crop, which have not given any reason to boost optimism.  Mato Grosso (Brazil) reported their soy harvest on Friday at 52%, while safrina corn plantings were at 58.4%, both well above average progress.  The Commitments of Traders Report showed an increase of soy’s long position by managed funds up 20K+ contracts to 171K.  In the US, it has been reported that old crop soy sales are now up to around 90%, while new crop is pegged at 25-30%.  Will soybeans be able to get back on track tomorrow, with the 3-day weekend and risk-off mindset behind them?  It is likely they will continue to chop in the 10.17-10.80 range where they have been for the last month until more definitive information is available from South American yield and the acreage battle with corn.

 

The Commitments of Traders Report had wheat’s short position down 43K to -40K, among managed funds.  US winter wheat has showed signs of breaking dormancy, with the warm temperatures across the country.  Wheat is overbought and showing signs of a short-term peak in place.  Look for wheat to seek direction from corn and beans, as wheat is a “news” commodity.

 

Has Live Cattle seen enough of a pullback for now? April cattle was able to get up and through a trend line Friday , look for more broad range trade over the next two weeks between the 111.00-120.00 area.

 

Hogs are showing signs of running out of energy and looking for consolidation, as indicators are showing bearish divergence.  The market has been driven recently by pork bellies and demand for bacon, propelling packer margins higher.

 

Commitments of Traders Report

 

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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