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Closing Comments

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Closing Comments

Corn traded on both sides of unchanged and was able to muster enough energy to stay positive, +1 ½ (369’6 March).   Weekly corn inspections reported by the USDA this morning were pegged at 1.152 MMT, slightly below the 1.2 MMT that were expected.  Corn had two sales announcements by the USDA – a private sale of 269,296 MT of corn to Japan as well as 111,200 MT of corn sold to “unknown”.  There seems to be plenty of demand under the market, but supply keeps growing.  News out of South America continues to show good weather as well as an optimistic harvest prediction.  Argentina’s Climate and Water Institute reported that their corn and soybean crop is reaching a milestone stage of development in ideal conditions, and that they are expecting possible record yields.  China has also been able to market some of their huge stockpiles to Japan, due to shortages caused by lengthy delays of cargos out of the northwestern US.  Japan is expected to tap into emergency feed piles as they are at critically low levels.  Watch 3.62 March as a key level of support.

 

Soybeans did not have enough positive news to offset bearish mindsets, -6 (10.26’4 March).  Until we get more definitive information on a possible acreage shift around March 31st or a change in South American weather, soybeans are likely stuck in a $.20-.30 range.  The market is long and March will be going off the board in the near term.  Farmers are very “sold” on new crop beans, ranging from 50-60% to as much as 100% in some cases.  Keep an eye on 9.80 as the “bull – bear” line and also on 10.35 to the upside.  A breach of either will have impactful ramifications.  

 

Wheat is coming off a reversal last week and is showing some signs of having made its run, with Chicago -5, Kansas City -4, and Minneapolis -5.   The dollar’s strength also contributed to weakness (up over 101).  But, on the bright side, the USDA reported a private sale of 138,650 MT to “unknown” destination.  The USDA also showed weekly inspections in positive territory, with 558,252 MT reported compared to the expected 450K MT.  Global supplies are at a high level and concerns of winterkill in Russia and here in the states have somewhat subsided.  Wheat is a follower of corn and soybeans and will be looking to them for direction.  Close in support for March wheat is in the areas of 4.38’4 and 4.32’4. 

 

April Live Cattle gapped higher today on buy stops and technical buying (+.375 April), led by yesterday’s firmer wholesale beef values and futures’ discounts to last week’s cash prices, per traders.  According to the USDA, wholesale beef prices were up 42 cents cwt over Friday, and select cuts were up sharply to $190.40 from $1.16.

 

April Hogs continued to trade in a range, finishing in negative territory, as prices were supported by Monday’s higher cash and wholesale pork prices, -.425 (April).  The USDA reported that the average wholesale pork price was up 81 cents per cwt from Friday, mostly influenced by pork bellies.  Packer margins are still a positive $14.60, but down significantly from $21.50 last week.

 

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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