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Closing Comments



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Closing Comments

Fireworks started the day trade from rumors of an impending executive order from the President regarding the RFS mandate. The plan is reported to block biodiesel imports from qualifying for blender credits and would shift the point of obligation for blending away from ethanol refiners.


Corn exploded this morning on the RFS news, sending new crop corn into new highs for the move but wasn’t able to maintain the gains into the end of the day. May corn closed +5 ½ at 3.73 ¾. Funds were strong buyers in corn which has uncovered more old and new crop selling. Price discovery for corn finishes today at an unofficial 3.97. On the charts, yesterday’s swing low will be watched by the trade as a low to hold to continue the uptrend. Closing in the lower half of today’s trading range was a disappointing finish but the action demonstrates the underlying volatility of even a large supply market.


November Soybeans traded nearly 26 cents higher on the news of changes in the biodiesel incentives but couldn’t hold strength past noon, finishing May +13 ¾ and November +12. Soybean base price discovery ends today at an unofficial 10.21.


Wheat tagged along with the grain and oil seed rally, but was not able to sustain strength. July Chicago finished +6 ¼, KC July +5 ¼ and Minneapolis May +2 ¾.  Questions over the early breaking of dormancy continues to beg the question in winter wheats if there will be a March scare. Plains wheat ratings continue to run under last year levels. Cash trade found Egypt as a buyer of 235,000 mt of Russian wheat, 120,000 mt of French wheat and 120,000 mt of Romanian wheat. Yesterday’s low in the wheat markets will be seen as a swing low to hold if the uptrend is to remain intact.


Live Cattle found strength again with April finishing +2.425 at 117.925.  Feedlots are showing 215,000 head compared to 225,000 head last year. Strong beef demand is helping to provide general market support as we are slaughtering 10% more cattle than a year ago. Steer carcass weights are also well under year ago levels at 879 lbs. Feeder futures continue to run at discounts to the cash market.


Hogs had a relatively quiet day with April losing -0.525 to finish at 67.600.  Lower Belly values softened up the front month futures while summer months continue to wrestle with large incoming supplies but strong export expectations.



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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