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Closing Comments



Closing Comments

Corn traded higher today closing +2 ½ at 3.66 in May. Weekly corn sales were impressive at 1.255 MMT, coming in solidly above the expectation of 700k-1.0MMT. Reflecting a notable increase in sales relative to the last four weeks and set a 7-week high. A friendly close tomorrow would turn the weekly charts back for higher.


Soybeans firmed up today closing +3 ½ at 10.01 ½ in May. Spot bids were steady to higher; however, in the wake a recent multi-month lows in futures pricing, farmer sales remained minimal. The USDA confirmed a sale of 120,000 metric tons of soybeans to unknown destinations, and according to Thomas Reuters, “Brazil soybean exports are slowing down significantly, likely due to lack of farmer sales.” Stronger Brazilian currency and weaker US dollar has pushed the value of soybeans priced in Brazilian reals to their lowest level in months. Soybeans continue to consolidate on trend-line support, struggling to find fresh sellers ahead of the March 30 planting intentions report.


Wheat finished unchanged in Chicago after being mostly higher during the session. May KC added 2 ¾ while Minneapolis May picked up 7 ½. Due to both an unchanged basis price and yield prospects/development up in the air, famer selling of hard red winter wheat was quiet throughout the day. Through its daily reporting system, the USDA said private exporters sold 120,000 tonnes of U.S. hard red winter wheat to Algeria for 2016/17 delivery. In the world of weather, the latest weekly U.S. drought Monitor showed little change in drought conditions in Oklahoma, western Kansas and eastern Ohio. Tuesday’s low in wheat will be a critical low to hold moving forward. If we can close the week with another positive note, the weekly charts will look to have their upward momentum return.


Live Cattle futures impressed today closing up +1.175 at 109.425 in June. The positive move was fueled by higher cash prices. Triple digit packer profits, brisk wholesale beef demand and scarce supplies in parts of the plains are thought to be the drivers behind the increase in cash price. With a ‘cloud” of increased supplies ahead hanging over the market, some experts question whether the gains are sustainable through the weekend.


Hogs were lower, trading “inside” yesterday’s range finishing -0.150 at 78.675 in June. Profit taking and uneasiness about looming supply buildup caused the pressure. On the bright side, Wednesday’s firmer cash prices minimized future contract loses. Iowa/Minnesota saw cash prices increase as much as $0.98 from Tuesday to Wednesday.


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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