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Closing Comments


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Closing Comments

Corn traded in a wide range today closing near the bottom of the trade range off -4 in May at 3.63 ½. The USDA confirmed a sale of 132,000 tonnes to South Korea. USDA export inspections came in right at expectations of 52.5 mln bu. Hedge funds and other money managers scrapped their long position in corn futures and options in the week through March 14, ending a two-month bullish stint. The weekly downturn in net position of 103,683 contracts was the funds’ largest-ever for CBOT corn.


Soybeans couldn’t hold on to their early strength, finishing May off ½ at 9.99 ½. Speculators dropped more soybean oil ownership last week, practically dissolving the net long that had been going for nearly eight straight months. The new stance – just 784 contracts long – is very different from last week’s 26,364 contracts. That said, soy oil has achieved long term technical support and may well be finding buyers stepping back in at these levels. Brazil’s Abiove soy industry association raised the soybean crop projection to 107.3 million tonnes, up from its February forecast of 104.6 million tonnes. Word out of China is they have plenty of needs to get locked in past March, which should provide buying support if further weakness were to develop. Today’s export inspections came in above trade expectations at 27.1 mln bu.


Wheat briefly traded above last week’s high until running out of buyers and closing near the low with Chicago down -6 at 4.30 ¼ in the May contract. KC lost -8 ¼ while Minneapolis shed -3/4. The drop in wheat cast a bearish tone across all grains. The lack of realized weather threats continues to hold buyers back from the winter wheat markets. Grains took a generally bearish technically posture today (bearish engulfing day in many feed grains) and leaves the market watching for sellers to step up or chicken out in Tuesday’s trade.


Live Cattle remained somewhat unchanged today closing at June up 0.125 at 109.800. The big story in beef is both China and South Korea suspending some Brazilian beef imports due to meatpacking corruption involving the alleged bribery of health officials.


Hogs closed weaker in the nearby but June stabilized, closing up 0.050 at 77.375. Softer cash trade continues to hold hogs in check, but his week’s trade will focus on Wednesday’s Cold Storage report and will be watching in particular the belly supplies.


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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Dean Heffta | Director
WATER STREET ADVISORY® | www.waterstreet.org
(309) 680-1200 | dheffta@waterstreet.org

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