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Closing Comments

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Closing Comments

Corn futures fell again today, hitting a one-week low with May corn and finished down -2 ¼ cents at $3.60 ¼ a bushel. Lack of friendly news, larger than expected corn harvested acres in South America, threats by Mexico to shift corn sourcing to South America and weak energy markets continue to press on corn for now. Demand however is still solid in the ethanol and export market. Corn posted a new low on this move, but selling exhaustion lifted futures off the bottom of the daily range and prevented a new low close on the move.

Soybeans continue their consolidation trade, finishing May up 2 cents at $10.01 ½. Some help was found by the weaker US dollar but rally attempts were kept in check by expectations of huge harvests in South America. Crop analysts continue to raise estimates of Brazil’s ongoing soybean harvest to new records. A record harvest is also expected in Paraguay, the world’s fourth biggest soybean exporter. Only two of the last twelve sessions in the May contract have closed ‘green.’

Wheat futures declined for the second consecutive day reaching their lowest level in over six weeks. The weather forecast continues to keep production fears in check for now. Quality led price lower with May contracts down -10 in Minneapolis, -7 in KC and -3 ¾ in Chicago.

Live Cattle futures beat back initial selling on Tuesday, helped by futures’ discounts to last week’s cash prices. Profit taking and uncertainty about this week’s cash returns limited market advances. Given extremely profitable packer margins and tight supplies in parts of the U.S. Plains, market participants are unsure about this week’s cash prices. Brazilian meat scandal update: The USDA is inspecting all meat imports from Brazil. Switzerland has banned Brazilian meat imports all together.

Hogs continued their downtrend for the fifth consecutive day closing June down -1.050 at 76.325. For today, sell stops and technical selling pulled down CME lean hogs. With such large supply, bulls need a steady flow of strong export news for relief. The market will be watching tomorrow’s Cold Storage report scheduled to be released at 2:00 pm CT.

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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