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Closing Comments


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Closing Comments

Corn, under pressure from beneficial crop forecasts for production in Brazil, continued to fall today touching a seven-week low. May corn lost -2 ½ closing at 3.58 ¾. Spot basis bids were steady to narrowly mixed at U.S. Midwest elevators and ethanol plants. The U.S. Energy Information Administration said U.S. ethanol output eased 1,000 barrels per day and stocks of the corn-based biofuel declined to the lowest levels in more than a month.

Soybeans were a little weaker today and continue to trade in the same choppy range as the past two weeks. Rising forecasts for production in South America, combined with fears of a big increase in U.S. acreage this spring, continue to hang over the market. U.S. farmers are thought to plant a record 87.3 million acres of soybeans this spring, up from 83.4 million acres a year ago. Apart from Argentina, where soybean growing has become less attractive for political reasons, all key export countries are reaping their highest-ever crops in the current 2016/17 season. The USDA reported a sale of 120,000 metric tons of soybeans for delivery to China.

Wheat kept a its bearish tone today and touched its lowest level since the first week of January. Global wheat stocks are huge and even though U.S. plantings are down this year, yields are expected to be good. CBOT May soft red winter wheat was off -4 ¼ cent at $4.22 ¼ a bushel. USDA reported a sale of 120,000 metric tons of hard red winter wheat to Saudi Arabia early today.

Live Cattle, fueled by strong wholesale beef values, moved up sharply today. June gained $2.725 to close at $113.775. Solid wholesale beef movement, continued packer profitability and sparse cattle supplies in parts of the U.S. Plains bode well for cash prices. Global headlines continue to revolve around the unsanitary packer conditions reported in Brazil. The USDA cold storage report issued after the market closed showed total frozen beef at 502.4 mln pounds – slightly below year ago levels.

Hogs technical buying and Tuesday’s firmer cash prices pulled up CME lean hogs, said traders. June lost -0.575 to close at 75.750. Farmers are not holding back hogs based on lighter animal weights and explosive cattle market gains further support hog futures. In the cold storage report, total pork gained from last month but is at 91% of year ago levels. Bellies are at only 26% of year ago levels but did rebound from last month’s levels coming in at 115%.

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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