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Closing Comments

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Closing Comments

Corn is probing for a short-term seasonal low ahead of the March 31st report (April 1st was last year’s spring low). Spot basis bids for corn were mostly steady to higher in the U.S. Midwest today as futures edged lower and farmer sales remained light. Weekly export sales came in above trade estimates as US corn continues to compete for export business. The corn acreage number seems to be creeping higher than the 90.0 million acres that the USDA World Outlook Board estimated. May corn closed -2 cents at 3.56 ¾, the lowest trade for 2017. Corn looks to be 3 to 6 cents from significant support as demand continues to be strong and selling ahead of spring will slow.  

Strong weekly exports in Soybeans couldn’t keep May from losing 8 ¾ to move to its lowest close since October 14th. Fund are long and the continued pressure from South Americas large harvest has at the low end of a recent 8-session consolidation. In an attempt to entice selling, some processors and elevators raised their basis bids. For example, a processor in Council Bluffs, Iowa, bids gained by as much as 5 cents per bushel.

Chicago Wheat continues to slide lower on cooperative weather. Chicago lost 1 ¼ today to close at 4.21 in May, not far from the December low of 4.06. Cooperative weather had the KC market under the most pressure, losing 4 ½ in May. The winter wheat belt is expected to get two separate storms.  Minneapolis/KC spread has exploded the last 12 sessions with Minn gaining more than 45 cents in the May contract. Rising open interest during the March break is suggesting that the funds are building an enormous net short position in Chicago.

Live Cattle fell for the first time in three days, as higher beef prices supported sharply higher trade in the cash market. Beef inventory in cold storage at the end of February was estimated at 502.4 million pounds, 0.8% less than a year ago but still about 6% higher than the five year average. The June contract gave up 0.975 of yesterday’s gain to close at 112.800.

Hogs collapsed early below the 200 day moving average in the June contract before a full reversal at noon to close $1.850 higher at 77.600. Total pork in yesterday’s cold storage at the end of the month was 572.0 million pounds, 9% less than a year ago and now 11.3% lower than the five year average

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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