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Closing Comments

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Closing Comments

Corn inched lower to finish the week on sympathy weakness to soybeans. May lost ½ a cent to close at 3.56 ¼, its lowest closing price since the end of December. For the week, May lost 11 ¼ or 3.0%. Cooperative weather in South America continues to weigh on the market. However, the  market has moved into an oversold condition and extracted most weather premium before planting has begun. The wetter forecast in the US over the next several weeks combined with the funds now well short their corn position and farmer selling halted should mean a bottom to the market shortly. Look for May to find support in the 3.52 to 3.55 area.

Soybeans dropped 15 ¼ cents in the May to the lowest level in more than four months on pressure from rising forecasts for already robust South American harvests and weaker meal values in China. Weakness in the cash market added further pressure to soybeans. Throughout the trading session, spot basis bids fell by 5 cents per bushel at a closely watched processor in Decatur, Illinois. Technically, soybeans have moved into an oversold position and should find stability next week as they have entered a value area ahead of the planting season and the March 31 intentions report.

Wheat stabilized to finish the week after spending the previous four days pricing in moisture for the dry areas of the plains. K.C. hard red winter wheat struggled to find the same price support as Chicago while spring wheat traded the weakest of the complex.

Live Cattle turned up slightly in choppy action on Friday, consolidating after Tuesday and Wednesday’s strong markets and anticipation of higher prices for unsold slaughter-ready, or cash cattle. On Thursday, a small number of cash cattle in Nebraska brought $134.50 per cwt, up from $131 last week; however, Southern Plains cash bids stood at $126 per cwt versus as much as $134 asking prices. Today’s Cattle on Feed report showed On Feed at 100%, matching the trade estimate. Placements met trade expectations at 99% while Marketings came in at 104% vs the estimate of 103%.

Hogs reversed yesterday’s fortunes to finish the week. April contract was down 0.625 cent per pound to 68.725 cents, and May down 0.100 cent to 73.850 cents. Profit taking, stirred by Thursday’s lower cash and wholesale pork prices, pressured CME lean hogs. Packers resisted raising cash bids after their margins and pork cutout values declined. Brazilian meat industry group ABPA said that in wake of the investigation into alleged corruption among food inspectors, pork and poultry exports have fallen by $40 million, or 22 percent.

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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