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Closing Comments


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Closing Comments

Corn experienced Turnaround Tuesday to a small extent, as the market is looking for any signs of positive news, +2 at 357 ¾ (May).  The bounce is likely a reflection of the lack of bearish news against a backdrop of oversold conditions.  Corn planting in the US is ahead of schedule with Texas planting up 14% to 45%, Louisiana up 45% to 80%, Mississippi up 26% to 30% and Arkansas up 18% to 19%.   Looking ahead to Friday’s report, estimates range from 90 to 92.5 million corn planted acres.  The market will respond in kind, also taking into account quarterly corn stocks, which may be anywhere from 8.205 billion bushels to 8.9 billion bushels.


Soybeans were able to eke out a small gain also, + ½ at 972 (May).  There is nothing coming out of South America to give cause for excitement, as a crop scout, who traipsed through the Argentina countryside, upped his soybean harvest estimate by 1 MMT to 56 MMT, and Paraguay from 9 to 10 MMT (with some saying 10-11).  Brazil has about 70% of the soy harvest under their belt, and is showing average to very good yields.   Their weekly crop estimates show an optimistic 109-110 MMT vs USDA forecasts of 108 MMT.  The big question for Friday – are the new polls showing US plantings of 88.2 million soybean acres on the low or high side?  One would think anything 87.5 million or below would have to be considered bullish . . stay tuned.


May Wheat joined the rest of the grains with a positive turnaround today, with Chicago +3 ¾, Kansas City +2 ¾, and Minneapolis +1 .  Winter wheat condition reports released yesterday afternoon showed a mix of increases and decreases between good and excellent.  Wheat is under weather’s influence, and right now it is not leaning positive, as HRW condition ratings should get a bump next week from nice rains blanketing the area.  Export inspections yesterday were not as high as last week, but still well ahead of last year, 542K MT compared to 352K MT.  On the global scene, India is immediately imposing a 10% import tariff starting April 1st and extending until June 10th.  Ironically, it is thought that their 2017 crop will barely meet usage specs and may force them to import more wheat to fill up their hoppers.  China is looking to sell 459K MT of their wheat reserve. 


Live Cattle jumped to gains early aided by buying and futures’ discounts to cash prices, settling for a small gain, +.150 (June).  The average wholesale beef price declined $1.71 per cwt and select also fell by $1.93, according to the USDA.  Average packer margins are still a positive $50 but down over $30 from yesterday.  Tomorrow’s Fed Cattle Exchange will offer 3,900 animals and will likely provide direction for the cash market, as it is known to do on a weekly basis. 


June Hogs continued their descent toward key support, influenced by yesterday’s lower cash prices and generous supplies, -1.075.  There is some trepidation among traders ahead of the Thursday Hogs & Pigs Report, which is weighing on trade.  A bright spot has been the continued strong demand for pork exports and spring grilling.   


In Other news, bird flu in the US has raised its ugly beak again, this time with a reported case in Georgia.  They join the list of states including Alabama, Tennessee and Kentucky that have reported outbreaks this year.  This is always a topic to monitor as it could have implications for the market if the story continues to get legs.


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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