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Closing Comments


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Closing Comments

Corn was able to stay positive, building on yesterday’s small gain, + ¾ at 358 ½ (May). After the U.S. Energy Information Administration showed supplies growing to a near record of 23.257 million barrels, Ethanol futures on the Chicago Board of Trade fell more than 1 percent to their session lows at mid-morning. The EIA report also stated ethanol stocks increased 662,000 barrels to the highest levels since the week ended March 6, 2016. Friday report estimates remain steady between 90-92.5 million corn acres.


Throughout the day, May Soybeans moved slightly lower closing at 969, -3 (May). Given the oversold nature of the market, increased short covering is likely to continue prior to Friday’s report. 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 . . . again.


May Wheat was mixed today, with Minneapolis being the winner, +8 ¼. Chicago was up +1 and KC – ½.  For upward action in the market, wheat continues to be dependent on some favorable rains next week. On the global scene, Jordan bought 50,000 tonnes hard wheat sourced from optional origins in tender.


Live Cattle moved higher today closing at 111.850, +.250 (June). Both short covering and futures’ discounts to this week’s cash price expectations caused the move. Packers may push back against bidding up for cattle given their declining margins as wholesale beef values soften. Processors have plenty of cattle contracted against the futures market at their disposal. Nonetheless, there are fewer animals for sale than last week and some supplies remain tight – especially in the northern Plains.


June Hogs made a small rebound after reaching down to key support, finishing +.300 at 72.750. Short-covering and bargain buying periodically lifted CME lean hogs that at times were pressured by lower cash and wholesale pork prices. Positioning before Thursday’s U.S. government quarterly hog report pressured deferred contracts.


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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