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Closing Comments


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Closing Comments

Corn limped in on the last day before the USDA report at 3.57 ½ (May), -1.  Weekly export sales announced today were deflating for corn, as they were well below the expected 900K-1.2 MMT at 717K MT.  Last year, the next 10 weeks of spring sales were very impressive, so it is hard to see corn exports gaining ground from this point forward.  Additionally, there is talk that Mexico is looking to buy more South American corn, as rumors have them already securing at least one cargo.  Ukraine is also competing with the US for South Korean sales, as the Koreans have become the world’s 5th largest corn importer.  From a weather standpoint, the entire mid-section of the US will see a rain-train of multiple storms over the next several days, which should provide an excellent moisture base for planting season. 


Soybeans took up where they left off yesterday, down -6 to 9.63 (May).  Futures continued to follow a pattern of weakness, on the heels of selling in palm futures overnight and a fall in Dalian beans.  The market seems to be fixated on either the idea that the Friday report will show fundamentals are worse than expected or that another large US 2017 crop is on the way.  Export sales today appeared to be very strong at 681K MT vs. expectations of 350-550K MT.  However, a downward adjustment from last week of 207K MT took a little wind out of the sails.  On the bright side, the USDA reported a private sale to China for 2017/18 of 165K MT.  These have been few and far between with the seasonal shift of Chinese buying from South America. 


Wheat followed the other grains and a negative weather forecast, -4 ½ at the CBOT.  Kansas City also fell in line at -6 ¼, while Minneapolis posted – ½.  Wheat came in first place on the export board today, with announced volume of 464K MT sold, above the range of expectations of 250-450K MT.  This was their best showing in six weeks and hopefully will continue as the US has become very price competitive with the Black Sea region and others.  Wheat has been dependent heavily on the weather forecast, and at the present this is trending bearish, with a nice swathe of showers predicted to blanket the major growing regions of the US over the next couple of weeks. 


Live Cattle took a trip down the charts today, as a result of technical selling, – .975 at 110.875 (June).  Prices on the Fed Cattle Exchange this week were down to $131.17 per cwt compared to $133.35 last week.  Wednesday afternoon’s wholesale beef prices as well as select cuts also dropped, according to the USDA.  Export sales were down from last week’s 14,600 tonnes to 10,900 tonnes (mostly to South Korea).  Feeder cattle also followed suit with the May contract down, -1.550.


June Hogs reversed course after probing down to key support areas yesterday, +1.500 at 74.250.  It is thought that seasonal trends will spark futures, with grilling season coming into play, etc, helping demand.  Pork exports were down this week to 21,100 tonnes (mostly to Mexico) compared to last week’s 31,100.  The Hogs & Pigs report is due out at 2pm today and will be watched closely for market direction.


The USDA will release both the Prospective Plantings and Quarterly Grain Stocks reports at 11am CDT tomorrow.

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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