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Closing Comments


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Closing Comments

Corn May futures matched their April 7th low after losing 4 cents and closed at 3.57 ¾. Export sales came in at 848,200 tonnes, near the low end of expectations. As China lifts the curb on expanding industrial corn usage, the longer-term fundamentals have bit of a brighter tune. Capacity from refineries could increase by as much as 15-20million tonnes in the 2017/18 season. Funds were sellers again in corn, defending their current large short position and spilling over from today’s weakness in wheat. May corn options will expire tomorrow.


Soybeans saw little action today closing down 3 ½ in May at 9.46 ¾. This morning, the USDA weekly export report showed sales of soybeans fell to 225,000 tonnes (old-crop and new-crop combined), below trade forecasts for 400,000 to 800,000 tonnes. Soon, the record South American crop should move on the world market to add more pressure. However US prices are now competitive with Brazil and Brazilian farmers have been slow sellers. Chinese demand is strong and expected to support demand into summer.


Chicago Wheat futures dropped 1.2 percent to their lowest in nearly four months losing .12 ¾ in May, trading back to the contract lows from December. Investors were quick to beat back an overnight rally attempt amid a heavy global balance. The weather forecasts for the U.S. Plains and Midwest called for little pressure on winter wheat crops as they near maturity. Dry weather concerns out of Europe have yet to produce lasting price support in Chicago. Funds continue to maintain and defend their large net short wheat position. Export sales of wheat were 551,100 tonnes.


Live Cattle buying on Wednesday carried over into today’s trading session, with deferred contracts posting fresh highs, led by this week’s stronger-than-expected cash prices. Market-ready, or cash, cattle in the U.S. Plains sold from $130 to $133 per cwt, $2 to $5 higher than last week. The Cattle on Feed report will be released tomorrow.  Estimates are as follows: on feed 99.7%, placed 106.5% and marketed 109.4.


Hogs most actively-traded June contract closed off 1.275 at $68.675.  Amid ample supplies, downward spiraling cash prices and Wednesday’s wholesale pork cutout weakness the CME lean hogs contract was unable to make any gains. Today’s USDA export report showed U.S. pork sales at 36,200 tonnes, mostly for China, compared to 24,500 the week before. Technical support tomorrow in the June contract at 68.250.



May grain options expire tomorrow, Friday, April 21st.


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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