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Closing Comments


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Closing Comments

Corn closed out today’s trading session +1/4 at $3.73 (July). The corn market continues to trade in a similar range while trying to navigate the current large world/domestic stock numbers along with a desire to add risk premium amid typical summer weather. Oh, and do not forget the massive fund short position, but they did buy 2,000 contracts today. Ahead of this afternoon’s USDA progress and conditions report, traders expect conditions to improve slightly to 68% good to excellent. That compares to 74% a year ago and 71% long-term average for this point in the season. South American crop estimates continue to angle higher; AgRural raised the second corn crop in Brazil another notch taking it to 67.1 from 63.6, and USDA weekly corn inspections 1.177 mln tons for w/e June 1 vs expected 1.1 mln tons.


Soybeans traded north and south of unchanged throughout the day closing +3/4 at $9.22 (July). Ahead of this afternoon’s USDA progress and conditions report, traders expect soybean planting 79% – 84% complete compared to 79% last year and 81% in the long-term average. The USDA reported private sale of 120,000 mt of soybeans sold to unknown destination half the volume for the 16/17MY and the other half for the 17/18 MY. USDA weekly soybean inspections 277,298 metric tons for w/e June 1 expected 400,000. CBOT floor brokers report that fund have bought 1,200 contracts of soybeans.


Wheat closed unchanged today at $4.29 ½. Russia prices are up for a third week in a row with some minor crop concerns helping to support. Texas and Oklahoma released some early yield winter wheat number that came in below average implying that winter wheat producers should pick up the pace for harvesting the next couple of weeks. The USDA weekly wheat inspections numbers were below estimates at: 522,881 metric tons for w/e June 1 vs. expected 525,000.


Live Cattle complete a 5th consecutive trading session in the green closing +.150 at $126.2 (August). Traders have been waiting for the turn down in beef prices and a significant break in the cash market but weakness is slow to develop. With only moderate volumes of sales last week, packers did not acquire any super inventory. Purchases this week will be for a full slaughter week next week and will occur during a period of improving beef usage across the country. In world news, the livestock industry in Brazil says bankers have been ratcheting up requirements on cattle ranchers that have receivable due from JBS for cattle delivered. They also indicated that the woes of JBS have prompted ranchers to seek alternative meatpackers to sell their inventory.


Hogs traded lower again today in a big way closing -1.550 at $80.425 (July). The rally into the June 1 peak was led by strong pork exports and the idea that the US could see better demand from China; however, they did not. China is the only market showing a decline compared to last year down 36% from last year. April exports of fresh frozen and cooked pork were 155,790 mt, 6% higher than a year ago. Based on the weekly export data, April hog exports are expected to be about flat with last year.


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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