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Closing Comments

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Closing Comments

 

Corn traded up to  $4.09 today before rain relief came into the near term forecast causing the d word (drought) threat to lessen and price to fall back down closing +1^0 at $3.85 ¾ (July). Yesterday’s volume tripling the average trading action (1090830 contract traded) was likely caused by speculative fund short covering. Today’s close below $4.04 was not ideal for a large breakout, but keep a close eye on the forecast as rain makes grain. USDA export report actual 348,600 mt vs. expectations of 600-1.0 mln mt.

 

Soybeans managed to sustain their third consecutive day of increasing prices closing +7^2 at $9.38 (July). At this point in the growing season, hot/dry days are not as detrimental to soybean development as they are corn, but it is still cause for concern if continued throughout the month. Tomorrow’s conditions report is probably keeping what bullish traders that are left on the sidelines for now. USDA export report actual 159,100 mt vs. expectations of 350k-750k mt.

 

Wheat maintained its upward momentum closing +4^4 at $4.49 ½. With a close above $4.47, it is likely to spark continued short covering that could potential test the early May high of $4.61 ½. The USDA export sales report released this morning showed wheat exports were in line with expectations coming in a 461TMT. On the weather front, the good news for the KC wheat crop is that it is not yet in its reproductive stages. If the heat comes back in July, It will do much more damage.

 

Live Cattle traded lower today closing -0.150 at $124.025 (August). The bull camp continues to be in control, but a down turn in beef prices might be all the market needs to assume that a top is imminent. Cattle owners in Nebraska sold 6,000 head for 15-40 day delivery at $135. After that, prices on most cattle quickly moved to $140.

 

Hogs experienced a much different trading session than cattle closing +1.125 at $82.200 (July). With both China and Mexico pork imports from the US recovering from last week, there is plenty of optimism that the market will have a difficult time moving much lower until pork cutout values begin a more significant decline.

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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