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Closing Comments

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Closing Comments

 

Corn traded on both sides of unchanged throughout the session closing +2 at 3.62 ¾ (Sept) and +1 ½ at 3.76 ¼ (Dec). The price fluctuation is thought to be based on whether or not forecasted mid-week rains for drier areas of Iowa and Illinois will come to fruition. Traders expect this afternoon’s crop rating to be 59% to 60% good to excellent compared to last year’s 74% and a 63% long-term average. Weekly USDA inspections did not meet expectations coming in at 756,935 MT vs. expected 875,000 MT. Managed money traders reduced their net long position yet again (-17,571 contracts) totaling 37,597 contracts over the past 4 weeks.

 

Soybeans fell to their lowest price since June during the session but managed to gain back ground closing -5 ½ at 9.32 ¾ (Sept) and -6 ¾  at 9.38 ¼ (Nov). The weather forecast for the week includes some much-needed precipitation for Iowa and Illinois. The rains are not expected to alleviate all dryness in the area; however, a nice soaking rain on the bean crop in those areas will still have a positive effect on final yield. Traders are expecting this afternoon’s crop rating to show soybeans 59% to 60% good to excellent compared to last year’s 72% and a 61% long term average. Weekly USDA inspections exceeded expectations coming in at 570,012 MT vs expected 450,000 MT. August beans go off the board today. Being a low volume month, no significant chart implications are expected on the roll to Sept.

 

Wheat, like the other grains, traded considerably lower of unchanged for a majority of the session and made a comeback towards the end of the day closing -4 at 6.70 (Minneapolis HRW Sept), -4 ½ at 4.36 ¾ (Kansas City HRW Sept) and +1 ¾ at 4.41 (Chicago SRW Dec). While weather is the main cause behind the other grains weakness, the funds continuing to liquidate their burdensome long position in both MN and KC is likely the cause of wheats fallout. Traders are expecting this afternoon’s crop rating to show corn 59% to 60% good to excellent compared to last year’s 74% and a 63% long term average. Weekly USDA inspections did not quite meet expectations coming in at 511,528 vs expected 515,000. In world news, Saudi Grains Org. announced it bought 660,000 MT of feed barley in a tender.

 

Live Cattle prices fell throughout the day closing -.675 at 109.050 (Aug) and –.800 at 106.600 (Oct). With beef prices down to the lowest level since February and slaughter up 10.7% from last week, the cash cattle trend looks to remain down. February cattle seems to have the supply fundamentals to find some support soon.

 

Hogs traded lower today closing -.200 at 84.450 (Aug). Slaughter is running 1-2% above last year but Hogs and Pigs data suggested we should be seeing slaughter up 3.5% to 4.0% above last year. Fourth quarter pork production is expected to be up 740 million pounds from the third quarter which would be the largest increase in 10 years.

 

Other News

The US Midwest Pro Farmer corn and soybean crop tour is scheduled to start Monday, August 21.

 

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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