Home Market Market Watch Closing Comments

Closing Comments


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Closing Comments


Corn could already be in the wait and see mode ahead of the USDA report next week.  Funds seem to be building their net short positions with open interest is up 53,237 contracts in the last five trading days. Support in the market could be coming from heavy rains expected for most of the Midwest slowing harvest down. Already hearing some reports of basis improving as elevators clear out of old corn without receiving new. The extended forecast after this rain event looks to be clear. Buenos Aires exchange reports corn plantings at 16.5% complete and acres expected unchanged at 5.4 million hectares vs 5.1 million last year. Monsanto has said they believe that first crop summer corn planting will be down due to slow seed sales with some estimating a decrease of 20-30%. Dec corn + ½


Soybeans closed strong today. A slow start to harvest could be even more supportive for beans as beans move through the pipeline quicker with stronger demand. Yields have started to come in mixed with a lot of questions still out there because we haven’t gotten to the later planted beans at this point. Central Brazil which has been drier is expecting some rains and those forecasts will be watched closely. Excess rain in Southern Brazil continues to delay planting efforts. Brazil exports showed them up 196% versus last September at 4.27 million tonnes. Shipments to China were up 313%. We continue to lag behind pace on exports at 38.1% of the USDA forecast compared to the 5 year average of 54.2%. Nov soybeans +4


Wheat made a small comeback today. Weakness yesterday due to beneficial rains into soft red wheat areas of Ohio, Indiana, and Eastern Illinois from Tropical Storm Nate. Buenos Aires reported that wheat planted area is unchanged at 5.45 million hectares but also stated that 51% of that is challenged with heavy rains that could limit fertilizer application. Areas of Australia could pick up ½ of rain over the next five days but Wester Australia could remain dry and any rain may be too late to save that area. Dec Chicago +2 ¾, KC +2 ½, MN +8 ¼   


Live Cattle finishing strong today and through yesterday’s high. No significant cash trade today. Carcass weights on cattle continue to trend about 7 to 8lbs under last year at this time. This will continue to be closely watched as we move forward with hefty up front supplies. Exports are up 9.9% over last year’s pace. Dec cattle +.875


Hogs close lower and give back a decent portion of the weekly gain. The recent move up in futures puts Dec hogs at a premium to the cash market by $7.20 when the average for this time of year is a discount of $8.00.  If the market does continue to rally in October it would be against seasonal tendency. In the last 20 years the market has gone down 17 of those years in the month of October. Dec hogs -1.875


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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