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Closing Comments

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Closing Comments

 

Corn traded lower today closing – ½ at $3.50 (Dec). While the market may have already priced in a bearish supply outlook, with only 28% of the corn crop harvested, producer selling is a distinct headwind for the market going forward. With US weather ideal for harvesting the next seven days, a better weather outlook in Brazil and the continued uncertainty of NAFTA negotiations, the corn market continues to feel pressure. There were two sales reported by the USDA this morning. A Private sale of 146,000 mt of corn to unknown destination for the 17/18 MY, and a private sale of 115,000 mt of corn to Mexico for the 17/18 MY.

 

 

Soybeans continued to trade lower today closing -6 ¼ at $9.84 ¾ (Nov). The weekly US harvest update showed 49% complete compared to 36% last week and 59% last year. The 10-year average for this time of year is 60%. This is the third slowest harvest pace since 2000. The next week of Brazilian weather continues to be hot and dry, but looks as if dry regions are expected to get some much need precipitation relief late in Oct and into Nov. Safras & Mercado estimates Brazil’s soybean plantings at 10.8% complete compared to 17.3% last year at this time last year.

 

 

Wheat traded uneventfully today with Chicago -1 ¾ at $4.34 ¾ (Dec), KC – ½ at $4.33 ¼ (Dec) and MN +1 ½ at $6.11 (Dec). Currently the Midwest is looking dry; however, the eastern Kansas and Oklahoma growing areas are looking to receive about an inch of rain in the near future. Big crops in Eastern Europe, the black sea region and India have helped to drive world-ending stocks to a record high for the third year in a row making any gains difficult to sustain.

 

 

Live Cattle had a rough trading session closing –.550 at $111.175 (Oct). All eyes are on the USDA monthly cattle on feed report which will be released this Friday, Oct 20. Analysts expect the report to show on feed Oct 1 105%, placements during Sept 108% and marketings in Sept 103% vs 104%, 103% and 106% respectively on the previous report.

 

Hogs traded lower today closing -1.525 at $62.175 (Dec). Pork cutout values continue to advance in spite of supply. At any time, the large short-term supply could cause a downtrend in pork cutout values and could pressure. Increased slaughter capacity is currently helping to support the cash market but if pork product prices show weakness, the support could dissipate quickly. 

 

 

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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