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Closing Comments

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Closing Comments

 

Corn had a strong finish and was able to build on yesterday’s gains, +1 ½ (Dec). The crop progress update yesterday afternoon showed corn harvest well behind this year at only 38% complete, twenty-one points behind last year and average. South American weather has been trending favorable and the Dollar is rising, both adding pressure to the markets. However, with S.A. re-planting of soy in Mato Grosso, will this result in a decline of safrinha corn acres planted later this spring? Ethanol margins are on the rise, as they improved by 2 cents from Friday to Monday.

 

Soybeans had a Turnaround Tuesday, as the export front was quiet and there is little other news to dwell on, -5 ¼ (Nov). China is still proactively seeking more beans to purchase, although no new sales were announced today. The Dollar-Real spread is strengthening, which is helping Brazil to be more competitive than the U.S. in the bean export market. While the Commerce Dept. released anti-dumping duties on Argentina and Indonesia of between 50-70%, it was not new information and Argentina is already attempting to re-negotiate the imposed barrier. Soyoil charts are overbought in near-term, also slowing buying optimism.

 

Wheat was led by Minneapolis today, as it bumped into resistance at the 200-bar moving average, +3 ¾ (Dec). The winter wheats also finished up, with Chicago +1 ¼ and Kansas City + ½. The crop progress report showed winter wheat plantings 75% complete, which is 5 points off the average pace. Winter wheat is 58% emerged, right in line with average. Egypt has been a recent buyer, but they have announced that they now have ample supplies for four months. Other buyers currently seeking wheat include Jordan, Algeria, Iraq, Ethiopia, Turkey and Morocco.

 

Live Cattle flirted with limit-up today, finishing +2.775 (Dec). Any negative thoughts from the large placements last week in the Cattle on Feed report seem to be in the rearview mirror. The Cold Storage report yesterday afternoon reported total beef stocks up 11 million lbs to 488 million lbs for the month, but down 6% from last year. This is the lowest level since 2014. Beef demand has been above expectations.

 

Hogs returned to their march up the chart after some profit-taking yesterday, +.500 (Dec). Strength in the cash market helped drive gains to the top achieved yesterday. The Cold Storage report showed pork stock up 7% over last month, but 4% less than last year. Frozen belly stocks are down 17% from last year, as fresh demand has been strong enough to keep pork out of the freezer.

 

Closing Market Snapshot  

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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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