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Closing Comments

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Closing Comments

 

Corn began the new month with a gain, +3 (Mar). Funds have turned to buying, as they are building in some weather premium, with La Nina uncertainty ahead and the South American growing season just getting started. Corn notched another sale today, with the a reported 130K MT to “unknown” destination. In outside markets, crude oil rose due to OPEC maintaining previously established production cuts and turmoil in Venezuela, and the Dollar showed weakness. Look to see if corn can get through current resistance – if so, 3.85 March may be achievable.

 

Soybeans found fresh enthusiasm with the new month, finding support in South American weather premium, +8 ½ (Jan). Argentina is not about to go quietly on the biodiesel import front, as government officials plan to travel to Washington D.C. next week to discuss eliminating or reducing the tariffs that have been imposed by the Commerce Dept. If they are unsuccessful, and the Commerce Dept. makes their final ruling in early February, Argentina’s only recourse would be to appeal to the WTO, which could involve years to resolve. Domestic soyoil supplies will continue to tighten and be supportive to the soy complex.

 

Wheat followed the lead of the other grains, with a move to the topside across all three complexes: Chicago SRW +5 ½, Kansas City HRW +6 and Minneapolis HRS +8 ¼ (Mar). Australian rains are giving the market a measure of strength, as excessive precipitation over southeastern Australia is putting 4 MMT of wheat at risk. This in an already greatly reduced production year due to an earlier drought, and will likely produce a wheat yield that is the lowest in a decade.

 

Live Cattle was down across near and deferred months, as Dec contracts will see “First Notice Day” on Monday. February was lock-limit down, -3.000. Beef exports were reported at a five week low, and recent sales are light. This, against a backdrop of large supplies and record-level production is pressuring the market.

 

Hogs have featured volatile trade of late, with big bars on the chart in both directions the last several sessions. Today, futures gained back a majority of what was lost yesterday, with Dec +1.000. Like cattle, large short-term supplies are keeping the market in check, while demand continues to provide support.

 

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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