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Closing Comments


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Closing Comments


Corn was not able to generate much short-covering with a lack of substantial news, – ¾ (Mar). The USDA reported a private sale of 256K MT of corn to “unknown” destination for 2017/18. Ethanol is continuing to play a key role, as the EIA weekly reporting will be tomorrow. Ethanol had a brief recovery but has since sunk back near short-term support, with a majority of plants likely losing money today. Argentina weather is being closely monitored, as recent corn crop conditions showed 45% of the 1st crop to be poor/very poor. The next 10-14 day weather forecast there is also trending hot and dry.


Soybeans traded both side before fighting to a gain at the finish, +2 (Mar). November beans continue to stay above the vaunted 10.00 mark. Soybeans have been more responsive than corn to recent weather concerns in Argentina, due to beans being supplied by three major producing countries, whereas corn is more diversified. World stocks are strong and could absorb some interruptions to production, as long as not on a large scale. However, funds very net short position will play a role, as perceived concerns can be larger than reality in the near-term.


Wheat was led down today by the winter varieties, Chicago –4 ¼ and Kansas City –5 ¼ (Mar). The U.S. Dollar is providing support, as it dipped down below the 90.00 mark today. The ever-competitive Russian prices have risen to a three-month high, bringing the U.S. closer to desired business. But, the latest USDA report was not kind to wheat, and it will be necessary for protein issues to surface as the Spring timeframe approaches. With winter wheat conditions of concern in many areas, this is not far-fetched. Minneapolis spring wheat finished -2 ½ (Mar).


Live Cattle continued their break to the topside, led by the front month, +1.175 (Feb). Demand is helping to boost this latest run along with winter storms in the Plains helping to slow down slaughter action due to plant closings. This could also slow weight gain in the short-term, according to Hightower. The cash markets are strong, so stay tuned for the Cattle on Feed report this Friday.


Hogs lost ground in all the deferred months, as February made a modest gain, +.475. The market has mixed forces applying pressure as big production ahead could be considered bearish, while rising pork cut-out values are supporting the trade. NAFTA talks this week will be closely watched as Mexico consumes about 30% of U.S. pork exports.


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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