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Closing Comments


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Closing Comments


Corn found support in positive export sales numbers while fighting off the negative pull of beans, + ¼ (Mar). USDA weekly corn export sales were strong, coming in at 1,881,500 MT (31K MT for 2018/19) compared to expectations of 1.0-1.7 MMT. Corn is playing catch-up for the year, and has cut the deficit compared to last year to 20%. Export customers included “unknown”, Mexico, Japan, Colombia and South Korea. The USDA February WASDE report will be out next Thursday, so stay tuned for crop production and balance sheet changes.


Soybeans fell through both the 100 and 200-bar moving averages, before back peddling up to finish –10 ¾ (Mar). Weekly export sales announced today were not kind to soybeans, coming in at 409,600 MT vs. thoughts of 700K-1.2 MMT. For the crop year-to-date, soybeans sales are running 13% behind last year. However, meal and oil exports came in well above estimates – is this in response to an expected reduction in Argentine exports of these products this year? South American weather forecasts are virtually unchanged, with N Brazil slated for too much rain, while S Brazil and Argentina will continue the hot/dry pattern.


Wheat influenced negatively by soybean action, with the winter wheats trending slightly down: Chicago SRW – ¾ and Kansas City HRW – ¼. On the other hand, the Drought Monitor for the Central U.S. continues to raise eyebrows, with more dry weather on the menu for the next three weeks. U.S. winter wheat ratings were poor and will continue to reflect more of the same in the near-term. Wheat just missed the lower end of weekly export sales expectations, as they were reported to be 289,100 MT vs. estimates of 300K-600K MT. This puts wheat sales at 11% behind last year. Minneapolis spring ended, +3 ½ (Mar).


Live Cattle sported large bars on the charts to the upside across all months, with April finishing limit-up, +3.000. The Cattle/Calves inventory report yesterday afternoon showed an increase in the cattle herd for the 4th consecutive year, but was not a bearish surprise and seemed to have zero negative effect on trade. Based on the volume of supplies, cattle futures do seem to be overvalued and may be in line for more correction.


Hogs had large gains in February, while the deferred months also posted solid gains in response to the spike in beef. The large volume of trade has moved to April, were hog futures finished +.575. Hogs do not appear to have a lot of positive support, with weights increasing for the second week in a row in a time of historical decline. Slaughter is also running ahead of last year by 5.3%.


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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