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Closing Comments

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Closing Comments

 

Corn traded in a tight range near unchanged today, – ¼ (Mar). Export sales continue to pile up for corn, as a private sale of 116K MT to South Korea was announced this morning. Other active buyers off the PNW have included Japan, Malaysia and Vietnam to name a few. South American weather forecasts over the weekend will be especially important, as the markets will not re-open until Monday night due to President’s Day. Ethanol margins continue to improve, as they are now estimated at a positive 5-7 cents. Look for results from the Commitment of Traders Report later this afternoon, which are expected to show managed funds to have pared their net short position all the way down to under 55,000 contracts.  

 

Soybeans showed a loss today, but a rally in the second half of the session recovered from a double digit loss, -2 ¾ (Mar). There was not a bearish development to speak of, but likely some of the red ink was due to profit-taking by traders and farmer selling. In addition to persisting weather concerns in Argentina, there are whispers that Brazilian prospects could be lower than expected due to lower early harvested yields and some white mold. It is a bit premature to make too many assumptions, with Mato Grosso harvest only 30% complete, but worth watching. In a worst case scenario for South America, yields could be down 13-16 MMT from last year.

 

Wheat continued its chop in its newly established range, -4 (Chicago). There is not much fresh news other than the Dollar rebounded today, which tends to influence U.S. wheat price negatively on the world market. Weather through the weekend will also influence wheat, but will be North American in nature, as the HRW growing region is being closely monitored. Kansas City HRW finished + ½ while Minneapolis HRS ended -4 (Mar).

 

Live Cattle was mostly positive in the near months, +.400 (April). Export commitments are providing support, up 20% over last year same time. It is thought that the USDA may be off by at least 6-8% to the low side on their annual export estimate. There is big production projected around the corner, so watch to see if demand can keep up.

 

Hogs continued to diverge in the opposite direction from cattle, -1.575 (April). April led the way and forged a new short-term low. While the futures discount to cash and oversold condition favored a bounce, sellers dominated trade today with thoughts of large supply looming ahead.

 

Markets are closed Monday in Observance of President’s Day.

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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