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Closing Comments


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Closing Comments


Corn traded positive early, but farmer selling and profit-taking had more muscle, -2 (Mar).

It is expected that managed funds will tip the scales in favor of “net long” by the end of the week. The Commitment of Traders Report on Friday showed a swing of 83,000 contracts to the buy side from one week to the next. USDA export inspections were right in line with estimates this morning, coming in at 938,099 MT for the week ending Feb 15th compared to thoughts of 900K MT. Providing market support is the fact that Midwest ethanol producers are showing solid profitability, as ethanol has been a big key for corn usage. In other news, Safras Mercado has pegged Brazilian corn production at 89.46 MMT, which is 17% lower than last year.


Soybeans rallied ferociously early in the session before backing off to a modest gain, +5 (Mar). November joined but at a slower pace, +3. With the current dry Argentine forecast and farmers there unwilling to let go of soybeans in the cash market, Argentine crushers are having some real problems procuring the supplies they need to produce soymeal. USDA weekly export inspections were slightly above expectations at 960,066 MT vs. 925K MT. It is thought that with the Argentina situation, the export pace may pick up this summer and allow the U.S. to make up ground on last year in its attempt to come into line with the USDA annual projection.


The Wheat complex featured profit-taking and weakness from a gaining Dollar, -8 ½ (Chicago). KC and MN were –6 ¾ and –1 ¾ respectively. Weather is trending more favorable across the Plains, which is keeping thoughts of rallies in check. Drought has been a big concern, as it was reported on AgDay by a producer from near Guymon, OK, that they have not received any moisture in almost 130 days. 100% of OK is under some kind of drought according to the Drought Monitor. USDA weekly export loadings data pegged wheat at 422,298 MT vs. expectations of 455K MT. Europe and Western Russia may have a weather issue to deal with also as they are slated to receive frigid temps with a lack of snow cover protection.


Live Cattle fought back for a positive close, +.075 (April). Strong demand has given feedlots the advantage as some packers are under bought. Previous Cattle on Feed reports have indicated large supplies out in the future, and that is still on the minds of traders. Will the May timeframe offer more pressure on cattle futures?


Hogs sported the usual volatility that seems to be their trademark, +1.050 (April). Technically, hogs are oversold and may be near a short-term low. Friday featured a sharp sell-off, but today a correction was in order.


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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