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Closing Comments


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Closing Comments


Corn traded in the newly established range of the last several days, + ¼ (Mar). Corn does not have a lot of upside momentum on its own, and vacillated between the positive and negative action of beans. Corn is not as affected by Argentina’s weather struggles, but will still be hurt by the damage likely done to early planted crop. Brazil has the opposite problem with too much moisture hampering second-planted corn. There is still a large amount of U.S. supply which is muting rallies. On the calendar this Thursday and Friday is the USDA Outlook Forum, which will include acreage projections and a full supply and demand outlook.


Soybeans traded a wide range of 19 cents today, with continued concerns over Argentine weather and the potential for reduced South American yield spurring more buying, +7 ¾ (Mar). New crop was +3 (Nov). Soymeal has been the leader and was up again along with soyoil. If soymeal were to roll over, this would be a troublesome signal. Also providing support to the overall grain market are a good supply of fund flows and the big picture inflationary influence. Export weekly sales reporting will be delayed until Friday due to the Monday Holiday. China has been quiet during their Golden Week festivities, and it is expected they will be placing orders in earnest on Monday.


Wheat exhibited weakness across the board: Chicago -2, Kansas City –6 and Minneapolis -2 ½. Potential areas to monitor related to weather include the U.S. HRW growing area and Western Russia and Europe. The HRW growing area has received rain over almost the entire belt this week, so the dryness concerns are temporarily on hold. However, across the pond, frigid temps are on tap with inadequate snow cover presently. Even though Russian wheat has gone up in price due to a rising Ruble, they are still the leading contender for bids. Egypt’s GASC announced another buy of 120K MT of Russian origin wheat. At current prices, others sources should also be competitive, and will be worth watching whether Russia will meet its match next time around.


Live Cattle futures plummeted today on profit taking, -1.500 (April). Feeders also were down across all months. Even though demand has been great, it is thought that the large supplies will ultimately get the upper hand. The Cattle on Feed Report will be out this Friday.


Hogs were able to forge out gains, against a backdrop of oversold technical indicators, +.700 (April). The strong global economy is a plus, as hogs are more dependent on exports than beef. And, the discount of futures to the cash market is providing 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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