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Closing Comments


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Closing Comments


Corn found energy in dry Argentine weather and solid exports, +2 ¼ (Mar). December corn touched the 4.00 mark for the first time since last October. While to the South they are experiencing weather challenges, the soil moisture profile in much of the U.S. Corn Belt has greatly improved this month. USDA weekly inspection data showed corn loadings at 1,305,853 MT for the week ending February 22nd vs. estimates of 950K MT. Adding to that, the USDA announced a private sale of 125K MT of corn to “unknown” destination for 2017/18. The Commitment of Traders report showed more fund buying than expected, and fund managers are now in a net long position of roughly 50,000 contracts. There may be a showdown on RFS this week, with President Trump convening a biofuel summit with lawmakers.


Soybeans traded a mostly positive range of 13 ¾ cents before faltering, -2 (Mar). New crop beans were up +2 ½. Argentina’s dry weather continues to be main topic, while on the other hand Brazil’s production prospects are very optimistic (AgroConsult sees yield at 117 MMT vs 114 MMT last year).  So far the Argentine problem is considered greater than Brazil’s bumper crop. In exports, USDA soybean weekly inspections were right in line with estimates, 761,961 MT vs. 750K MT. Additionally, the USDA reported a private sale of 132K MT of beans to China for 2017/18. Technically, soybeans are overbought – will the market find a short-term peak?


Wheat reached double-digit highs in the winter varieties on strong technical action, with Chicago +7 ¼ and KC +8 ¾ (Mar). Winter wheat condition ratings will be released this afternoon and are expected to be bullish. Weather in the HRW Belt is providing support, as the S Plains did not receive needed moisture from the weekend event that hung out further to the east. In Europe, frigid temps with lack of snow cover is threatening parts of Europe and the Black Sea growing region. USDA export loadings data for the week ending February 22nd was less than stellar, announced at 280,243 MT compared to projections of 425K MT. Minneapolis HRS ended the session, -4 ¾ (Mar).


Live Cattle received a somewhat bearish Cattle on Feed Report on Friday afternoon, and responded in kind, -.850 (April). This week will be important for price direction, with weekly slaughter expected to increase in line with seasonal trends. With large numbers of cattle on feed, the size of the slaughter will matter and will be monitored closely. Carcass weights released last Thursday for the week of February 10th showed steers up 1# to 889#, which is 10# over last year. Heifer weights were 11# higher than last year, with heifer numbers up also.


Hogs suffered a setback, with the heaviest losses in the near months, -1.425 (April). Supply is more than ample, but demand is solid. Weekly export sales were reported to be at the highest level since April 16th, according to Hightower. Higher pork values and strong packer margins are also supporting the market. On the other hand, trade continues to struggle against bearish news from last week’s Cold Storage Report and higher weights. Friday’s CME Lean Hog Index was down -0.61 on Friday.


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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