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Closing Comments

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Closing Comments

 

Corn recovered well today closing + 8 ¼  at $4.13 ¼  (Dec18). Trading 245k contracts showed that yesterday’s reactive trade to the potential Chinese tariff was likely an overreaction. For perspective, over the last two years, the U.S. has exported less than 1mmt of corn to China. Ahead of next week’s monthly USDA supply-demand report, analysts are forecasting 17/18 US corn ending stocks at 2.190 billion bushels that compares to the 2.127 billion in the March report. Midwest famers continue to wait on warmer/dryer weather to start planting and soil temperatures in IA, MN & the Dakotas are in the 20’s and low 30’s. A year ago, those same soils were in the 40’s – 50’s at this point.

 

The bean market extended its recovery today closing +15 at $10.34 (Nov18). Buyers racing to buy exports before any potential tariff war takes place has caused a red hot basis mainly in Brazil. U.S. Gulf bids jumped 12 cents today to +65 for Apr-May which is up 27 cents overall from last week. Ahead of next week’s monthly USDA supply-demand report, analysts are forecasting 17/18 US soybean ending stocks at 575 million bushels that compares to the 555 million in the March report.

 

Wheat also closed higher today +8 at $5.20 ¼  (Dec18). Old & new crop U.S. wheat export sales were disappointing at just 4 and 7 million bushels, respectively. Ahead of next week’s monthly USDA supply-demand report, analysts are forecasting 17/18 US wheat ending stocks at 1.035 billion bushels that compares to the 1.034 billion in the March report.

 

Live Cattle traded higher today +1.275 closing at 114.300 (Apr). Imports from grinding beef suppliers have been lower than a year ago. Spot supplies of lean and extra lean beef are tight, causing imported grinds to trade at a premium to domestic. Overall, beef bounced back nicely today in a classic “buy the rumor, sell the fact” trade. Some spot cattle futures finished near limit up.

 

Hogs traded lower today -.625 at 52.450 (Apr). Buyers and sellers have stepped back from the pork market with China in the news ultimately slowing the pork pipeline. USDA pork cutout values released after the close yesterday came in at $68.77 down $1.32 from Tuesday and down from $69.34 the previous week.

 

 

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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