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Closing Comments

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Closing Comments

 

Corn acted in step with wheat’s bullishness today, finding support in big export numbers and a slow start to planting season. Dec corn finished +2 ¼ at 4.14 ¾. USDA weekly inspections were announced at a whopping 1,937,040 MT for the week ending April 5th, compared to estimates of 1,250,000 MT. This is the second highest weekly total on record and makes the argument for a 50 mbu increase by the USDA to U.S. corn exports. The April USDA Report does not normally result in big volatility, but will be watched closely this year with potential bullish developments on the world scene.

 

Soybeans got a big boost ahead of the USDA Report tomorrow, as trade war chatter regarding China has seemed to smooth over in hopes things will be worked out. President Trump has been making an effort to calm nerves, as he has indicated he will stand with American farmers, who he considers “patriots”. This could be done with Section 32 of the recent Omnibus Bill, which could take funds from custom duties and use them in a way that would return to the farm community. Details would need to be worked out, but at least there is a positive tone that has been set. While China may want to avoid U.S. beans, they are somewhat caught as Brazilian basis has risen, and China needs beans. In that vein, a private sale of 232,500 MT was reported to “unknown” destination for 2018/18. November soybeans closed +10 at 10.43 ¼.

 

Wheat led the charge of the grains to open the week, with snow/cold in the Dakotas/Midwest and dry conditions across the southern Plains, coupled with a weak Dollar which has fallen below 90.00. USDA weekly inspection data indicated a good week for wheat, with an announced 430,080 MT compared to the expected 350K MT. The U.S. has exported 9.4% less than last year, as Russia has been a formidable competitor. Look for winter wheat condition reports later this afternoon, which are estimated to be 31% good/excellent. Chicago +17 ½, Kansas City +16 ¼ and Minneapolis +17 (July).  

 

Live Cattle were mixed with the front month April showing a modest loss, -.200. Cattle continues to search for a short-term low, as supply and demand continues to battle. The bounce in equity markets helped to stem the tide of selling and the negative vibe over the complex.

 

Hogs had a big recovery bars on the charts today, with April up modestly by +.775 and the deferred months approaching limit up territory. Trade war fears seem to have abated, and buyers reacted in kind.

 

USDA Crop Production and Supply & Demand Report tomorrow at 11am CDT.

 

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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