Home Market Market Watch Closing Comments

Closing Comments

SHARE

cid:<a href=image009.jpg@01CE6CE4.660D8B30“>

 

Closing Comments

 

Corn had a hard time trending positive, with favorable planting weather taking center stage across the Corn Belt, -1 (Dec). Not to mention funds are heavily long, putting pressure on the CBOT. The USDA announced a private sale this morning, with 107,600 MT sold to “unknown” destination for 2017/18. However, weekly sales came in well below the range of estimates of 1.1-1.5 MMT, around 620K MT net with a 76,600 deduction for 2018/19. This was the lowest weekly tally in 15 weeks. Notable customers included Mexico, Japan and Colombia. Corn export prospects for the U.S. will get an opportunity to grow if the Brazilian second crop corn continues to get downgraded. However, at this point the USDA estimates corn export sales to lag last year by 3%.

 

Soybeans got support from a logistics issue and firm meal demand but also saw weakness from the escalating Chinese trade dispute, -1 ½ (Nov). As mentioned yesterday, a dock at an important port in Rosario, Argentina, was destroyed by a ship collision. This is notable as this dock loaded 22% of the Argentine soymeal exports, and it will be out of commission for 3-6 months. USDA weekly sales reported this morning were on the light side, totaling 537,800 MT for both marketing years. Expectations ranged from 800K-1.4 MMT. This was not a surprise as it has now been 10 consecutive days without a sale to the Chinese. However, weekly sales were still above the threshold needed to reach the USDA yearly projection, with purchases from Europe and Argentina providing an offset. The USDA is estimating 2017/18 sales to be down 5% from last year. Next week’s meetings in Beijing between U.S. trade representatives and the PRC will be closely watched, as stakes are high.

 

Wheat gave up a good chunk of what was gained yesterday with no fresh news to stimulate buying: Chicago SRW -9 ½, Kansas City HRW -5 ½ (July) and Minneapolis HRS -3 ¼ (Sept). Spring wheat seeding is up and running in the N Plains and Canada after a slow start due to spring snowstorms. Wheat was the only grain to offer a bright spot on the weekly sales log, as numbers exceeded the range of expectations of 50K-500K MT, pegged at 577,900. The sales were equally distributed between the two marketing years. However, it is likely wheat exports will be trimmed by another 25 mbu in the May WASDE Report.

 

Live Cattle had a setback today with a bearish engulfing bar on the charts, -1.225 (June). Selling liquidation prevailed, as losses were incurred across all the deferred contract months. Concerns of huge beef production to come in the weeks ahead are providing a limiting factor to recovery rallies.

 

Hogs took a pause yesterday from their steep descent, but resumed today as June finished -1.350. As with cattle, supply issues continue to come to the forefront and smother thoughts of rallies. Also, the large premium of futures to the cash market is a large hurdle, and will need help from strong export sales.

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.

www.waterstreet.org 
or 1-866-249-2528

 

 

 

 

 

Water Street Solutions Market Update |
Water Street Solutions® | www.waterstreet.org
309-680-1200 | marketupdate@waterstreet.org
Past performance is not indicative of future results. The information contained in this report is intended for informational purposes only and is the opinion of the writer and may change at any time. This information was compiled from sources believed to be reliable but accuracy cannot be and is not guaranteed. There is no warranty, expressed or implied, in regards to this information for any particular purpose. There is SIGNIFICANT RISK involved in trading futures and or options on futures and may not be suitable for all investors. Investors should consider these RISKS and evaluate their suitability based on their financial conditions. No one should ever consider trading futures or options on futures with anything other than RISK CAPITAL. This information is provided freely and is NOT in the capacity of a trading advisor. NO LIABILITY on the part of the author exists for any trading loss you may incur in the use of this information. Information provided is not to be construed as an offer to sell or solicitation to buy any commodity or security named herein.

The information contained in this e-mail message is intended only for the personal and confidential use of the recipient(s) named above. This message may be an attorney-client communication and/or work product and as such is privileged and confidential. If the reader of this message is not the intended recipient or an agent responsible for delivering it to the intended recipient, you are hereby notified that you have received this document in error and that any review, dissemination, distribution, or copying of this message is strictly prohibited. If you have received this communication in error, please notify us immediately by e-mail, and delete the original message. Water Street Solutions is an equal opportunity provider. Water Street Solutions is an equal opportunity employer.