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Closing Comments


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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  


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