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Closing Comments


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Closing Comments


Corn was able to springboard off Turnaround Tuesday, with December futures up +3. Planting progress is showing corn at 39% complete, which was in-line with expectations and not far off the average of 45%. IL and IN are ahead of average, with IL farmers touting big numbers, planting 42% of the state in one week. The northern states are well behind but should be able to make up ground the next few days. A question to be answered on Thursday by the WASDE Report is how much the USDA will reduce Brazil’s production, with safrinha corn light on precipitation and receiving downgrades almost across the board from private analysts. Ethanol has continued to be a bright spot with margins around 5-10 cents/gallon, along with strong DDG prices. President Trump is meeting today with lawmakers and industry reps to continue discussions centering around RINS/RVP waivers and expanding E-15 sales during the summer months.


Soybeans experienced a modest turnaround from yesterday’s free fall, +7 ¼ (Nov). Funds have maintained a sizeable net long position, which has seen long liquidation this week from the lack of resolution between the U.S. and PRC. However, on a positive note a Chinese delegation with be coming to Washington D.C. next week to continue negotiations. Planting progress went from 5% last week to 15% complete this week. This is ahead of the 13% average, with the northern states bringing up the rear.


Wheat showed mixed results: Chicago SRW +3, Kansas City HRW –1 ¼ (July) and Minneapolis HRS +2 ¾ (Sept). The Plains have received more favorable weather, taking the edge off HRW concerns, while soft wheat had a small bounce back after two days of large losses totaling around 25 cents. Wheat conditions yesterday showed virtually unchanged, with 34% good/excellent and 37% poor/very poor. Spring wheat is running behind on planting, at 30% complete vs the average of 51%. The Dollar is not helping, as it is into near 6-month highs, making U.S. wheat that much less price competitive. Russian dry weather and other global areas of concern seem to have gotten some reprieve, as SW Russia and Ukraine look to be receiving rain the next 10-14 days.


Live Cattle broke out to a new short-term high in the June contract, +1.125. Beef prices have also continued to appreciate to the highest level since June 28th. The USDA estimated cattle slaughter last week to be up 5.2% over last year same time.


Hogs gapped higher from the opening bell, with June finishing +2.125. Even though supply is stout, the pork cut-out has gained to its highest level since March 20th on strong demand. The CME Lean Hog Index has continued to climb, up to 63.13, and more into normal alignment with June futures.

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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