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Closing Comments

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Closing Comments

Corn had a quiet trade, closing +1 ½ at 3.67 ½ in May today and gaining 3 ¼ for the week. In the absence of new fundamental news, the recent rally from multi week lows has run out of steam for this week. The corn rebound over the past four days has firmed the price but hit technical resistance at the 100-day moving average bar. A weakening U.S. dollar, which makes U.S. commodities more attractive to overseas buyers as well as investors looking for a hedge against inflation, also provided some support. The next focus for the market is the March 30 planting intentions report. The weekly chart moved back above trend-line support, helping to turn the charts more friendly. This past Tuesday’s low will be seen as a critical low to hold now moving forward.  

 

Soybeans continued their consolidation trade, closing -1 ½ at 10.00 in May and losing 6 ½ for the week. Today was the ninth decline in ten trading sessions.  Many crushers have sufficient supplies on hand while export demand for U.S. soybeans is slowing seasonally as beans from a record-large Brazilian harvest start to flow to export ports in South America. The weak dollar/strong real is reducing the incentive for aggressive South American selling. Technically the soybean charts continue to consolidate at trend-line support, struggling to find fresh sellers ahead of the March 30 report.

 

Wheat eked out positive gains today closing +1/4 at 4.36 ¼. After consolidating above this week’s low, it waiting fresh direction. Pressure from ample old crop is offsetting support from dry conditions in the Plains and freezing temperatures in the Midwest. For the week the May contract lost 4 ¼ in Chicago, -2 in KC but gained 10 ½ in Minneapolis. The weekly Minneapolis chart looks the best of the bunch with the continuation chart posting a ‘bullish engulfing’ bar – which should point to a supportive market next week.

 

Live Cattle gained modestly today closing April +0.125 at 119.325. Sporadic profit-taking encountered bear spreading, where investors were selling April futures and buying deferred contracts. Packers this week upped cash bids to capitalize on extremely wide profit margins and brisk retail beef buying to prepare for spring grilling.

 

Hogs fell for the third consecutive day closing April -0.850 at 69.050. Both softer cash and lower wholesale pieces weighed on CME lean hogs.

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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