Stewart-Peterson Market Commentary

Closing Commentary - April 24, 2015

Stewart-Peterson Closing Commentary 4-24-15

CORN HIGHLIGHTS: Corn futures moved lower today losing 5-3/4 to 7 cents with July leading today's drop closing at 3.69-3/4. New crop Dec closed at 3.88-1/4, down 6-1/4 and its lowest level since mid-Oct. Prices broke key support near the 3.95 area, and in turn, this accelerated the push downward and traders were either exiting or adding to short positions. Weakness in beans and wheat also weighed on corn prices today. The entire row crop commodity complex had a difficult session and difficult week. For the week, Dec corn closed 15 cents lower. With good weather forecasted for next week, planting progress is expected to be strong. Also adding pressure to prices this week is continued concern over avian bird flu. While there is debate as how much demand this may or may not affect, the perception is the overriding factor in the very near-term, and consequently, bearish for prices.

SOYBEAN HIGHLIGHTS: Soybean futures softened today following wheat and corn lower. Beans finished anywhere from 8-1/2 lower in May closing at 9.69-3/4 to 9 lower in Nov closing at 9.52-1/2. While not a stellar week for beans, prices held together quite well despite what we would term a sell off in corn and wheat. New crop Nov beans closed at 9.52-1/2, in line with last week's closed of 9.52-3/4. A potential truckers' strike provided underlying support for beans. On the other hand, talk of importing South American beans into the Southeast for soymeal and avian bird flu were both inhibitors from further price rally potential. From a technical perspective, both Thursday and today Nov beans challenged 9.65, the 50-day moving average and failed. Export sales were lackluster this week.

WHEAT HIGHLIGHTS: Wheat prices held together well this week, but not today. Prices came under heavy selling pressure, finishing with losses of 11 to 12 cents. Prices gave back all gains over the last six sessions as traders were quick to sell wheat once corn prices broke. News was lacking, and once prices began to slide, this may have allowed sell stops to trigger and push lower. We're concerned that wheat may have a chance to break into new lows. There wasn't much negative news, but prices went down easy, and this concerns us. That tells us that there is not a lot of buy orders underneath the market at any given time. Dry weather in the western Plains should be supportive.

CATTLE HIGHLIGHTS: Both live and feeder cattle continued their volatile way with strong gains again today for the second consecutive session. It's been quite a week with limit moves both up and down. By day's end, Aug feeders led the way higher closing at 215.27, up 2.32, and June live cattle led the way higher for market-ready animals closing at 151.15. April gained 1.92 closing at 161.22, in line with cash. For the week, April cattle gained 3.42. Keep in mind, however, that last Friday, April cattle lost 3.00. The much anticipated Cattle-on-Feed report was released and probably had a slightly negative slant. The numbers are as follows: On feed 100%, market at 98%, and placements at 100%. If the last couple of days rallies were predicated on expectation with either friendly placement or on feed number, we're not sure traders got what they were looking for. Therefore, the bounce in deferred cattle futures may very likely be viewed as an opportunity to hedge early next week. We'll see what Monday's activity looks like. Cutouts were off over 1.00 this morning. Yet, prices were higher. Unless cutouts come back early next week, the market may be seeing a near-term high in cattle. Lastly, slaughter was light at 105,000 versus last year's 118,000 for the same date.

LEAN HOG HIGHLIGHTS: Hog futures finished anywhere from 2 higher in May closing at 71.95 to 112 higher in June closing at 79.45. The near-term recovery continues, and we're encouraged with today's solid gains. June hogs finished the week at 79.45, a strong gain from last Friday's close at 76.27. Today was the strongest close in July hogs since early March. We like the technical picture, and we like the idea that beef prices have rallied back. Therefore, there could be a strong push on pork demand. As indicated yesterday, we're not sure if pork demand will pick up or be diminished due to avian bird flu. Our bias is that consumer may back away from poultry, at least temporarily, and buy pork. 




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