Stewart-Peterson Market Commentary

Closing Commentary - February 26, 2015

Stewart-Peterson Closing Commentary 2-26-15

CORN HIGHLIGHTS: After holding support levels yesterday afternoon, buyers continued to follow the corn futures as they finished 3 to 4 cents higher. March corn was up 4-1/4 to 3.80, followed by May up 4-3/4 to 3.88. New crop Dec was up 4-3/4 to 4.13-3/4. Corn futures are trying to find support near key technical areas as contracts rallied off of yesterday's close. They were still held in check by topside resistance. Demand concerns, as well as the price of US corn compared to the world offered resistance. The US dollar, breaking a point higher this afternoon, only helped aid the fact that US corn is higher priced compared to global competition. Yesterday's ethanol numbers have trade feeling that ethanol crush could be in slow down given the break in oil prices this afternoon and the profit margins faced with these distillers. Weekly USDA export sales for corn were at 28 mil bu, which were slightly disappointing. We will need to continue to see the export pace improve as we move forward. Corn futures saw some buying this afternoon as funds may have been liquidating long positions in the front-month March contract as we have first notice day tomorrow morning. Stepping aside March and rolling those positions to May or July was supportive in price. In addition, we are also at month-end and may be seeing position squaring as short could be looking to take profits moving forward.

SOYBEAN HIGHLIGHTS: Soybean futures continue their uptrend as contracts gained from 10 to 16 cents. March beans were up 16-1/4 to 10.24, followed by May up 15-3/4 to 10.26-1/2. New crop Nov beans were up 10-1/4 to 9.97. With today's close, bean futures have posted their highest close in nearly six weeks as the technical picture on the charts looks favorable in the short-term. Bean futures continue to see a boost as trade is digesting the impact of the Brazil truckers strike in terms of movement in the South American country. Talk late yesterday was that the strike was coming to an end, but there is still conflicts and some roadblocks blocking Brazilian transportation routes. Besides the geo-political events in Brazil, weekly USDA soybean export numbers were at 17 mil bu which has stayed supportive. Total commitments are well ahead of last year's pace and pushing the USDA target. The continued demand for US beans keep this market supported in the near-term. The short-term trend has been bullish and technically working higher. Yesterday's close above the 10.00 level in the front-months proved to be key support that could give us a springboard to the top. This move higher continues to provide producers a good opportunity to get beans priced as well as taking a look at opportunities to establish price support for next year.

WHEAT HIGHLIGHTS: Wheat futures bounced off of contract lows this afternoon to finish in positive territory as end of the month short covering helped give this market some support. Front-month March wheat was up 5-1/2 to 5.03, May was up 3-1/4 to 5.00-1/2, and July pulled back above the 5.00 support level, up 3 cents to 5.04-3/4. Lower overall wheat prices and slowing world export trade weigh on wheat futures here as well as in foreign markets. Today's jump in the US dollar only helped add additional pressure to wheat futures as the front-month contracts pushed through or challenged the Sept lows. At one time this afternoon, the July futures traded at 4.94 which was a test of new contract lows. End of the month profit taking off of short positions were probably the biggest reason for the end of the day rally into positive territory. Weekly export sales were at 12 mil bu which is improved in at the higher end of expectations but still not an impressive number to get this market to rally.

CATTLE HIGHLIGHTS: Cattle futures saw buyers step into the trade this afternoon as contracts finished 2.17-1/2 to 2.95 higher. April cattle were up 2.95 to 149.80, and June was up 2.87-1/2 to 142.95. The sharp triple-digit gains developed as the Feb contract expires tomorrow and the April contract is showing a steep discount to cash prices. The cash prices are ranging around the 1.60 level. April, at 149, is showing an 11.00 discount bringing buyers forward. In addition, liquidation off the Feb contract price and those buyers moving elsewhere helped give support to the beef complex. Boxed beef values have been strongly supported this week as closing beef cutout values were 54 cents higher for choice carcasses but 3 cents lower for select. This softened off of mid-days values as well as 2.00 plus gains for choice and select carcasses at yesterday's close. Cash trade has stayed relatively quiet, but bids are holding firm in the low 160's as packers are looking for more trade to develop as we move forward. Feeder cattle also posted triple-digit gains as the March feeders were up 3.32-1/2 to 200.300 as well as April cattle up 3.20 to 199.05. Feeder cattle responded strongly as spillover buying from the live cattle pit helped promote short covering. This rally in prices held despite some strength seen in grain prices, but overall grain prices continue to be relatively cheap on historical value. 

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