Stewart-Peterson Market Commentary

Closing Commentary - April 27, 2017

Top Farmer Closing Commentary 4-27-17

CORN HIGHLIGHTS:Less-than-ideal weather conditions and strength in wheat helped provide underlying support, pushing corn prices 2-1/2 to 3 cents higher with May leading today's gains, closing at 3.62. New crop Dec gained 2-1/2, closing at 3.86-3/4. Along with a forecast that shows much of the Midwest to be wet over the next 4-5 days, the 6-10 day forecast does give the western Corn Belt a below-normal precipitation outlook. This could help that region plant corn more aggressively toward the end of the first week of May. Export sales at 39 million bushels for old crop were considered supportive, and well above the 12.6 million bushels needed a weekly pace to meet USDA projections. Yet, a rain-makes-grain mentality continues to keep prices in check, as odds favor once this wet pattern pushes through, farmers can pick up steam as they plant aggressively.

SOYBEAN HIGHLIGHTS:Soybean futures finished quietly, with May unchanged at 9.45-3/4, nearly 5-cents off today's high. New crop Nov closed 1/2-cent higher at 9.54-1/2 in a range-bound day in which the high was 9.57-1/2 and low 9.52-1/4. Prices continue to mark time, awaiting further news for direction as the 9.50 area holds as support for new crop. The most recent 6-10 day outlook has something in it for everyone, and the market behaved as such today in soybeans. Export sales, however, were outstanding at 29.7 million bushels old crop. This brings the total year-to-date sales to 2.072 billion bushels, or nearly 2-1/2% above the USDA's most recent demand projection of 2.025 billion bushels.

WHEAT HIGHLIGHTS:Wheat futures picked up ground today, gaining 4-3/4 to 5-3/4 cents, as May Chi led today's rally. Mpls wheat closed 1 to 2-1/2 higher with expectations of moderating temperatures, as well as rainfall, viewed as supportive for plant growth. KC wheat was today's winner, gaining anywhere from 7 to 8-1/2 cents, as some recent rainfall totals, as well as expectations are for too much rain. Traders were also buying wheat as corn prices continue to stabilize.

CATTLE HIGHLIGHTS:Cattle futures had an extremely strong session today on friendly cash trade numbers and good export sales numbers. Apr futures closed 3.57 higher to 135.60, and all contracts from Jun 2017 to Apr 2018 closed limit higher. Jun closed at 121.52, and Aug closed at 117.77. Buying interest kicked off the session with a reaction to the export sales report released this morning. Weekly beef export sales for the week ending 4/20 were reported at 21,200 metric tons, vs a previous 4-week average of 16,350 metric tons. Cumulative sales for the 2017 marketing year are at 345,500 metric tons, 24% ahead of last year's pace. With this news, cash bids in the country were first reported at 135, then actual reported sales were 137 to 140. This sparked the limit up gains mid-morning. Because Apr futures go off the board Friday, there are no limits on daily trade, hence the high of the day of 137 actually came within 1 tick of trading 5.00 higher on the day. The market is now extremely overbought, though it is unclear as to when it will correct. Long liquidation going into the weekend is not out of the question, especially considering the profits cleared in both short and longer term trades.

LEAN HOG HIGHLIGHTS:Hog futures closed with triple-digit gains on softer NAFTA rhetoric by the White House last night and strong export sales. The nearby May contract closed 2.25 higher to 66.90, Jun closed 2.07 higher to 72.82 and Jul closed 2.27 higher to 74.02. Pork export sales for the week ending 4/20 were reported this morning at 23,000 metric tons, just below the previous 4-week average of 25,800 metric tons. Cumulative sales for the 2017 calendar year are currently running 8.1% ahead of last year's pace. With Trump appearing unlikely to withdraw from NAFTA at this time, exports should remain strong. Mexico is the #2 importer of US pork, and Canada is the #4 importer of US pork. Keeping trade ties at least cordial with our neighbors to the North and South is friendly market-wide. Lots of buying interest entered the hog complex with the surge in cattle markets. Carcass cutouts were up 55 cents from yesterday, sitting at 74.02 at midday. Most cattle contracts traded through their 10 and 20-day moving average levels, which puts the 200-day moving averages in the bull traders' sights.

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