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04/21/2024 Sunday Market Preview

By The Commstock Report
Follow-through interest will be tested after the grains posted a firm close on Friday. The overall tone of the grain trade is likely to largely depend on which directions oil and the dollar index are heading. In the Headlines A strong close on Friday limited the weekly loss for May corn futures to 2 cents. May beans were down 23 1/2 cents last week. May Chicago wheat was down 5 3/4 cents while May Kansas City wheat dropped 8 1/4. April cattle were up $2.57 and April feeders gained $3.72. June hogs were up $2.75 for the week. The House of Representatives voted on Saturday to pass a spending package worth $95.5 billion that includes $61 billion for Ukraine, $26.4 billion for Israel, and $8.1 billion "to counter China's actions in the Indo-Pacific" (protection for Taiwan). As the federal government is taking on new debt at relatively higher interest rates, the total cost of servicing the deficit amounts to 36 percent of annual tax receipts – the highest level in 27 years. Interest costs could increase by almost another 50 percent by the end of the year if the central bank does not reduce rates. The Environmental Protection Agency issued…
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04/14/2024 Sunday Market Preview

By The Commstock Report
Grains have support to follow through on a firm close from Friday. Traders will again be looking for guidance from oil and the outside financial markets. In the Headlines May corn futures gained 1 1/4 cents last week, with nearby beans down 11. May Chicago wheat was down 11 1/4 cents while May Kansas City wheat gained 7 1/2. April cattle was up 65 cents and May feeders fell by $3.97. April hogs were up $1.55 for the week. Iran launched missile attacks on Israel over the weekend in response to Israel's recent strike on the Iranian consulate in Syria. The Israeli military reportedly intercepted 99 percent of the missile offensive. Iranian officials indicated that there would be no further operations, which may be a point of relief for the market. Oil futures traded up to a six-month high in anticipation of the conflict, with the nearby WTI crude contract finishing the week at $85.45. Kansas City wheat futures were seen briefly taking on a leadership role last week as doubts crept in about conditions for hard red wheat in the Southern Plains. Drought was expanding again throughout the region after some of the crop had recently been threatened with…
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04/07/2024 Sunday Market Preview

By The Commstock Report
Grains are called steady to slightly firmer at the open as traders look to gauge the tone of oil and outside financial markets. In the Headlines May corn futures lost 7 3/4 cents last week, with nearby beans down 6 1/2. May Chicago wheat was up 7 cents while May Kansas City wheat lost 3. April cattle dropped $6.75 and May feeders fell by $10.52. April hogs were up $2.70 for the week. May WTI crude oil futures jumped $3.72 while gold rallied to a new record high. The dollar index inched slightly lower. Ohio became the sixth state with a case of the highly pathogenic avian influenza (HPAI) virus detected in a dairy cattle herd. HPAI cases had previously been reported in Texas, Kansas, New Mexico, Michigan, and Idaho. Last Monday, it was announced that HPAI had infected a person in Texas. Also a concerning development from last week was that the bird flu had been detected in cats from one of the affected farms in Texas. Tennessee, Nebraska, and Hawaii have enacted restrictions on cattle movement in response to the risk. Cattle futures have sold off sharply as speculators liquidate their positions due to uncertainty surrounding the bird…
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03/31/2024 Sunday Market Preview

By The Commstock Report
RECCO UPDATES FOR CORN AND SOYBEANS: On 3/19/24 we advised clients wishing risk protection against bearish numbers on last Thursday's reports to buy May 470 short-dated new crop put options for 12 cents or less on up to 50% of expected corn production.  We advised the same for soybean producers, but with May 1180 short-dated puts at 26 cents or less on up to 50% of expected production. As it turns out, Thursday's corn numbers were actually price-friendly and soybean numbers mostly neutral so we now advise selling those options for whatever premium is left to reduce the net cost of the protection. They served their purpose. Grains are called to open steady to slightly firmer in follow up of a strong close ahead of the weekend. In the Headlines Corn and winter wheat futures rallied on Thursday in response to a friendly Prospective plantings report. The report was also a touch supportive for the new-crop soybean contracts. Corn planting intentions were well below the average trade guess, but the rotation to soybean acres was not any larger than expected while cotton and sorghum acres also did not rise by as much as thought. The total acreage mix was down…
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