5/8/17

Morning Bullet Points

MARKET HIGHLIGHTS

 

 

 

  • Markets trading lower overnight on a more favorable forecast over the next couple of weeks as well as reports of good planting progress over the weekend.

  • Friday’s commitment of traders report showed managed funds as net buyers of 12,000 contracts of corn, net buyers of 500 soybeans, and net buyers of 38,000 wheat.  That reduced the net short in corn to 184,000, reduced the net short in beans to 47,600, and reduced the net short in wheat to 124,600.

  • There looked to be a large player exiting corn/wheat spreads, which showed selling corn/buying wheat.  The buying in wheat is being reported as greater than expected, but I am not so sure of that.

  • USDA will be out Wednesday with their first balance sheets for the 2017/18 marketing year.

 

 

2016/17 US Ending Stocks

Actual

Average

Range

Last Month

 

Corn Stocks

 

2.326

2.269-2.500

2.320

 

Soybean Stocks

 

438

417-466

445

 

Wheat Stocks

 

1.162

1.2-1.145

1.159

 

 

 

 

 

 

 

 

2016/17 World Stocks

Actual

Average

Range

Last Month

 

Corn Stocks

 

223.3

221.5-228.8

222.98

 

Soybean Stocks

 

87.833

86.1-89

87.41

 

Wheat Stocks

 

252.162

250.7-253.2

252.26

 

 

 

 

 

 

 

 

2017/18 US Ending Stocks

Actual

Average

Range

 

 

Corn Stocks

 

2.120

1.835-2.4

 

 

Soybean Stocks

 

555

420-759

 

 

Wheat Stocks

 

1.014

842-2.320

 

 

 

 

     

 

 

2017/18 World Stocks

Actual

Average

Range

 

 

Corn Stocks

 

209.72

190.7-225

 

 

Soybean Stocks

 

86.59

80.5-94

 

 

Wheat Stocks

 

246.145

238-257

 

 

 

2016/17 South American Production

Actual

Average

Last Month

Arg. Corn

 

38.5

38.5

Arg. Bean

 

56.2

56

Brz. Corn

 

94

93.5

Brz. Bean

 

111.3

111

 

  • There is a lot of time for the 2017/18 numbers to change, but the key take home to start will likely be that we are going to have another year of large supplies of corn/soybeans/wheat.

  • Crop progress out this afternoon with corn planting expected to be near 45% and soybean planting 15%.  Both of those numbers would be far enough along to think trend yields are still possible.

  • Corn technically remains stuck in a range with support in the mid-3.60’s and resistance in the mid-3.70’s.

  • Soybeans technically remain in their longer term downtrend, and after the bounce off lows, there is quite a bit of room to the downside before the market will be oversold.

  • Wheat remains range-bound as well with support in the mid-4.30’s and resistance in the 4.50’s.

 

WEATHER

  • Wet weather over the weekend was seen on the east end of the corn-belt, but most areas were dry with good planting progress being reported.

  • The forecast has chances of rains over the next two weeks, but there should be breaks from the rains, which should prevent any major delays.

  • Cool temperatures in SRW areas yesterday and today were not as low as was feared going home Friday.

 

OUTLOOK

  • No major changes to start the week.

  • The weather looks good enough to think corn/soybean planting progress rolls along at a pace that makes trend yields possible for both.

  • Corn remains range-bound as producers sell rallies and end-users buy breaks.  With the lower acres, there is potential for a bull market if we see adverse weather, but I do not think the market is ready to move higher on that yet.  Conversely, there is enough weather risk to prevent sellers from pushing the market sharply lower right now as well.

  • Soybeans have the most bearish situation moving forward.  Big acres and growing stocks after the big SA crops.

  • Wheat probably has the best potential for a bull market as record low acres would mean ending stocks drop significantly on any disappointing yield this year.

  • I think corn and wheat likely remain range-bound going into the USDA report Wednesday while soybeans look to have potential to work lower here today.

 

 

Want Updates?

Keep up with our market interpretation news and other important info. To receive text or email updates, simply click the button below and fill out the form.

Get Updates