8/30/17

Morning Bullet Points - 08/30/2017

MARKET HIGHLIGHTS

  • Markets trading mixed overnight in a quiet trade.
  • First notice day for September futures contracts is tomorrow.
  • Weather is lacking of major rains to help beans finish off and is expected to cause some flooding as the hurricane works east.
  • Mexico is voicing concerns over changes to NAFTA.  Mexico has been the most active buyer of US corn in recent weeks.
  • Funds continue to be willing sellers as they establish new shorts at contract lows in corn.
  • Corn technically remains in the downtrend with major support for Sep. at 3.30 and Dec. 4.45.  Resistance for the Dec. is at 3.55.
  • Soybeans technically failed at moving average resistance early in the week with Nov. support at 9.30.  Resistance at 9.50.
  • Wheat technically put in a bullish reversal yesterday with support in the Sep. at 4.00 and resistance 4.30.
  • USDA reported 131,000 MT of soybeans to China for 2017/18.

 

WEATHER

  • Rains expected to cause some flooding across southern soybean areas in the next few days.
  • Much of the Midwest is dry over the next two weeks with below normal temperatures seen over that period.
  • As long as we do not see an early frost, the slow finish to the growing season should help yields.

 

OUTLOOK

  • Corn continues to run into selling pressure on any rallies as old crop corn is cleaned out ahead of harvest and funds build into a short position at contract lows.  If recent history is a guide, corn is about ready to rally as they’ve built their biggest net longs and net shorts in the market just before major turns.  National corn yield estimates are following the lead of the USDA and moving higher.  Corn should be near a seasonal low.
  • Soybeans had seen a decent bounce from mid-month lows.  Seasonally, they see some pressure as early bean harvest picks up.  Longer term, it looks like a low may be in, but we may need to consolidate near 9.30 before a move higher can happen.
  • Wheat put in a reversal yesterday.  Last week’s reversal fizzled out.  We will see what happens this time around, but “the funds” are short a lot of wheat at contract lows again.

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