8/25/17

Morning Bullet Points 08-25

HAPPY FRIDAY—

 

MARKET HIGHLIGHTS

  • Markets trading mixed overnight in a pretty quiet trade.
  • CFTC report this afternoon expected to show heavy managed fund selling across the board.
  • Pro Farmer yesterday found an average IA corn yield of 179.79 bpa, down from 188.17 last year and 3 year average of 182.3 bpa.
  • Pro Farmer corn yield in MN was 191.5 bpa, up from 182.3 bpa last year and 3-year average of 181.3 bpa.
  • Pod counts in both states were down from last year.
  • Pro Farmer will release their massaged national yield estimates after the close today.  Their average corn yield runs about 3 bpa below the USDA’s historically.
  • For option expiration, biggest put OI in corn is 3.50 with nothing significant on the call side until 3.70.  Biggest put OI in beans is at 9.40 and 9.20 with 9.40 the biggest strike on the calls.  Wheat put OI evenly spread out from 4.20 down to 4.00.  Wheat call OI pretty evenly spread out until you get to 4.40.
  • Take home point on option expiration, nothing jumps out too much.
  • Corn in a lower trend technically, but finding some support near 3.55.  Overhead resistance at 3.60.
  • Soybeans technically have been making higher highs and higher lows.  Support at 9.30 and resistance at 9.50.
  • Wheat is in its lower trend with support at 4.00 and resistance at 4.20.
  • USDA reported 132,000 MT of soybeans to China for 2017/18.
  • USDA reported 105,500 MT of meal to Thailand for 2017/18.

 

WEATHER

  • Spotty rains over the next few days before the Midwest dries out through the end of the 15-day period.
  • Temperatures run below normal over the next couple of weeks.

 

OUTLOOK

  • Corn has been grinding lower as the market bleeds out remaining old crop bushels and “the funds” build a new short position at contract lows.  Pro Farmer yields seem to have supported the USDA’s August 169.5 bpa national estimate.  Regardless, the timing for a seasonal low is approaching, and I do not think this is a good time to be putting on overly bearish positions in corn.
  • Soybeans are looking more and more like a low has been put in.  Pro Farmer bean pod counts were not too impressive and the ECB has been pretty dry during the key period for beans.  Soybeans look like they can move higher from here.
  • Wheat put in a bullish key reversal yesterday and the funds have re-established their short position at contract lows.  Look for short-covering to support the wheat.

                                                                                                                                                                                

Fun Fact of the Day: The unicorn is the national animal of Scotland. 

 

Have a great weekend and let me know if any questions.

 

Best,

 

Drew

 

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