9/1/17

Morning Bullet Points - 09/01/2017

HAPPY FRIDAY 

MARKET HIGHLIGHTS

  • Markets trading higher overnight on follow through from yesterday’s gains.
  • Beginning of a new month, so assumed new money flow?
  • Monthly jobs report showed higher unemployment than expected and a worse jobs number than expected.  Equity futures are trading near all-time highs after the number with treasuries under pressure.
  • CFTC will be out this afternoon.  I look for managed funds to have sold much more corn than “the trade” is expecting.
  • Corn technically put in a key reversal on the charts yesterday with plenty of room to bounce more before reaching overbought conditions.  Support for Dec. at 3.55 and resistance 3.65.
  • Soybeans followed corn higher yesterday, taking out moving average resistance and closing above.  Support for Nov. at 9.30 and resistance 9.60.
  • Wheat technically looks to have put in a low with support in the Dec. at 4.10 and resistance 4.55.

WEATHER

  • Heavy hurricane rains finish up in the south the next couple of days while everywhere else in the Midwest is dry with below normal temperatures.
  • The dryness would normally be welcomed as crops typically start to dry down.  The cool temperatures will slow maturity, so I do not know if anyone really has that good of a handle on what this weather means for crops.

OUTLOOK

  • Corn looks to have put in a low yesterday.  Many traders seem to be questioning the strength rather than remembering where everyone thought production was going into the last USDA report.  I do not think the market is going to be kind to the large managed fund short that was recently established near contract lows at a time when seasonal lows have been made the last few years.  Close your eyes and buy as I think there is another 15 cents upside in the short-term.
  • Soybeans were the first to put in what looks like a bottom in mid-August.  Now that it looks like corn and wheat can go higher, beans can likely start to work higher as well.  There are plenty of question marks regarding the size of the bean crop.
  • Wheat put in a bullish reversal earlier in the week and is working higher.  There is plenty of room to the upside before the market is overbought.  Look for buyers to step in on pullbacks.

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