9/5/17

Morning Bullet Points - 09/05/2017

GOOD MORNING—

MARKET HIGHLIGHTS

  • Markets trading higher overnight led by strength in the soybeans/wheat.
  • Friday’s CFTC report showed managed funds as net sellers of 47,000 corn to push the net short to 64,900, net sellers of 5,000 soybeans to push the net short to 28,000, and net sellers of 11,000 wheat to push the net short to 77,500.  The selling in corn and wheat was greater than expected.
  • Crop ratings expected to drop modestly today, but they do not matter.
  • Private crop estimates continuing to work higher to align with the USDA’s numbers.
  • Market feels like it may be waiting for more harvest data.  Early yields in the south have been impressive.
  • USDA September report will be out a week from today at 11am CST.
  • Corn technically put in a big reversal last week, and has been able to hold onto most of the gains.  Dec. has support at 3.55 and overhead resistance near 3.70.
  • Soybeans technically are hitting moving average resistance near 9.60.  Support at 9.30 and next resistance above here at 9.80.
  • Wheat continuing to find buyers on pull-backs.  There is support at 4.40 and resistance 4.60.
  • USDA reported 136,000 MT of soybeans to China for 2017/18.
  • USDA reported 143,600 MT of corn to Mexico for 2017/18.

WEATHER

  • Most of the Midwest remains dry for the next two weeks.
  • Cool temperatures are seen this week, although no major frost threats.  More normal temperatures return in the 6-10 and 11-15 periods.

OUTLOOK

  • Corn looks to have put in a low last week with the nearby contract stopping its drop at major long-term support at 3.30.  There is not a lot of resistance for another 10-15 cents higher, so I think pullbacks will be small and buyers may be forced to chase it higher until Dec. gets to 3.70.  Fundamentally, not much is likely to change until we see the USDA report a week from today.
  • Soybeans are working higher on a cool and dry finish to the crop.  There is not much resistance until Nov. gets to 9.80, and it’s not like we are anywhere close to prices in soybeans where end-users are likely to step back on usage.  With the funds short, any hint of a drop in national yield will keep a firm bid under the market.
  • Wheat also looks to have put in a low.  The market is overbought after the recent gains, so be careful chasing higher at this point.  However, I do not think this is a good time to be selling wheat with issues in Australia’s eastern belt.

 

Fun Fact of the Day: Greenland Ranch, California, with 134°F on July 10, 1913, holds the record for the highest temperature ever officially recorded in the United States. This station is located in barren Death Valley which is about 140 mi long and 4–16 mi wide and runs north and south in southeastern California and southwestern Nevada.

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