9/13/17

Morning Bullet Points - 09/13/2017

MARKET HIGHLIGHTS

  • Markets trading higher overnight with wheat seeing the best strength.
  • USDA surprised everyone yesterday with their big corn/bean yields.

 

 

2017/18 US Production

Actual

Average

Range

Last Month

Corn Production

14.184

14.035

13.878-14.249

14.153

Corn Yield

169.9

168.2

166.7-170.9

169.5

Corn Acres

83.5

83.428

83.1-83.5

83.496

Bean Production

4.431

4.328

4.179-4.417

4.381

Bean Yield

49.9

48.8

47.1-49.8

49.4

Bean Acres

88.7

88.75

88.2-89.48

88.731

 

 

 

2016/17 US Ending Stocks

Actual

Average

Range

Last Month

 

Corn Stocks

2350

2.340

1.964-2.380

2.370

 

Soybean Stocks

345

370

331-477

370

 

 

 

 

 

 

 

 

2016/17 World Stocks

Actual

Average

Range

Last Month

 

Corn Stocks

226.96

227.99

225.1-229.1

228.61

 

Soybean Stocks

95.96

96.8

95.5-98

96.98

 

Wheat Stocks

258.83

258.57

25705-259

258.56

 

 

 

 

 

 

 

 

 

2017/18 US Ending Stocks

Actual

Average

Range

Last Month

 

Corn Stocks

2335

2.180

1.898-2.420

2.273

 

Soybean Stocks

475

442

375-524

475

 

Wheat Stocks

933

920

875-943

933

 

 

 

     

 

 

2017/18 World Stocks

Actual

Average

Range

Last Month

 

Corn Stocks

202.47

200.74

189.4-223

200.87

 

Soybean Stocks

97.53

97.39

95.2-99.5

97.8

 

Wheat Stocks

263.14

264.3

258-268

264.69

 

 

  • Stocks to usage levels are a little more bearish for corn than a year ago when Dec. futures made a low near 3.15.
  • Bean stocks to usage is more bearish than how the 2016/17 to
  • There will continue to be much debate over yields with earliest yields lacking of any major issues.
  • FSA acres out yesterday afternoon would suggest the USDA currently is 0-500k too low on corn acres and around 1m acres too low on beans.
  • China announced yesterday afternoon that they would like to expand their ethanol program nationwide by 2020 to reduce pollution and clear out corn supplies.  It is a ways away, but a potential new source for corn demand, which has been good but relatively stagnant lately.
  • Corn continues to track similarly to 2005 when there was a bounce off the lows following the Sep. crop report before resuming the lower trend.
  • Corn technically remains in a lower trend, but there is potential for a double bottom if yesterday is low holds.  Resistance is at 3.57 and support at 3.50.
  • Beans bounced off moving average support yesterday in the mid-9.40’s.  Overnight resistance was seen at 9.60.  The market is mid-range with a lack of a trend.
  • Wheat put in a bullish outside up day following the USDA.  Resistance is at 4.60 and support 4.15.
  • USDA reported 167,370 MT of soybeans to Mexico for 2017/18.

WEATHER

  • Rains seen moving across the N. Midwest the next couple of days.  The 6-10 has spotty showers, but then a more widespread event is seen during the 11-15 period.
  • Temperatures are expected to run above average for much of the next two weeks.
  • Overall, nothing too significant.

OUTLOOK

  • Bearish corn/soybean numbers from the USDA have not had that much of a negative impact on corn/beans yet.
  • The corn S&D is similar to a year ago, which makes me skeptical that we have seen our lows, so for now I think the path of least resistance is lower.  The China ethanol story could be big a few years out, but is not going to clear out any significant supplies in the near term.
  • Soybeans had a bearish report yesterday and a bearish FSA acre report.  The market has been able to bounce, but there is a bearish seasonal that kicks in during the second half of September as well.  For all of those reasons, I think there is downside risk from here.
  • Wheat had a strong bullish reversal yesterday for the third time since mid-August.  If corn/beans can stabilize, wheat may be able to attract some buyers following the bullish technical signals.

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