9/15/17

Morning Bullet Points - 09/15/2017

HAPPY FRIDAY—

MARKET HIGHLIGHTS

  • Markets trading mostly lower overnight in a quiet trade.
  • Yield reports slow to come in, but nothing too surprising either way with soybean yield hinting the USDA could be a tad high while corn yields probably confirming the USDA’s forecast.
  • NOAA reported La Nina chances increasing yesterday, which could provide some dryness in South American growing areas.
  • NOPA crush out this morning expected to show 137.5 mbu crushed in August.
  • China a noted buyer in the soybean market as they see value in current prices.
  • Corn technically still in a downtrend with support for Dec. at 3.45 and resistance 3.55.
  • Soybeans technically remain range-bound with major resistance just above the market at 9.80.  Support near 9.70 and 9.55.
  • Wheat technically in its longer-term downtrend with spikes higher hitting resistance the last two days.  Resistance at 4.55 and support 4.15.
  • USDA reported 2 cargoes of soybeans to China for 2017/18.

WEATHER

  • Rains still seen moving across the N. US the next few days before a system moves into the WCB in the 6-10.
  • Temperatures expected to run below normal for the next two weeks, which should help crops speed up to maturity.

OUTLOOK

  • Corn is sitting at the price level we were trading going into the USDA report, which is surprising considering the production numbers they released.  There is plenty of corn demand, but the big carries in the market make me think there is more downside from here.  September futures expired yesterday at 3.41 ¾, so I think the odds suggest a move in December futures to that level at some point relatively soon.
  • Soybeans have had a good run in spite of the big yield from the USDA.  The market is clearly skeptical with plenty of places dry as the crop finished out.  However, the market is at resistance, there are big carries in the market, and it seems like some bullish news is showing up, which often happens after a move has run its course.  September expired yesterday at 9.67 ¼, so a drop in Nov. to that price would make some sense.
  • Wheat has tried to rally the last two days only to finish near unchanged.  The inability of the market to hold those gains makes me think a pullback is possible.  September expired at 4.28 ¼, so a pullback to that level is possible.

 

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