9/25/17

Morning Bullet Points - 09/25/2017

GOOD MORNING—

MARKET HIGHLIGHTS

  • Markets trading lower overnight, giving back part of the gains from Friday.
  • USDA quarterly stocks will be out Friday with large supplies of corn/soybeans/wheat expected.
  • Yield reports continuing to come in better than expected with the USDA’s yields looking more and more accurate.
  • Better chances for rains seen in Brazil as they get ready to plant.
  • Friday’s commitment of traders report showed managed funds as net sellers of 15k corn to push the net short to 134k, buyers of 18 beans to push them to a net long of 13k, and buyers of 4k wheat to drop the net short to 79k.  Nothing too surprising there.
  • Cattle on Feed showed placements at 102.6%, which was 5% above the average guess.
  • Cash grain markets starting to feel some pressure from harvest.
  • Corn technically popped above its 20 DMA on Friday before pulling back.  Resistance at 3.53 and support at 3.50.  The trend is lower until that level can be breached.
  • Beans technically pushed through major resistance on Friday, and are pulling back to test that support this morning.  Support at 9.78 and resistance at 10.00.
  • Wheat technically pulled back to test moving average support overnight.  The trend looks to have turned higher with support at 4.41 and resistance at 4.50.

WEATHER

  • Brazil expected to catch some needed pre-planting rains.
  • US temperatures running well above normal with a dry harvest outlook.

OUTLOOK

  • Corn finally pushed through the 20 DMA resistance on Friday.  The market is doing a good job of ignoring the better than expected yield reports and holding together.  Corn will probably be the weak leg moving forward, but more consolidation near 3.50 seems possible as good buyers are below the market and sellers are above.
  • Beans pushed above a big resistance level in 9.80 on Friday.  We are seeing a pullback to test support in the mid-to-upper 9.70’s.  Yields have been good, but so has demand.  Funds do not have much of a position.  We could really go either way from here.
  • Wheat has slowly been grinding higher, but is not getting that much momentum going to the upside.  Until a bigger production issue shows up in a major exporter, we can probably continue to see the grinding, choppy trade.

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