11/6/17

Morning Bullet Points - 11/06/2017

GOOD MORNING—

 

MARKET HIGHLIGHTS

  • Markets trading with small gains overnight in a quiet trade.
  • CFTC report on Friday showed managed funds as across the board sellers with the corn short bigger than expected.  They sold 28,300 corn contracts to push the net short to 203,000, sold 9,000 soybeans to reduce the net long to 40,600, and sold 27,000 wheat to push the net short to 110,000 contracts.
  • The USDA will release their November crop report on Thursday.  I will send out pre-report estimates today or tomorrow.
  • Crop progress this afternoon expected to show soybean harvest near 90% complete and corn harvest near 65-70% complete.
  • South American weather still looking good with dry spots in Brazil catching rains while planting should pick up in Argentina.
  • Corn technically hanging out near 3.50 with support at 3.45 and resistance 3.55.  Sideways trend.
  • Soybeans technically pulled back to finish last week with support near 9.80 supporting while resistance is seen near 10.00.
  • Wheat technically remain range-bound with moving average resistance at 4.30 and support at 4.20.
  • USDA reported 130,000 MT of corn to unknown for 2017/18.

 

WEATHER  

  • Brazil seen catching rains over the next 10 days to limit any dry pockets.
  • Drying out in Argentina should allow their planting to pick up.

 

OUTLOOK

  • Corn continues to hover near the 3.50 level.  Look for a bounce from harvest lows to happen as funds are overweight shorts in the market and those positions will need to be exited or rolled between now and the end of the month.  Producer selling likely slows the velocity of any moves higher, however.
  • Soybeans continue to trade high relative to corn and wheat, but weakness in the cash market makes me think a correction in the inter-market spreads is very possible.  Longer term, soybeans have the best potential on any South America problems, but those problems don’t exist right now. 
  • Wheat remains stuck in its range with no fundamental reason to push out of that range.

 

Fun Fact of the Day:  The Mercedes-Benz logo is one of those meaningful ones. In 1926, Emil Jellinek, Gottlieb Daimler, and Carl Benz founded what would become one of the world's foremost luxury car companies. The logo is a three-pronged star meant to symbolize universal motorization. The three prongs stand for land, water and air.

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