11/9/17

Morning Bullet Points - 11/09/2017

GOOD MORNING—

 

MARKET HIGHLIGHTS

  • Markets trading mixed ahead of this morning’s crop report with relatively large overnight volume.
  • Export sales this morning for wheat 781,700 MT (350-550 expected), old crop corn 2,364,500 MT (1,200-1,600), new crop corn 574,200 MT (500-700), old crop soybeans 1,160,600 MT (1,300-1,800), new crop soybeans 4000 MT (0-50).
  • Soybeans saw some selling pressure after the number with the big corn sales probably catching the most attention.  Mexico, South Korea, and Japan were the biggest buyers of corn while China was the best buyer of beans.
  • The US and China signed an agreement for them to purchase 12 MMT of soybeans this marketing year from the US.
  • The report will be out at 11:00am CST.

 

2017/18 US Production

Actual

Average

Range

Last Month

Corn Production

 

14.333

14.25-14.459

14.280

Corn Yield

 

172.4

171.7-174

171.8

Corn Acres

 

83.1

83-83.2

83.119

Bean Production

 

4.408

4.375-4.467

4.431

Bean Yield

 

49.3

48.9-49.9

49.5

Bean Acres

 

89.486

89.4-89.5

89.471

 

 

2017/18 US Ending Stocks

Actual

Average

Range

Last Month

 

Corn Stocks

 

2.366

2.286-2.438

2.340

 

Soybean Stocks

 

420

377-461

430

 

Wheat Stocks

 

957

940-980

960

 

 

       

 

 

2017/18 World Stocks

Actual

Average

Range

Last Month

 

Corn Stocks

 

201.18

197.6-203.5

200.96

 

Soybean Stocks

 

95.5

93-97

96.05

 

Wheat Stocks

 

266.78

261-269

268.13

 

 

  • Most focus will be on the production numbers.
  • US soybean exports to China have been a little slower as of late as the approval process is taking some time.
  • Corn technically remains range-bound with 3.50 a magnet.  3.45 support and 3.55 resistance.
  • Soybeans technically are finding support at the bottom of the trading channel with resistance above at 10.00.
  • Wheat technically is range-bound with support at 4.20 and resistance at 4.30.

 

WEATHER

  • Brazil still seen catching needed rains over the next couple weeks.
  • Argentina will catch up on planting over the next couple weeks.

 

OUTLOOK

  • It’s finally report day with traders hoping to get some news to push corn out of the range that it seems like we have been stuck in forever.  I don’t know what the USDA could come out with today that would leave to a sharply lower trade as farmers have shown unwillingness to sell lower, and “the funds” are already loaded up with a near-record spec. short position.  Seasonally, the market should see some strength from here.  Look for a higher trade from here, but there is a lot of farmer owned corn that will likely move if futures rally.  I think prices can go higher, but do not think a major rally is likely.
  • Soybeans have the most potential to move with a bearish report likely pushing the market 40-60 lower and a bullish report with the potential to push futures 40 cents higher from here.
  • Wheat continues to be a follower.

 

Fun Fact of the Day:  Bones, stop growing after puberty and muscle and fat cells stop dividing. However, cartilage continues to grow until the day you die. Not only does cartilage grow, but the earlobes elongate from gravity. And that makes ears look even larger.

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