11/14/17

Morning Bullet Points - 11/14/2017

GOOD MORNING—

MARKET HIGHLIGHTS

  • Markets trading mixed overnight in another quiet trade.
  • Crop progress yesterday showed corn harvest 83% complete vs. 91% on average.  Soybean harvest is 93% complete vs. 95% average.
  • Winter wheat was rated 54% good-to-excellent, which was down 1%.
  • CFTC showed managed funds as net sellers of 3,000 corn to push the net short to 205,600 contracts, managed funds bought 6,000 soybeans to push the net long to 46,700 contracts, and they sold 15,000 wheat to push the spec. short to 125,000.
  • After recent price moves, managed funds are estimated to be record short corn.  This is the 17th week in a row we have seen managed money sell corn.  When will it stop?
  • Corn open interest continues to climb as funds are entrenched on the short side of the market.
  • Dr. Cordonnier estimated Brazil soybean production at 107 MMT (USDA 108) while some other private estimates are moving higher on bigger planted acres.  He estimated Argentine soybean production at 55 MMT (USDA 57).
  • Tyson food cited low feed costs as a reason for strong earnings.
  • Corn technically is hovering near its recent lows with support at 3.40 and then 3.30.  Resistance is at 3.45.
  • Soybeans technically flushed through support yesterday to mark the end of the uptrend for the moment.  Support is at 9.30 and resistance 9.80.
  • Wheat is stuck in a range as well with support at 4.20 and resistance 4.30.
  • USDA reported 133,000 MT of corn to “unknown” for the 2017/18 marketing year.

WEATHER

  • Brazil caught rains in the past day.  More rain is coming over the next couple of weeks to limit dryness concerns.
  • Argentina is expected to see some spotty rains in southern areas to slow planting but overall is open.
  • Overall, no major concerns to get the trade excited.

OUTLOOK

  • Corn is hanging out at the bottom of the range, which I think suggests more weakness in the near-term with the potential to drop down to 3.30.  Supplies are big and carries are big.  Farmer selling is minimal as we own less than last year at this point.
  • Soybeans pushed through support yesterday with room to work lower in the near-term unless some production issues arise in South America. 
  • Wheat continues to be a follower with no reason to trade significantly higher or lower for now.

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