11/1/17

Morning Bullet Points - 11/01/2017

GOOD MORNING—

 

MARKET HIGHLIGHTS

  • Markets are up overnight across the board, with corn erasing losses from yesterday.
  • Crop progress Monday showed corn harvest at 54% complete (53% expected) and soybean harvest 83% (83% expected).  Nothing too significant there with corn progress to make big increases on next week’s number.
  • Winter wheat was rated 52% good-to-excellent, which was less than expected.  Time for the annual reminder that there is zero correlation between wheat yields and crop ratings going into dormancy.
  • Harvest reports continue to show good corn yields and relatively worse soybean yields in regards to late planted grains.
  • Near-term US corn exports remain in the low to mid-20 mbu per week range
  • South American weather still looks to improve with Brazil rains expected to materialize this week.
  • Corn technically remains stuck in its range with support at 3.45 and overhead resistance at 3.50 and 3.55.
  • Soybeans technically are testing the bottom of the up-trending channel that they have been in since August.  A breach of that support could open the door for weakness to the next major support level near 9.30.
  • Wheat losses passed through $4.20 yesterday but are recovering a bit this morning. Support at $4.16.

 

WEATHER

  • Brazil rains expected to materialize in the next few days to ease most of the moisture concerns.
  • Argentina weather is mostly benign, slightly wetter than normal.
  • Rains expected in the southeast corn belt over the next 10 days, not much elsewhere.
  • Overall, as long as moisture concerns do not develop in Brazil, the market will probably be content.

 

OUTLOOK

  • Not much has changed in the corn market since yesterday. We still remain in a narrow trading channel with little news to make or break prices. Soybeans remain the wildcard and possible catalyst for any movement.
  • The recent soybeans trend seems to be weakening, which could pull corn down with it. Going forward, watch for weather scares in South America which are typically likely. Risk premium is likely to come back in, but as for now, we could see a break in the recent positive trend.
  • Wheat is a quiet but look at new crop wheat-spreads if you feel compelled to buy something.

 

Fun Fact of the Day: Roughly 80% of millionaires in the US are first-generation millionaires, meaning they created their wealth instead of inheriting it from a previous generation.

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