12/1/17

Morning Bullet Points - 12/01/2017

GOOD MORNING—

MARKET HIGHLIGHTS

  • Markets trading mixed overnight with soybeans recovering part of yesterdays loss.
  • Argentina is still pretty dry after chances for showers this weekend.
  • The CFTC has approved trading in bitcoin with the CME contract expected to start trading on Dec. 18th.
  • Mixed thoughts on the results of China’s policy to reduce their corn supplies as they have ramped up corn imports over the last few weeks.
  • CFTC report this morning expected to show large net short positions in corn and wheat while soybeans are likely a small net long.
  • 1,286 corn was delivered overnight, 556 KC wheat, and 1,520 Chicago wheat.
  • Corn technically bumped into moving average resistance on the highs yesterday but is trading just above this morning.  March support at 3.50 and resistance at 3.60.
  • Soybeans technically trading down to their 50 DMA yesterday and bounced overnight.  Support at 9.86, 9.80, and then 9.30.  Resistance at 9.90 and 10.00.
  • Wheat sold off yesterday and is back at the bottom of the range.  Support at 4.30 and resistance 4.40.
  • USDA reported 130,000 MT of corn sold to “unknown” for 2017/18.

WEATHER         

  • Brazil expected to continue to get plenty of rain over the next couple of weeks.
  • Argentina has chances for rain this weekend but then is dry for the next couple of weeks.

OUTLOOK

  • A new month with corn, soybeans, and wheat all within their recent ranges.
  • Corn is likely to have its upside limited by large supplies and hedge pressure, while strong demand supports prices on pullbacks.  Cash markets (basis) continue to firm as producers continue to hold a majority of the market ownership.
  • Soybeans have been supported by dryness concerns in Argentina.  They could probably add more risk premium if forecasts stay dry, or I believe there are 50 to 60 cents downside if rains improve.
  • Wheat is similar to corn with large supplies limiting upside.

Fun Fact of the Day:  A nanosecond (ns) is an SI unit of time equal to one billionth of a second (10−9 or 1/1,000,000,000 s). One nanosecond is to one second as one second is to 31.71 years.

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