12/4/17

Morning Bullet Points - 12/04/2017

GOOD MORNING—

MARKET HIGHLIGHTS

  • Markets trading higher overnight led by Argentine weather concerns but has since drifted lower on the morning open.
  • Weekend rains in Argentina disappointed and the outlook is dry.
  • Friday’s CFTC report showed managed funds as net buyers of 14,000 contracts of corn to reduce the net short to 196,000, net buyers of 11,000 soybeans to push the net long to 11,000, and net sellers of 14,000 wheat to push the net short out to 122,000.
  • Mixed ideas on South American soybean production with some thinking Argentina needs to start to be revised lower while Brazil needs to be revised higher.  It is extremely early in the growing season.
  • Australian wheat production is now seen around 20.3 MMT (USDA 21.5 currently).
  • Cash corn markets eased late last week as the recent bump in futures is shaking loose cash grain.
  • Corn technically pushed through its 20 DMA Friday with next resistance seen near 3.62 basis March.  Support in the mid-3.50’s.
  • Soybeans technically are bumping into resistance above 10.00 again, which is the third time we’ve been in this area since mid-October.  Support at 10.00 and 9.80.  Resistance at 10.20 and 10.30.
  • Wheat working back toward the middle of its range with resistance at 4.45 and support 4.30.

WEATHER

  • Brazil continues to catch rains with more seen over the next couple of weeks.
  • Weekend showers in Argentina were less than expected, and the next 10 days remain dry.
  • East Australian wheat areas that are ready to be harvested were hit by heavy rains.

OUTLOOK

  • We are catching a bump this morning as Argentine weather concerns are sparking some buying in the soybeans.
  • Corn story is the same, which there is plenty, but the large fund short in the market is providing a short-covering bounce.  As futures rally, hedge pressure will likely pick up.
  • Soybeans are having an easier time rallying as producers have already sold the majority of them, so hedge pressure is not as much of a feature.  Additionally, that is where the potential for South America to have an impact on world S&D is. 
  • Wheat is working back to the middle of its recent range.  The lower Australian crop should help to support hard wheat.  Wheat supplies globally are still large.

Fun Fact of the Day:  Based on landmass, Vatican City is the smallest country in the world, measuring just 0.2 square miles, almost 120 times smaller than the island of Manhattan.

Want Updates?

Keep up with our market interpretation news and other important info. To receive text or email updates, simply click the button below and fill out the form.

Get Updates