12/13/17

Morning Bullet Points - 12/13/2017

GOOD MORNING—

MARKET HIGHLIGHTS

  • Markets trading with small gains following yesterdays weak post-report settlement.
  • USDA yesterday kept South America production steady while providing somewhat expected adjustments to US corn ethanol and soy exports.
  • South American weather remains mixed, but Argentina has better chances in the 6-10 period.
  • Iraq tendered for 50,000 MT of wheat.
  • Representatives from the ethanol and oil industries are expected to meet at the White House today with refiners looking to lower the biofuel requirement.  Ethanol producers do not want any changes.
  • Corn technically pushed to new contract lows yesterday with futures needing to recover above 3.50 basis March or the next leg lower is likely underway.  Support at 3.45 and resistance at 3.50.
  • Soybeans technically dropped below channel support yesterday, but has recovered above it this morning.  A steady or lower close today probably means there is more downside.
  • Wheat technically is weak with the market seeking out support levels.  Support at 4.00 and resistance 4.20.

WEATHER             

  • Showers tail off in Brazil the next few days, but chances return in the 6-10 and 11-15 periods to keep things in good shape.
  • Argentina has hot temperatures moving in the next few days.  There are better chances for rains in the 6-10, but the 11-15 is back to drier.

OUTLOOK

  • No major changes were seen in the report yesterday.  Corn bounced following the number, but then sold off late in the session to a new low close.  I do not think there is a huge amount of downside risk in corn, and this is typically a time of the year when we see some seasonal strength.  I think we can bounce from here, but a 15-cent move off the recent lows is about all we can look for.
  • Soybeans have had a good pull back from the recent highs.  Brazil is in good shape, and we do not really know on Argentina just yet.  With some strength showing up in the cash soybean market, I think we could at least see beans stabilize near current levels for a few days.
  • Wheat has closed lower 7 days in a row.  Supplies are bearish.  Look for a bounce by the end of the week.

 

Fun Fact of the Day: The $1,000 bill featured Grover Cleveland on the obverse and the words "One Thousand Dollars" on the reverse. It was printed as a small-size Federal Reserve Note in 1918, 1934 and 1934A, and a small-size Gold Certificate in 1928 and 1934.

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