12/29/17

Morning Bullet Points - 12/29/2017

HAPPY NEW YEAR—

MARKET HIGHLIGHTS

  • Markets trading mixed overnight ahead of the final trading day of 2017.
  • Export sales for wheat out this morning at 478,400 MT (250-550 expected), corn 1,245,500 MT (600-1,100), new crop corn 102,900 MT (0-50), soybeans 974,700 MT (800-1,500)
  • Good week for corn sales and a bad week for soybean sales.  Soybean product sales were at the upper end of expectations, which could be related to some of the dryness concerns in Argentina.  Wheat sales plugging along at the upper end of expectations.
  • 20 soybeans were delivered against the January contract, which was quite a bit less than expected.
  • BA Grain Exchange put Argentine corn planting at 70% complete vs. 77% last year.  Argentine bean planting was 82% complete vs. 84% average.
  • Cash corn was firm at the gulf yesterday.
  • December 18/December 19 corn spread trading well off the recent lows.
  • Corn technically remains magnetized to the 3.50 strike and range-bound.  Support is at 3.50 and resistance 3.55.
  • Soybeans technically pushed to new lows yesterday with next major support at 9.30.  Resistance above the market at 9.60.
  • Wheat continues to hover near the cluster of moving averages in the mid-4.20’s.  The market is working on a change in trend with support at 4.20 and resistance 4.30.

WEATHER  

  • Rains still expected to hit much of Brazil to keep things in good shape there.
  • Argentina catches rains this weekend, but then is dry during the 6-10.  Rains return in the 11-15.
  • US plains expected to catch some moisture in the 6-10 period.

OUTLOOK

  • Corn pulled back yesterday after having put together a 6-day winning streak.  The 6 consecutive higher closes came after new contract lows and the December 18/19 spread traded higher over that time as well.  There is still a gap below the market to 3.36, which I think will be filled down the road, but in the near-term, I think we could see prices work higher between now and the January (12th) crop report.
  • Soybeans traded to new recent lows yesterday on a better weather outlook in South America and weakness in the Argentine peso.  We need to see US soybean exports pick up.  There is probably another 10-15 cents downside in beans.
  • Wheat is trying to end its long-term down trend.  With “the funds” already loaded to the gills short wheat, I think we can look for buyers to step in on dips.

Fun Fact of the Day:  The New Years Eve Ball is a geodesic sphere, 12 feet in diameter, and weighs 11,875 pounds.  The Ball is covered with a total of 2,688 Waterford Crystal triangles that vary in size, and range in length from 4 ¾ inches to 5 ¾ inches per side.

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