1/2/18

Morning Bullet Points - 01/02/2018

HAPPY NEW YEAR—

MARKET HIGHLIGHTS

  • No overnight markets due to the new year holiday, we re-open the markets at 8:30 am CST.
  • Early bid/ask for grains are steady across the board.
  • Friday’s CFTC report showed managed funds were net buyers of 7,000 wheat to leave them short 147,000 contracts, net buyers of 15,000 corn contracts to leave them short 207,000, and net sellers of 28,000 soybeans to put them net short 69,000.
  • Cash corn and soybean markets quiet.
  • Corn technically remains stuck in its range with 3.50 acting as a magnet.  Downside gap at 336 is still open with resistance above the market at 3.55 and 3.60.
  • Soybeans technically are oversold with support for March at 9.30 and resistance 9.80.
  • Wheat technically is trading near a cluster of moving averages while it is trying to end the multi-year downtrend.  Support at 4.20 and resistance 4.40.

WEATHER     

  • South America weather holding steady.
  • Brazil continues to catch scattered rains.
  • Argentina saw rains over the last few days, but they are dry over the next 10 days before showers return in the 11-15.
  • Overall, no new major problems.  The rains in the 11-15 for Argentina need to come through, though.
  • Winterkill concerns early this week in the US plains.

OUTLOOK

  • Slow start to the year from a news standpoint as the early theme of 2018 likely to continue to be the large supplies of corn, soybeans, and wheat around the world.
  • There has been some general strength seen in commodities, which could provide some support as “the funds” are already aggressively short corn, soybeans, and wheat.  Fundamentally, though, it is going to take lower production due to weather to significantly impact balance sheets.
  • For now, be prepared to take advantage of any head-scratching moves that “the funds” cause if they start to liquidate positions.
  • Corn near 3.60 basis March looks like a sale, soybeans near 9.80, and wheat near 4.40.

Fun Fact of the Day:  The biggest reason for pouring salt on icy roads is that salt lowers the freezing point of water. Water normally freezes at 32 degrees Fahrenheit, but when you add salt, that threshold drops to 20 degrees (or even 2 degrees) Fahrenheit.

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