1/3/18

Morning Bullet Points - 01/03/2018

GOOD MORNING—

MARKET HIGHLIGHTS

  • Markets trading higher overnight with Tuesdays weak link (soybeans) trading firmer overnight.
  • South American weather is still mixed with dryness concerns to re-emerge in Argentina next week.
  • Ukraine grain exports were down 10% from a year ago for the first half of their marketing year.
  • Argentina announced the start of a plan to lower their soybean export tax from 30% down to 18%, with .5% reductions seen over the next 24 months.
  • Cash corn markets trading mostly higher with cash soybeans under some pressure.
  • Census crush yesterday was 5.2 MMT (5.22 expected).
  • Corn open interest climbed by nearly 7,000 contracts to start the year.  New shorts?
  • Corn technically bumped into resistance at its 50 DMA overnight with 20 DMA support at 3.50.  Futures remain range-bound with more room to go higher before becoming overbought.
  • Soybeans technically found support yesterday near 9.60 with resistance at 9.80.
  • Wheat continues to test resistance levels with the 50 DMA next on deck for March.  The market is overbought but on the verge of triggering short-covering.

WEATHER     

  • Brazil continues to catch scattered rains to limit any weather concerns there.
  • Argentina rains are limited through the weekend before chances are seen in the 6-10 and 11-15 periods.  Model confidence is low, however.

OUTLOOK

  • Corn started the year out firm.  With a massive speculative short in the market, I think we could see a move to the upper end of the range ahead of the crop report on January 12th.  If we can get December to 3.90 and March to 3.60, I think those are levels for producers to look to put on downside protection for the January report, which is likely to show large US and world supplies.
  • Soybeans were the weak leg yesterday, but are finding some buyers today.  They probably have the worst fundamentals moving forward unless the Argentine crop burns up.  The forecast has some rains, but the market has already had a large move lower.  Look for prices to stabilize until there is more confidence whether or not the rains are going to hit.
  • Wheat continues to grind higher, and I think there is still plenty of short interest from speculators.  The cold weather is likely hurting the US wheat crop.  I think we could see a bigger wave of short-covering provide another 10-15 cents upside from here.

Fun Fact of the Day:  Although they are still susceptible to death by disease or attacks, lobsters can theoretically live forever because getting older does not raise their chance of dying. An enzyme known as telomerase prevents the DNA in lobsters' cells from being damaged as they are replicated, scientist Simon Watt reports.

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