1/5/18

Morning Bullet Points - 01/05/2017

HAPPY FRIDAY—

 

MARKET HIGHLIGHTS

  • Markets trading mixed this morning after poor export sales.
  • Export sales this morning for wheat were 131,000 MT (225-500 expected), corn 101,200 MT (600-900), soybeans 554,000 MT (600-900).
  • Terrible corn sales with everything else below the bottom of expectations.
  • Corn technically remains within its range.  Following a test of resistance at the 50 DMA, the market is now testing support at the 20 DMA.  The gap at 3.36 below the market is open still.
  • Soybeans found support at 9.60 yesterday and made a push above the 20 DMA overnight before pulling back.  Soymeal put in a bullish outside up bar yesterday.  The near-term trend is lower, but a close above 9.74 might signal an end of that.
  • Wheat is struggling to push through moving average resistance at 4.34.  Support below the market is at 4.23.

 

WEATHER    

  • Brazil still expected to catch scattered rains.
  • Argentina has chances for showers in the 6-10 and 11-15.
  • Overall, Argentina is running behind on moisture, but there are chances to narrow that gap.

 

OUTLOOK

  • Corn remains stuck in its range.  I think it is possible to see investor interest in the long side of the corn market, but the large supplies will offset some of that.  With the failure to push through the 50 DMA earlier in the week, we will now find out if the 20 DMA holds.  If it does not, I still think there is potential to push March corn down to 3.35-3.40.  If prices do drop that low, I will have zero interest in the short side of the market and think it will be time to be an aggressive buyer.
  • Soybeans had a strong rally off their lows yesterday and good follow-through overnight.  Fundamentally, we’ve got concerns over the Argentine crop, but not much other than that.  With the poor interest, we continue to see in US soybeans on the export market, I think rallies need to be viewed as selling opportunities.
  • Wheat had a decent run to the upside, but probably needs to pullback to catch its breath.  Look for buyers to stop in on a drop to the mid-4.20’s.

 

Fun Fact of the Day:  Why do people say “knock on wood” - One explanation states that the tradition derived from the Pagans who thought that trees were the homes of fairies, spirits, dryads and many other mystical creatures. In these instances, people might knock or touch wood to request good luck, or to distract spirits with evil intentions.

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