1/19/18

Morning Bullet Points - 01/19/2017

GOOD MORNING—

 

MARKET HIGHLIGHTS

  • Markets trading mostly higher overnight with beans seeing the best gains.
  • Export sales this morning for wheat were 153.1 tmt (200-500 expected), o/c corn 1,888.3 tmt (500-800), n/c corn 2.4 tmt (0), o/c beans 1,240.2 tmt (600-1,100), n/c beans 287.7 tmt (200-400)
  • BIG corn sales, pretty good bean sales, and disappointing wheat.
  • The best buyer of corn was unknown destinations and best buyer of beans was China.
  • China still reportedly booking corn out of Ukraine.
  • Planting delays in Argentina have been reported with 200-300k acres yet to go in.
  • Corn open interest was down yesterday on the price weakness.
  • Corn technically remains range-bound, but is pushing above the 50 DMA again this morning.  Next resistance at 3.55-3.58 and support at 3.50.
  • Beans technically are at the highest level since mid-December with March approaching stiff resistance at 9.80.  Support is well-below the market near 9.65.
  • Wheat is bumping into its 20 DMA again this morning with resistance at 4.27 and support 4.20.
  • No exports on the daily report today.

 

WEATHER

  • Brazil catches scattered rains in most areas over the next couple of weeks with the exception of northeastern areas (10-15%).
  • Argentina caught rains overnight with more expected the next 10 days.  The extended forecast is where the trouble is with potential for dryness to return.

 

OUTLOOK

  • Corn had a big week for sales, which historically has not always led to the higher reaction one would expect.  It is a step in the right direction, however.  Regardless, the market is range-bound with meaningful changes to the fundamental outlook unlikely for a while.
  • Soybeans are seeing a good bounce off the following the December crash.  Argentina’s crop is probably headed lower, but Brazil looks good (OLD NEWS).  Bean supplies are more than adequate, so I think producers should be willing to sell into the current strength.
  • Wheat had terrible sales.  The market is getting to resistance levels where if we can push higher, I think a low is in place.  If the market fails, at the 20 DMA resistance, we are probably going to resume the long-term lower trend.

 

Fun Fact of the Day: Although Mount Everest is the highest mountain, the tallest is actually Mauna Kea in Hawaii. ‘Highest’ is only a measure from sea level to the summit, while ‘tallest’ is a measurement from the bottom of the ocean floor to the mountain to the top.

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