1/26/18

Morning Bullet Points - 01/26/2018

GOOD MORNING—

MARKET HIGHLIGHTS

  • Markets trading mixed overnight with corn/wheat higher while soybeans trade lower
  • Export sales were out this morning due to the govt. shutdown with wheat sales 427,200 MT (200-500 expected), old crop corn 1,445,900 MT (900-1,250), new crop corn 85,100 MT (0), old crop soybeans 616,300 MT (850-1,200), new crop soybeans 143,100 MT (0-200)
  • Another big corn number could start to change some attitudes over US corn exports.  Another weak soybean number will do little to change concerns that US export estimates may be too high.
  • You need to feed the bull
  • Comments yesterday afternoon from Trump put the brakes on a drop in the US Dollar Index, but it is trading lower again this morning to limit the impact.
  • Brazilian Real strength of late has limited the impact of the recent rally in soybeans for Brazilian growers.
  • Corn technically looking like a base may have been built, but the 100 DMA looks above the market at 3.57.  We are still range-bound, but the range is expanded from 3.45-3.55 to 3.45-3.70.  Support at 3.50 and resistance 3.57.
  • Soybeans technically pushed above resistance at 10.00 yesterday before pulling back.  Support at 9.80 and resistance 10.00.
  • Wheat technically is similar to corn with a base possibly built.  Support at 4.20 and resistance 4.40.
  • USDA reported 125,000 MT of corn to “unknown” for 2017/18.

WEATHER 

  • Chances for rains this weekend in Northern Argentina then the outlook is dry into February.  Hotter temperatures are also seen with ½ of corn/soybean areas expected to be hurt.
  • Brazil continues to catch rains over the next two weeks.  Harvest is slow to get started in Brazil due to excess rains, which will also delay planting of second crop corn.

OUTLOOK

  • Corn, soybeans, and wheat all traded to new recent highs yesterday before pulling back.
  • Corn has handled a lot of hedge pressure pretty well with fund buying offsetting that selling for the most part.  With improving exports, I think there is potential for the market to move to the upper end of the range near 3.70 March.  Look for buyers to step in on pullbacks.
  • Soybeans pushed above 10.00 and then pulled back from the highs.  Exports are not improving like corn, and are actually getting worse.  After rallying 8 days in a row, I think there is potential to see a pullback to the 9.80 area for options expiration today.
  • Wheat looks to have put in a low with pullbacks likely to find buyers.

Fun Fact of the Day:  Mount Everest is called the world's highest mountain because it has the highest elevation above sea level. We could also say that it has the "highest altitude". The peak of Mount Everest is 8,850 meters (29,035 feet) above sea level.

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