1/29/18

Morning Bullet Points - 01/29/2018

GOOD MORNING—

 

MARKET HIGHLIGHTS

  • Markets trading higher overnight with soybeans seeing the best gains.
  • Argentina is dry for the next couple of weeks.
  • Managed funds were net buyers of 7,200 corn to reduce the net short to 219,600 contracts, net buyers of 22,000 soybeans to reduce the short to 81,500, and net sellers of 3,000 wheat to push the net short out to 145,400 contracts.
  • Buenos Aires Grain Exchange reported Argentina crop progress has bean planting at 99% complete and corn planting 92%.
  • US Dollar futures are trading higher this morning after trading to multi-year lows Friday.
  • Corn technically is trying to push out of the top of the range that we had seen since August with next overhead resistance at 3.70 for March.  Still range-bound, though.
  • Soybeans technically are approaching the highs from last week with the market overbought after the recent gains.  Still-range-bound, though.
  • Wheat is trading at the highest levels since October with March Chicago pushing through the 100 DMA overnight.  Resistance at 4.60 and support 4.40.
  • USDA reported 115,000 MT of corn to Egypt for 2017/18.

 

WEATHER           

  • Rains hit parts of Argentina over the weekend, but the outlook for the first couple of weeks in February is dry.
  • Brazil continues to catch rains with harvest slow in Parana while showers in the 6-10 to slow harvest in center west areas.

 

OUTLOOK

  • We continue to see US Dollar weakness cause funds to cover shorts, and push the general markets higher.
  • Looking specifically at corn, production estimates in South America are working lower and “the funds” are still short a near record amount.  Farmer movement of corn is taking place on the rally, but it has been orderly.  If the market can close here or above today, I think we will have widened the trading range with upside potential to 3.70 before the next major resistance comes in.
  • Soybeans have seen some weather premium pumped into the market, but the fundamentals moving forward are questionable with world supplies likely to grow in spite of lower Argentine production.
  • Wheat has ended its multi-year bear market.  Look for buyers to step in on pullbacks.

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