2/6/18

Morning Bullet Points - 02/06/2018

GOOD MORNING—

MARKET HIGHLIGHTS

  • Markets trading mixed to higher this morning (commodities), I cannot say the same thing for equities down another 2% again out of the gates here at 8:30am CST.
  • South American weather still has chances for rains in Argentina later in the week.
  • USDA report is out Thursday at 11am CST.
  • Corn technically remains in the up-channel with futures finding support at the 200 DMA overnight.
  • Soybeans dipped below their 20 DMA yesterday, which suggests a deeper drop with support at 9.50 and 9.30.
  • Wheat technically pulled back to the 100 DMA, but a bottom looks to be in place.
  • USDA reported 120,000 MT of corn to Japan for 2017/18.
  • USDA reported 105,000 MT of corn to unknown for 2017/18.

WEATHER        

  • Argentina still has chances for rains at the end of the week, which is going to coincide with cooler temperatures.
  • Argentina returns drier after that rain chance.
  • Brazil is seeing less rain to allow fieldwork to pick up again.

OUTLOOK

  • Corn pulled back to start the week.  The up-channel that started in December is still intact, but a further pullback ahead of the report on Thursday seems possible.  Longer term, corn seems to have some good buying interest under it, but farmer grain will move on rallies to slow the market down.
  • Soybeans have had a big pullback, which they also pulled back going into the Jan. crop report.  There is unlikely to be anything overly bullish on Thursday, but remember how things turned out last time beans sold off hard going into a report.  If we take another 10-15 cents out of beans, I do not think the risk/reward of being short is good.
  • Wheat has corrected after the moon shot last week.  Look for buyers to start dipping their toe in again.

Fun Fact of the Day:  The Leaning Tower of Pisa took 344 years to build, beginning in August 1173. It began to lean in 1178 once construction on the second floor had begun. The lean was due to one side sinking into the soft ground.

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