2/13/18

Morning Bullet Points - 02/13/2018

GOOD MORNING—

MARKET HIGHLIGHTS

  • Markets trading mixed overnight in a quiet trade.
  • Private estimates out of South America have Brazil bean production offsetting losses in Argentina.  There is debate over Brazil corn production where some privates are running considerably below the USDA.
  • France farm ministry revised their 2017 corn crop higher by .6 MMT, and lowered wheat production by .4 MMT.
  • Corn technically continues to trend higher with upside objectives for March at 3.70 and Dec. 4.00.  Support below the market near 3.59 basis March and 3.90 Dec.
  • Soybeans technically have returned to the top of their recent consolidation range just above 10.00 basis March.  We are range-bound for now, but seeming like a breakout is possible.
  • Wheat continues to trend higher with the market trading to a recent high yesterday.  Resistance at 4.70 and support 4.45.

WEATHER        

  • Argentina is dry through the middle of next week when temperatures drop and rains is supposed to fall.
  • Brazil continues to catch scattered rains to slow bean harvest.  Rains are expected to linger for the next couple of weeks, but widespread delays in the field are not expected.
  • The southern US plains have chances for rains over the next couple of weeks, but KS looks to be short-changed.

OUTLOOK

  • Corn settled at a new recent high yesterday as fund buying continues to push higher into farmer selling.  World stocks are headed lower this year, which likely keeps somewhat of a bid under the market, but the US balance sheets remain in a position to meet production shortfalls in South American growing areas.  Continue to sell into rallies with the intention of buying those sales back on a pullback.  At some point, the farmer selling is likely to overwhelm fund buying.
  • Soybeans surged back to the top of their trading range yesterday.  Fundamentally, world supplies look to be more than adequate, so I still think producers should be on the defensive and willing to sell the strength. 
  • Wheat continues to look very good from a technical standpoint with buyers stepping in on dips.  Look for pullbacks to be supported until the managed fund short has been exited.  If Chicago wheat starts to gain on KC due to fund short covering, use the move to establish long hard wheat/short-soft wheat spreads.

Fun Fact of the Day:  You have to go back to ancient times when horses were used as war mounts. Soldiers carry their swords on the left side (to reach with their right hand) and so they could only mount from the left or they would sit on their sword.

Want Updates?

Keep up with our market interpretation news and other important info. To receive text or email updates, simply click the button below and fill out the form.

Get Updates