2/14/18

Morning Bullet Points - 02/14/2018

GOOD MORNING—

MARKET HIGHLIGHTS

  • Markets trading mostly lower overnight after a pullback from yesterdays highs but firm out of the gates again.
  • CME announced they were raising margins on soymeal, KC and CBOT wheat, which is usually bearish.
  • NOPA crush out Thursday expected to be 165.5 mbu.
  • Equity and treasury markets collapsed this morning after the CPI report showed the US finally hit its inflation target.
  • Corn technically put in a potential double top yesterday with a doji kicker.  The trend is higher, but a pullback possible.
  • Soybeans pushed to the top of their range yesterday, but are still within the range.  Support below the market at 10.00 and resistance 10.20.
  • Wheat is trending higher, but the market had a bearish reversal yesterday, so a test of support possible.
  • USDA announced 123,0000 MT of corn to unknown for 2017/18.

WEATHER

  • Argentina is dry through the weekend when scattered showers hit ¼ of growing areas.  The 11-15 still has potential for rains.
  • Brazil sees scattered showers over the next couple of weeks to help beans finish out, but also delay fieldwork.
  • US wheat areas have chances for rains over the next couple of weeks.

OUTLOOK

  • Corn continues to climb higher on short covering and talk of world stocks drawing down.  The market has had a pretty good run with huge hedge pressure volume on the highs yesterday, so I think there is a good chance we get the pull-back to re-own sales I’ve been looking for.  The longer-term higher, shorter-term, lower.
  • Soybeans have been following meal higher on Argentine dryness.  The CME raised meal margins, which should stop that rally temporarily.  Look for a pullback in the soy complex.
  • Wheat also had margins increase, so a pullback is likely there.  A base still looks like it was built so be ready to buy on a dip.

Fun Fact of the Day:  The youngest person to assume office was Theodore Roosevelt (age 42), who became president following William McKinley's assassination. The youngest president elected to office was John F. Kennedy (age 43 years, 236 days). The oldest president to assume office was Ronald Reagan (age 69 years, 349 days).

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