2/16/18

Morning Bullet Points - 02/16/2018

GOOD MORNING—

 

MARKET HIGHLIGHTS

  • Markets trading mixed overnight but the sox complex is under fire this morning as I type this.
  • Markets closed on Sunday Night/Monday for President’s Day and will re-open Monday night at 7pm CST.
  • The commitment of traders report this afternoon is expected to show aggressive buying in the managed fund category of traders with them expected to hold a net long in beans, small short in wheat, and near flat in corn.
  • USDA released their long-term projections report this morning with no changes to the supply and demand tables they released back in November.
  • Argentine corn/soybean ratings now have 58% of corn and 56% of beans rated poor by the Buenos Aires Grain Exchange.
  • Corn technically is trending higher with big resistance above the market at 3.70 basis March and 4.00 Dec.
  • Soybeans technically are still range-bound with a close above 10.30 needed to signal a breakout.  Resistance 10.30 and support at 10.20, 10,00, and 9.80.
  • Wheat technically is trending higher as well with resistance above the market at 4.70 and support at 4.50.
  • USDA announced 116,000 MT of corn to Japan for 2017/18.
  • USDA announced 28,000 MT of soybean oil to South Korea for 2017/18.

 

WEATHER

  • Argentina still has limited chances for rains to finish the week.
  • Scattered showers seen over the next couple of weeks in Brazil.
  • US winter wheat has chances for rain over the next 10 days.

 

OUTLOOK

  • Corn put in a quiet trade overnight, but we continue to see aggressive buying show up on any dips.  There are a lot of offers resting just above the market.  I think there is a good chance they are filled, but then I think we could have a hard time sustaining the recent strength.  I am still looking for a pullback to buy.
  • Soybeans are testing the top of their range as Argentine production estimates drop further.  Soymeal is trading at new highs this morning, which as long as meal is pushing higher, beans will probably be along for the ride.  Regardless, world bean supplies still are projected to be large, so I think the current strength needs to be viewed as a selling opportunity.  While the market seems strong, if you take a step back and look at the chart, we are still range-bound.
  • Wheat recovered off lows yesterday.  The market has not had much of a pullback following the CME margin hike a couple days ago, so I think it is vulnerable to a bigger pullback.

 

Fun Fact of the Day:  According to a tradition believed to have been derived from the Romans, the wedding ring is worn on the left hand ring finger because there was thought to be a vein in the finger, referred to as the 'Vena Amoris' or the 'Vein of Love' said to be directly connected to the heart.

 

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