3/8/18

Morning Bullet Points - 03/08/2018

GOOD MORNING—

MARKET HIGHLIGHTS

  • Markets trading mixed this morning with everything off the overnight lows following the export sales report.
  • Export sales this morning for wheat were 391,500 MT (200-500 expected), corn 1,867,000 MT (1-1.5), soybeans 2.5 MMT (900-1.4).
  • Another week of big corn sales, which is getting to be routine.  Soybean sales the surprise, coming in well above the top end of estimates.  China was the big buyer in soybeans, accounting for over 1.2mmt.
  • CONAB put Brazil bean production at 113.02 MMT (111.5 last month), and corn production at 87.28 MMT (88 last month).  The soybean figure would be supportive if realized.
  • South Korea bought 120,000 MT of optional origin corn.
  • USDA will be out at 11am CST with updated balance sheets.
  • Corn technically continues to trend higher although started to correct yesterday.  Resistance is at 3.88 and support 3.75.
  • Soybeans technically are in correction mode with the market pulling back yesterday and again overnight.  Support at 10.30 and resistance 10.80.
  • Wheat technically in correction mode as well.  Support for Chicago May at 4.80 and resistance 5.20.
  • USDA reported 110,000 MT of corn to Japan for 2017/18.

WEATHER

  • Argentina is dry through the end of the week, but chances of rains are sticking in the 6-10 and 11-15 period.  Warmer temperatures are seen along with the rains, however.
  • Brazil is drier moving forward, which will allow harvest to pick up.
  • US wheat remains dry with KS and Ok areas dry for the next couple of weeks.

OUTLOOK

  • There has been a lot of speculative buying in corn, soybeans, and wheat over the last month and a half.
  • Those positions in corn and soybeans are mostly winners.
  • The USDA report sets the markets up for a pullback whether the numbers are bullish or bearish.
  • Longer term, corn has a good story unless the acre report at the end of the month comes out shockingly high.
  • Soybean supplies in the US and world are likely to be more than adequate moving forward.
  • Producers should look at protecting downside risk in beans.  I do not think corn is as urgent, but I would still rather wait for a pull-back to buy in corn rather than having a lot of upside exposure currently.
  • Wheat will probably get a bearish set of numbers today, but I look for buyers to step in on any drop to the 4.80’s.

Fun Fact of the Day:  RSVP is short for, "Respondez, s'il vous plait," which means, simply, "Please respond" in French.

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