3/16/18

Morning Bullet Points - 03/16/2018

GOOD MORNING—

 

MARKET HIGHLIGHTS

  • Markets trading mixed overnight with soybeans higher and corn/wheat lower in a low volume, quiet trade.
  • Weather is little changed in South America, but we are to the point where the damage is done in Argentina.
  • Rosario Grain Exchange lowered their Argentine corn estimate to 32mmt and beans to 40mmt.
  • NOPA crush came in at a record for February 153.7 mbu.
  • Corn technically remains in its up-trend, but is correcting from overbought conditions.  Support at 3.81 and resistance 3.84.
  • Soybeans technically remain in an up-trend, but are in correction mode.  Support at 10.30 and resistance at 10.50.
  • Wheat technically is in correction mode as well, with support at 4.60 and resistance 4.82.
  • USDA reported 20,000 MT of soybean oil to unknown for 2017/18.

 

WEATHER

  • Argentina has rains still in the forecast this weekend before returning dry again in the 6-10 and 11-15.
  • Brazil has scattered showers, which won’t slow harvest much, but will also help 2nd crop corn.
  • US wheat areas continue to see rains push further into KS over the next few days, although it looks questionable whether or not it will push into the driest areas of HRW country.

 

OUTLOOK

  • Corn is correcting from its recent highs.  Fundamentally, I do not think anything significant has changed in the last few days.  The longer-term outlook with lower acres in the US and lower production in South America is very friendly with considerable upside potential.  However, the market is loaded with spec. longs and the CME raised margins, which makes me think we are going to see a pullback in the near term.
  • Soybeans traded sharply lower last week, have bounced off lows this week, but still look to be in correction mode.  The market is still loaded with speculative longs, and all of the bullish news (lower Argentine production) is arguably in the market.  Look for the current correction to continue in the near term.  Longer term, I think beans can go higher, but they will probably be a follower of the corn market.

 

Fun Fact of the Day:  The lowest seed ever to win the tournament was the #8-ranked Villanova. The Wildcats took home the coveted net in 1985. The very next year, 11th seeded LSU became the lowest seed to crack the Final Four. That feat was repeated by George Mason in 2006 and VCU in 2011.

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