3/21/18

Morning Bullet Points - 03/21/2018

GOOD MORNING 

 

MARKET HIGHLIGHTS

  • Markets trading mixed overnight in a quiet trade.
  • CME raised margins yesterday to trade soybeans, SRW, and HRW.
  • South Korea bought 3 cargoes of optional origin corn.
  • FOMC rate decision will be announced today at 1, which is expected to be another hike.
  • China/US trade relations remain on the front-burner with the market paying close attention to any hint that US bean demand could be impacted.
  • Corn technically is testing support near the 50DMA at 3.73.  The trend is higher with the market oversold on the current move.
  • Beans technically are seeing mid-week consolidation similar to last week.  Support at 10.20 and resistance above 10.30l.
  • Wheat technically is very oversold, and the base that was built in December and January still looks valid.
  • USDA reported 138 tmt of corn to South Korea for 2017/18.

 

WEATHER       

  • Argentina turns back to dry for 70% of growing areas, although we are getting to the point where the crop is what it is.
  • Brazil is seeing scattered showers, which is normal.
  • US wheat areas are dry the next few days, but more chances return in the 6-10 period.  S/SW KS is still short-changed, however.

 

OUTLOOK

  • Corn was able to stabilize somewhat yesterday as the market is putting pressure on speculative longs in the market.  My longer term outlook is very friendly on low SA production, chances for lower acres in the US, and uncertainty over the US growing season.  In the near-term, we could see more downside.  Longer term, I think buying corn in this area and below will be a good move.
  • Beans are bouncing off the lows that were made earlier in the week.  Beans have the weakest fundamentals moving forward with little reason to think we get much of a bounce in beans unless it is led by corn.  For now, look for the current pull-back to continue.
  • Wheat has given back most of its gains for the year, but is finding some support near the bottom of the range where we consolidated for most of Jan./Feb.  Supplies are still more than enough, but I think this is an area where buyers are finding some value.

 

Fun Fact of the Day: Otters are known to hold hands in groups - called a raft - while they eat, sleep and rest, to prevent families losing each other.

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