3/23/18

Morning Bullet Points - 03/23/2018

GOOD MORNING—

MARKET HIGHLIGHTS

  • Markets trading mostly lower overnight as the markets grow more concerned over a trade war….
  • President Trump now considering vetoing the Omnibus bill.
  • Export sales were out this morning due to the snow storm with wheat sales 265,200 MT (100-300 expected), new crop wheat 163,400 MT (50-200), old crop corn 1,470,200 MT (1,400-2,100), new crop corn -14,500 MT (100-300), old crop soybeans 759,000 MT (700-1,400), new crop soybeans 140,000 MT (50-200).
  • Sales on the disappointing side at the low end of expectations.
  • April options expire today with the biggest corn open interest at the 3.80 strike, biggest bean OI at 10.40, and wheat 4.60.
  • Reuters running a story this morning about Chinese soybean buyers drawing up contingency plans.  link
  • Corn technically has dropped to the bottom of the consolidation zone that we saw for much of February.  There should be good support near 3.70 with resistance above the market near 3.80.
  • Soybeans technically have pulled back to the top of the range that was traded for much of 2017.  Support needs to hold here or a drop to 9.80 is possible.
  • Wheat technically retested the lows from earlier in the week and has bounce.  Major support in the mid-4.40’s and resistance in the mid-4.60’s.

WEATHER     

  • US winter wheat areas have pulled back on rains over the next couple of weeks.
  • Argentina is dry over the next couple of weeks.
  • Scattered showers across Brazil.

OUTLOOK

  • We are finally getting a healthy correction in corn that was much needed if we are going to trade higher.  Look to re-own previous sales to position for a move higher in the coming months.
  • Soybeans have pulled back from the highs.  The trade war has the biggest chance of influencing soybeans, but it will be hard for soybean buyers to source the quantities of US soybeans sold to China from other producers.  Soybeans do not have as good of a story as corn, so they probably keep dropping until corn can stabilize.
  • Wheat pulled back overnight as well to test support from earlier in the week.  Look for buyers to step in to support here.

Fun Fact of the Day:  A loaded grain train with 112 cars on average is about 15,000 tons. Loaded coal trains can be as heavy as 20,000 tons.

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