4/10/18

Morning Bullet Points - 04/10/2018

GOOD MORNING—

MARKET HIGHLIGHTS

  • Markets trading mixed overnight with corn, soybeans, and wheat all trading within yesterday’s ranges.
  • Crop progress showed wheat ratings down 2% to 30% good-to-excellent
  • Corn planting 2% complete, which is average.  Spring wheat planting 2% complete vs. 6% on average.
  • China President Xi seems more willing to negotiate on trade, which is supporting soybeans as well as equity markets.
  • CONAB put Brazil soybean production at 115 MMT and corn at 88.6 MNNT.
  • Wheat open interest lower on yesterday’s rally as managed fund shorts head for the exits.
  • Corn technically continues to consolidate near recent highs as the market prepares to make the next leg higher, continuing the uptrend.
  • Soybeans are at the upper end of their range as well with resistance at 10.80 and support 10.30.
  • Wheat technically is making a run back toward its recent high with support at 4.80 and resistance 5.00.
  • USDA reported 120,000 MT of soybeans to Argentina for 2018/19.
  • USDA reported 132,000 MT of soybeans to China for 2018/19.
  • USDA reported 279,000 MT of soybeans to unknown for 2017/18.

WEATHER      

  • KS remains dry in key wheat areas over the next couple of weeks.
  • The US has rains across the northern Midwest for the next two weeks, which will make it tough to catch up on fieldwork.
  • Argentina is finally catching rains with more seen for the next couple of weeks.  Brazil is dry for the next couple of weeks.

OUTLOOK

  • The focus today will be on South American production within the USDA report and how they reflect on the world numbers.
  • The report of US soybeans sold to Argentina shows how crazy some of the bids were following the tariff moves last week when Brazil basis exploded while futures got cheap.  It also shows how short they may be on beans over the next year following their disaster this year.
  • The US balance sheets aren’t likely to have anything bullish in corn today, but the future remains bright.  Any lower reaction to “bearish” numbers will likely find buyers.
  • The US soybean balance sheets will probably also be lacking anything too supportive, but the short Argentine crop will be a support moving forward.  Look for buyers to step in on any lower reaction to the report.
  • Wheat is pushing the spec. shorts out of the market just as we get within shouting distance of the recent high.  If you’ve been long wheat and caught this move, it probably makes sense to lighten up ahead of the report as US wheat stocks will be large again today.

Fun Fact of the Day:  Dolphins’ echolocation is strong enough to detect a fish over 100 yards away.

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