4/12/18

Morning Bullet Points - 04/12/2018

GOOD MORNING—

MARKET HIGHLIGHTS

  • Markets trading mixed overnight with the bean/wheat spreads seeing a large move while corn lingers between those two.
  • Export sales out this morning for wheat were 120,700 MT (150-350 expected), new crop wheat 68,000 MT (100-300), old crop corn 839,900 MT (900-1,400), new crop corn 56,000 MT (0-300), old crop soybeans 1,510,500 MT (900-1,400), new crop soybeans 954,000 MT (400-600)
  • Disappointing corn/wheat sales while old and new crop soybeans exceeded the top end of expectations.
  • USDA attaché estimated Brazil corn production at 89 MMT vs. the USDA’s number on Tuesday of 92 MMT.
  • Brazil soybean exports continue to run at a record pace.
  • USD index remains in the middle of its recent range with little reaction to the FOMC minutes yesterday.
  • Corn technically remains in its uptrend although is correcting from overbought conditions.  Support for May is near 3.83 and resistance near 3.93.
  • Soybeans continue to trade in the upper end of the range that we’ve seen for the last few years with resistance at 10.80 and support 10.30.
  • Wheat is working back to the level where we started Sunday night with the gap from 4.72 to 4.74 a potential downside target today.  A base still looks to have been put in place.

WEATHER

  • KS has better rains forecast in the 6-10 period, which should help ease some of the dryness concerns.
  • The upper Midwest remains wet for the next two weeks, which will keep field work at a slow pace.
  • Argentina is catching unneeded showers while S. Brazil is dry.

OUTLOOK

  • The corn is pulling back from the recent highs as we see consolidation near contract highs in December.  The trend is higher and the fundamentals are bullish, so I think eventually we make new highs.  Be prepared for the market to correct more to the downside, but the table is set for corn to go higher.
  • Soybeans have also pulled back from the recent highs as the extreme volatility over the last couple weeks is probably leading to some liquidation from speculative longs.  Longer term, the short Argentine crop is going to tighten the balance sheets considerably, so a pullback in the near term is likely to find buyers.
  • Wheat looks like it may want to fill the gap from Sunday night, which has already happened in KC and is another 4 cents in Chicago.  Look for the market to be well-supported if we get there.

Fun Fact of the Day:  So it was decided that Tuesday would be the day that Americans would vote in elections, and in 1845, Congress passed a law that presidential elections would be held on the Tuesday after the first Monday in November.

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