4/13/18

Morning Bullet Points - 04/13/2018

HAPPY FRIDAY—

 

MARKET HIGHLIGHTS

  • Markets trading mixed overnight with wheat/soybean spreaders actively selling wheat/buying beans while corn lingers.
  • Managed fund positions will be updated this afternoon with quite a bit of short covering expected in wheat.  The report will include the day when tariffs were announced and soybeans traded 50+ lower on huge volume.  I would think the selling in soybeans could surprise.
  • The Rosario Grain Exchange lowered their Argentine bean production estimate to 37 MMT (USDA 40 MMT).  BA Grain Exchange is at 38 MMT.
  • Weather is not good for the US with extreme swings expected in temperatures the next few days and a wet outlook for the northern Midwest for the next couple of weeks.
  • Trump is looking into re-entering the TPP as well as allowing the sale of E-15 year-round.
  • Gulf corn/soybean markets both firm yesterday and out of the gates this morning.
  • Corn technically remains in its long-term uptrend with consolidation taking place near the recent highs.
  • Soybeans technically are pushing up against contract highs in the Nov. with a new high close posted yesterday.  The market is overbought with May support at 10.30 and resistance 10.80.
  • Wheat technically pulled back to fill the gap left on Sunday night.  The 50 DMA provided support overnight.  The longer term base is in place.

 

WEATHER   

  • Northern Midwest weather remains wet for the next two weeks, which will limit fieldwork.
  • HRW areas have chances for moisture this weekend and the 6-10.
  • Temperatures this weekend are freezing after a mid-week warm up.
  • Southern Brazil has some better chances for rain in the 11-15.

 

OUTLOOK

  • No major changes to the outlook this morning.  Corn fundamentals are supportive, the weather is supportive, speculators are buying, and the technicals looks good.  The market should be well supported on pullbacks for now and look for higher prices over time.
  • Soybeans are trading at new highs with managed funds returning as buyers.  The Argentine crop keeps getting shorter.  US export demand is strong.  We could see a pull-back as the market is overbought, but the Argentine crop problems set beans up to go higher.
  • Wheat continues to pullback, which I’m not sure makes a lot of sense considering the weather in HRW country.  Regardless, the managed funds blew out of shorts, and the market is pulling back.  At some point, look for buyers to step back in.

 

Fun Fact of the Day:  Research shows that workers who stand at their desks after eating lunch better regulate their blood sugar than those who sit back down.

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