- Markets higher overnight with corn, soybeans, and wheat all bouncing off moving average support for now.
- China has met with members of the EU to push back against the US’ protective trade practices.
- An 8-year low in Chinese hog prices has some producers there putting expansion plans on hold.
- Weather is supportive HRW with some of the rains taken out.
- Corn technically tested moving average support in the low 3.80’s yesterday and is bouncing this morning. The trend is higher, but need to close firm today to avoid a deeper correction. Resistance at 3.93 in the May.
- Soybeans technically pulled back to test moving average support near 10.38 before bouncing off the lows yesterday. Support at 10.38 and resistance all the way up at 10.80.
- Wheat also pulled back to a support area near 4.60 and is bouncing. There is moving average resistance in the mid-4.70’s, which if the market could push through projects new highs. Support in the mid-4.60’s and resistance 4.80.
- US plains rains have been reduced with dryness returning after some rains in the next few days.
- The Midwest is drier the next 10 days before chances for rain return in the 11-15 period.
- Snow across much of the Midwest today will keep progress in the field limited.
- Better rains look to be popping up in S. Brazil where double-crop corn is growing.
- Corn pulled back to support and is looking strong this morning. We need to see a firm close today to signal the higher trend is still in place. Fundamentally, I think lower acres in the US and reduced South American corn crops support higher price levels than where we are trading currently.
- Soybeans also pulled back to some support and have been able to bounce this morning. I still struggle to figure out how the China tariffs will influence global supply and demand negatively other than shifting trade flows. Argentina just had a crop failure, which tightens the global balance sheets moving forward. With the market consolidating in the upper end of the range we’ve seen the last few years, I think we are getting close from a timing standpoint to breaking out to the upside.
- Wheat looks similarly to corn/soy complex with the market pulling back to support and bouncing. The weather is supportive with HRW rains being taken out. We need to close firm today, however.
Fun Fact of the Day: Flamingos’ eggs sometimes have pink yolks. This is due to their consumption of the same algae and shrimp that turns their feathers pink.