4/23/18

Morning Bullet Points - 04/23/2018

GOOD MORNING—

 

MARKET HIGHLIGHTS

  • Markets trading higher overnight following the sell-offs seen on May option expiration Friday.
  • The weather should allow most of the Midwest to get some crops in the ground the next few days.
  • Planting progress this afternoon is expected to show corn planting behind average, but the forecast looks like we could catch up.  Also, bean planting likely moves ahead of average next week with widespread adaptation of planting beans early.
  • Friday’s CFTC report was lacking of any major surprises with managed funds net sellers of 36k corn to reduce the net long to 138k, net buyers of 16k beans to push the net long out to 192k, and net buyers of 4k wheat to reduce the net short to 50k.
  • Corn technically has pulled back to test support at the 200 DMA as well as retracing most of the post-acre report rally.  The longer-term up-trend is still in place for now, but buyers need to step in.  Support for July at 3.85 and resistance 3.93.
  • Beans technically pushed below their moving average support on Friday.  If we cannot rally 7-8 cents today, a bigger correction may be coming.  Resistance at 10.48 and support 10.40 on the July contract.
  • Wheat technically pulled back to close below key moving averages Friday.  Resistance in the July near 4.80 and support 4.60.

 

WEATHER

  • US plains received rains over the weekend to help the wheat out.
  • The next 5 days are dry across the center of the corn-belt, which will allow planting to get rolling in a BIG way. 
  • S. Brazil and Argentina expected to catch rains the next couple of weeks, which will continue to cause problems during the Argentine harvest, but will help double crop corn.

 

OUTLOOK

  • Corn was weak to finish the week as option expiration as well as a clear forecast weighed on prices.  We are at a price area that needs to hold or a deeper correction is possible.  I do not think the bigger picture supportive fundamental outlook has changed, so I am sticking with a bullish bias moving forward.  However, the market may push more weak longs out of the market before it goes highs.
  • Beans were also weak into the close on Friday, but remain in the upper end of the trading range that we have seen for the last few years.  Similarly to corn, I don’t think the supportive fundamental outlook has changed, but we may need to see the market push more speculative length out of the market before we can go higher.  Regardless, I look for better selling opportunities moving forward.
  • Wheat priced in the rains last week, and the came as expected.  The base still looks to be in place, so look for buyers to step in to support on a further pullback.

 

Fun Fact of the Day: Peter Minuit purchased Manhattan Island from the Native Americans on May 24, 1626 for the estimated equivalent of $680, or at the time $24/60 Dutch Guilders.

Want Updates?

Keep up with our market interpretation news and other important info. To receive text or email updates, simply click the button below and fill out the form.

Get Updates