4/26/18

Morning Bullet Points - 04/26/2018

GOOD MORNING—

 

MARKET HIGHLIGHTS

  • Markets trading mixed overnight with soybeans playing catch up to corn/wheat while corn/wheat pullback from yesterday’s gains.
  • Exports this morning for wheat were 297,200 MT (-100-200 expected), new crop wheat 280,700 MT (150-350), old crop corn 697,100 MT (800-1,200), new crop corn -76,600 MT (200-400), old crop soybeans 371,300 MT(400-700), new crop soybeans 166,500 MT (400-700).
  • Disappointing corn/soybean sales.  Better than expected wheat sales.
  • Impressive bull spreading yesterday in corn and soybeans with the Dec/Dec and Nov/Nov spreads at recent highs.
  • An export terminal in Argentina is down following an accident the night before last.  This will be offline for a few months, but it is not as if they were going to export many soybeans anyways.
  • Corn technically is approaching the recent highs for the nearby contract with resistance at 3.95 and support 3.85.  The trend is higher and the return to these levels suggest we eventually break out of this range to the upside.
  • Soybeans technically are working higher again as well, but remain within their range.  July support at 10.40 and 10.30.  Resistance at 10.50 and 10.80.
  • Wheat technically has returned to recent highs on its three-day moon shot.  We are overbought now, but a base looks to be in place with the market working sideways to higher.
  • USDA reported 107,000 MT of corn to unknown for 2017/18 on the daily report.

 

WEATHER    

  • The HRW areas have chances for rains in the 6-10 and 11-15.
  • The Midwest is dry the next few days to allow fieldwork to ramp up.
  • The 6-10 will slow that progress, but the 11-15 is dry again.
  • South America has some chances for rain in Brazil double crop areas.

 

OUTLOOK

  • Corn had another healthy day yesterday. We are probably getting to levels where some hedge pressure will start to show up, but the focus is turning away from selling grain and to getting the crop in.  We have also had the opportunity to sell these prices previously, so I think we have to go higher to see meaningful hedging.  The bigger picture outlook remains supportive.  Look for pullbacks to find buyers and be patient with sales.
  • Soybeans have seen some impressive bull spreading the last two days with not a lot of flat price gains to show for it.  I think that could be about to change.  Bigger picture, the Argentine crop failure sets us up for higher prices.
  • Wheat is being a little over-extended after the last two days, but the market looks good technically.  Buyers likely step in on a pullback from here.

 

Fun Fact of the Day:  It takes 75,000 crocus flowers to produce one pound of saffron – which is why it is the most expensive spice in the world. 

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