5/10/18

Morning Bullet Points - 05/10/2018

GOOD MORNING—

 

MARKET HIGHLIGHTS

  • Markets trading mixed overnight in a quiet pre-report trade.
  • CONAB was out this morning with Brazil soybean production at 116.99 MMT (116.24 expected today) and Brazil corn production at 89.2 MMT (88.86 expected today).
  • Pretty disappointing export sales across the board.
  • Estimates for the numbers today:

 

2017/18 US Ending Stocks

Actual

Average

Range

Last Month

 

 

Corn Stocks

 

2.178

2.150-2.207

2.182

 

 

Soybean Stocks

 

541

495-575

550

 

 

Wheat Stocks

 

1.065

941-1090

1.064

 

 

 

 

 

 

 

 

 

 

2017/18 World Stocks

Actual

Average

Range

Last Month

 

 

Corn Stocks

 

195.18

192.17-198

197.78

 

 

Soybean Stocks

 

89.9

88.5-91

90.8

 

 

Wheat Stocks

 

271.13

268.5-273.4

271.22

 

 

 

 

 

 

 

 

 

 

2018/19 US Ending Stocks

Actual

Average

Range

Last Month

 

 

Corn Stocks

 

1.628

1.467-1.907

 

 

 

Soybean Stocks

 

535

400-715

 

 

 

Wheat Stocks

 

930

780-1.075

Ar

 

 

 

 

     

 

 

 

2018/19 World Stocks

Actual

Average

Range

Last Month

 

 

Corn Stocks

 

186.35

174-193.8

 

 

 

Soybean Stocks

 

90.52

75.5-97

 

 

 

Wheat Stocks

 

269.18

260-278.7

 

 

 

 

US Wheat production

Actual

Average

Range

Last Year

 

All Wheat

 

1.774

1.612-1.86

1.741

 

Winter Wheat

 

1.183

1.062-1.304

1.269

 

HRW

 

654

550-797

750

 

SRW

 

307

218-330

292

 

White Winter

 

229

201-260

227

 

 

 

 

 

 

 

2017/18 South American Production

Actual

Average

Range

Last Month

Arg. Corn

 

32.27

31-33

33

Arg. Bean

 

38.69

37-40

40

Brz. Corn

 

88.86

83.9-92

92

Brz. Bean

 

116.24

114.9-119

115

                         
                             

 

  • Key numbers will be SA production and 2018/19 US and world ending stocks.
  • Corn technically remains in the up-trend that started last winter with July support near 4.00 and resistance at 4.05.
  • Soybeans technically are trading near their recent lows, but within the range we’ve seen this year.  Support for July is at 10.00 and resistance 10.30.
  • Wheat technically is in correction mode with support for July Chicago at 5.00 and resistance 5.50.

 

WEATHER      

  • The northern Midwest continues to have chances for rains over the next couple of weeks, which will keep corn planting progress behind average.
  • Argentina is finally expected to dry out after the current system moves through to allow harvest to pick up.
  • Double crop corn areas in Brazil may catch rains over the next couple of weeks.

 

OUTLOOK

  • We will know a lot more after the USDA numbers come out this morning, but the fact that corn/beans/wheat are all trading off recent highs reduces the risk of going into the numbers with a bullish bias.
  • We are likely to get confirmation that US corn/bean/wheat supplies are more than adequate for now, but as long as ending stocks year over year are forecast to be lower, I think prices will hold together.
  • Bigger picture, I think it all goes back to whether or not supplies are growing.  If they are going higher, price is doing its job of keeping supply ahead of demand, and prices are high enough.  If stocks are going lower, prices are probably too cheap.  We will see what the USDA says today, but I think we can trade higher over time.

 

Fun Fact of the Day:  Spam is a canned precooked meat product made by the Hormel Foods Corporation, first introduced in 1937. The labeled ingredients in the classic variety of Spam are chopped pork shoulder meat, with ham meat added, salt, water, modified potato starch as a binder, sugar, and sodium nitrite as a preservative.

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