5/29/18

Morning Bullet Points - 05/29/2018

GOOD MORNING—

 

MARKET HIGHLIGHTS

  • Markets finishing the night session mixed with corn/soybeans giving back early gains while wheat stays higher.  However, prices are considerably lower on news that Trump would place a 25% tariff on $50 billion worth of goods from China.
  • As of this writing corn is 5.5 cents lower, soybeans are 6 lower, and wheat is 6 lower.
  • Crop ratings this afternoon expected to show good corn ratings and planting progress near average or better for corn/beans.
  • Wheat ratings expected to remain low.
  • Friday’s commitment of traders report showed managed funds as net buyers of 8,000 contracts of corn to push the net long to 199,000, net sellers of 10,000 soybeans to reduce the net long to 98,000, and net buyers of 4,000 wheat to leave them short 1,600 contracts.  Open interest in corn/wheat the rest of the week would suggest a lot of new buying from the funds.
  • Reports that HRW in parts of KS and OK is being torn up to be planted to cotton.
  • Corn technically remains in its up-trend with stochastics easing their overbought condition.  Support for July at 4.02 and resistance 4.10.
  • Soybeans technically remain range-bound with support in the mid-10.30’s and resistance at 10.50.  Stochastics are starting to correct from overbought.
  • Wheat technically remains in its uptrend with support near 5.20 and resistance at 5.55.
  • USDA reported 28,000 MT of corn to unknown for 2017/18.
  • USDA reported 203,200 MT of corn to unknown for 2018/19.

 

WEATHER

  • Hurricane rains are expected to bring rains to the eastern Corn Belt mid-week.
  • Northern Midwest catches rain this week through the end of the 11-15 period.
  • The southern half of the Midwest is dry across much of NE and IA until the 11-15 period.  Overall, nothing too concerning.

 

OUTLOOK

  • Disappointing overnight performance as there was not any follow-through after a firm open.  I am not sure all that much has changed, so the outlook is the same.  The trend is higher and corn acres are not expected to expand.  There are no widespread problems nationally, but until there is confidence that we will raise and above trend yield, I think the downside is limited.  Look for buyers to step in on pullbacks.
  • Soybeans approached resistance at the top of the range overnight before pulling back.  They remain stuck in their range and need corn to go higher to pull them out of the range.
  • Wheat pushed sharply higher overnight as fund buying flows into that market.  The trend is higher, so look for buyers to step in on pullbacks.

 

Fun Fact of the Day:  To see a man about a dog or to see a man about a horse is an English language colloquialism, usually used as a way to say one needs to apologize for one's imminent departure or absence – generally euphemistically to conceal one's true purpose.

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