5/30/18

Morning Bullet Points - 05/30/2018

GOOD MORNING—

 

MARKET HIGHLIGHTS

  • Markets trading lower overnight in follow through from yesterday’s weak finish as well as bearish crop ratings for corn yesterday afternoon.
  • Corn rated 79% good-to-excellent, which is the highest late May rating on record.  The correlation between initial crop ratings and final yields is not very good, but it is a strong place to start.
  • The soybean crop continues to run ahead of pace with corn near average.
  • Wheat ratings improved to a still low 38% good-to-excellent rating and spring wheat planting caught up to near average.
  • Corn open interest was higher on the sell-off yesterday, so I do not think you can credit the weakness to fund liquidation.
  • Corn technically remains in a long-term uptrend with support in the July at 3.96 and 3.94.  Overhear resistance comes in at 4.02.  Stochastics are nearing oversold conditions.
  • Soybeans technically remain range-bound with support in the July coming in at 10.20 and resistance 10.50.  There is not much of a trend.
  • Wheat technically remains in a longer-term uptrend with support at 5.16 and resistance 5.55.
  • No sales on the USDA’s daily report.

 

WEATHER

  • Well above normal temperatures are set to return over the next two weeks.
  • Spotty rains are seen across the Midwest for the next couple of weeks.
  • Overall, no major problems from a national standpoint.

 

OUTLOOK

  • Corn, beans, and wheat all pulling back, with corn driving the bus.
  • The bigger picture outlook is unchanged, but a lot of speculative interest is in corn and we had bearish weather and bearish crop ratings.  Some shaking of the tree is healthy, but I think we are getting close to support that will hold.  Look for buyers to show up on additional weakness.
  • Soybeans continue to be somewhat of a follower as the expectation for higher US acres is limiting buying interest.  At some point, though, I think a higher corn market will pull beans out of their range to the upside.  Nov. still has a potential downside target at 10.15, which would fill the gap from early last week.
  • Wheat is also pulling back as the market ran out of new buyers.  The trend is still higher, with the base from last winter still in place.  Look for the market to be well supported another 10 cents lower.

 

Fun Fact of the Day:  A true fun fact today, June 1st is National Donut Day.  Customers will be able to get a free donut of their choice on Friday from Krispy Kreme with no purchases necessary.

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