5/31/18

Morning Bullet Points - 05/31/2018

GOOD MORNING—

 

MARKET HIGHLIGHTS

  • Markets trading higher this morning in a relatively active night session.  Trump announces new steel and aluminum import tariffs on the EU, Mexico and Canada.
  • Export sales delayed until tomorrow due to Memorial Day.
  • Last day of May has corn trading essentially unchanged for the month, soybeans down 4 in the November contract, and wheat up 14 cents.
  • South Korea tendered for 110,000 MT of optional origin corn.
  • Egypt rejected a cargo of Russian wheat.
  • China successfully auctioned off some 2014 and 2015 model corn from govt. reserves.
  • Ukraine winter wheat production is expected to drop to 24 MMT from25.4 MMT from a year ago due to dry weather.
  • Managed funds were featured sellers of corn/beans/wheat yesterday.
  • Corn technically remains in its longer-term uptrend with support for July near 3.95 and resistance above 4.10.
  • Soybeans technically remain range-bound with support for Nov. near 10.30 and resistance at 10.60.
  • Wheat technically remains in its uptrend with support near 5.15 and resistance 5.55.

 

WEATHER

  • Well above normal temperatures stick around for the next couple of weeks across the Midwest.
  • Spotty showers over the next 5 days, followed by a mostly dry 6-10 and then spotty showers in the 11-15.  Current maps could lead to some dry concerns toward the end of that period.
  • Russia wheat areas that have been dry remain dry for the next 10 days.

 

OUTLOOK

  • Corn led the move lower again yesterday with the managed fund long running for the exits.  Support was able to hold at the bottom of the recent up-channel, and I do not think the reasons for being bullish corn have changed.  Look for buyers to support the market here.
  • Soybeans were pulled lower by corn as well, finding support near the 20 DMA.  The soybeans do not have as good of a story as corn, but if corn is going to go higher, look for beans to eventually break out of their range to the upside.
  • Wheat is being driven by speculative money flows.  They pushed it to new highs, and then the market ran out of buyers.  With the pullback to support, I look for buyers to come back in.

 

Fun Fact of the Day:  William Caxton was the first Englishman to learn to use a printing press. The Recuyell of the Historyes of Troye was his first printed book, and the first book printed anywhere in English. It was produced in 1473 on the Continent, in either Bruges or Ghent.

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