6/12/18

Morning Bullet Points - 06/12/2018

GOOD MORNING—

 

MARKET HIGHLIGHTS

  • Markets trading higher overnight in a small recovery ahead of the USDA numbers today.
  • Crop ratings were slightly below expectations, but ratings remain historically strong.
  • CONAB estimated Brazil soybean production this morning at 118.05 MMT, which was up from 117 previously.
  • CONAB estimated Brazil corn production at 85 MMT vs. 89.2 MMT previously and the USDA currently at 87 MMT (but will update today).
  • China rumored to have been canceling US soybean cargoes yesterday.
  • 2017/18 US corn ending stocks expected to be 2.132-2.192 on Tuesday’s report.
  • 2018/19 US corn ending stocks expected to be 1.495-1.790 bbu.
  • 2018/19 global corn stocks expected to be 150.67-161 MMT.
  • 2017/18 US soybean stocks expected to be 473-550 mbu.
  • 2018/19 US soybean stocks expected to be 395-480 mbu.
  • 2018/19 global soybean stocks expected to be 83.5-92.1 MMT.
  • 2017/18 US wheat ending stocks expected to be 1.045-1.100 bbu.
  • 2018/19 US wheat ending stocks expected to be 820-994 mbu.
  • 2018/19 global wheat stocks expected to be 260-265.8 MMT.
  • Corn technically is in its near-term down trend, and is very oversold.  July has support at 3.70 and resistance 3.95.
  • Soybeans technically are in a lower trend with support at 9.50 and resistance 9.80.
  • Wheat is in its higher trend with support at 5.15 and resistance at 5.55.
  • USDA reported 114,00 MT of corn to Mexico for 2017/18.
  • USDA reported 38,000 MT of corn to Mexico for 2018/19.

WEATHER

  • Cooler temperatures seen during the 6-10 period, which had not really been much of a concern anyways.
  • Spotty showers expected to move across the Midwest over the next couple of weeks.
  • Ukraine rains expected to ease dry concerns there while Russia remains dry.

 

OUTLOOK

  • The USDA will be out at 11am CST (Chicago).
  • US and global ending stocks for corn should be the tightest that we’ve seen in a few years, but also not exactly running out.  Fund selling continues to be a feature, so if we get some bullish news, I think there is quite a bit of upside potential as the market looks to be overdone to me.
  • Soybeans will probably depend on the corn market to go higher.  Supplies are likely to be more than adequate in the US and world, but also not exactly burdensome.  The US crop is off to a good start, but there is time for that to change.  If corn goes higher, look for beans to follow.
  • Wheat continues to look pretty good technically with a few major exporters around the world seeing some crop problems.  Look for pullbacks to be supported.

 

Fun Fact of the Day:  It is a common misconception that bears hibernate during the winter. While bears tend to slow down during the winter, they are not true hibernators. Black bears, Grizzly bears and Brown bears do go into a deep sleep during the winter months, known as torpor. Hibernation is when animals “sleep” through the winter.

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