7/12/18

Morning Bullet Points - 07/12/2018

GOOD MORNING—

 

MARKET HIGHLIGHTS

  • Markets trading higher overnight following the push to new lows in corn/beans yesterday.
  • Export sales out this morning for wheat came in at 136,400 MT (200-500,000 MT), old crop corn 402,100 MT (400-800), new crop corn 128,000 MT (250-550), old crop soybeans 158,600 MT (200-500), new crop soybeans 270,800 MT (250-550).
  • Disappointing sales relative to already low expectations.
  • USDA will be out at 11 am CST today with little in the way of changes expected for US corn/soybean production.  Keep an eye on Brazil corn production as well as Russia/Ukraine/EU corn production.  US balance sheets unlikely change much while world corn could tighten from already tight levels.
  • US soybean exports could see the adjustment related to the US/China tariffs although export commitments are running extremely strong.
  • China’s Ministry of Ag cut its soybean import estimate by 1.8 MMT.
  • Corn technically remains in its lower trend with support for Dec. at 3.50 and resistance at 3.70.
  • Soybeans technically remain in their lower trend with Nov. support at 8.30 and resistance at 8.80.
  • Wheat technically broke support at 4.80 yesterday.  If it settles under that level today, the next support is near the year’s lows close to 4.50.

 

WEATHER

  • Temperature start to cool the next few days, and drop below normal for most of the Midwest in the 6-10 period.  Normal temperatures seen in the 11-15.
  • Scattered rains expected across most of the Midwest for the next couple of weeks, will limit dryness concerns from a national standpoint.
  • Ukraine and Russia rains have been reduced for the weekend.

 

OUTLOOK

  • The corn/soybean markets continued to work lower yesterday on trade uncertainty.  The weakness was widespread with crude trading 4-5% lower as well.
  • Taking a step back from the noise, current corn values do not reflect the tight world corn stocks situation.  The focus is more on the strong crop ratings in the US, and the fact that we have enough for now.  Longer term, the world situation will matter, but that time is apparently not now.  That does not mean it cannot change today.  This is the time to be patient with sales.
  • Soybeans continue to see the fear trade with strong ratings in the US also pressuring prices.  Until there is some trade resolution, soybeans can probably continue to struggle.  However, if there was even a hint of trade resolution, we would probably be looking at a sharply higher trade in beans…I guess we will have to watch patiently.
  • Wheat had been holding together better than corn/beans, but could not shake them yesterday.  With the break of support at 4.80, we could see sellers step in there as support becomes resistance.

 

Fun Fact of the Day:  The ordinary paper that consumers use throughout their everyday life such as newspapers, books, cereal boxes, etc, is primarily made of wood pulp; however, United States currency paper is composed of 75% cotton and 25% linen.

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