7/19/18

Morning Bullet Points - 07/19/2018

GOOD MORNING—

 

MARKET HIGHLIGHTS

  • Markets trading with small losses overnight with small recoveries off the lows seen post-export sales.
  • Export sales this morning for wheat were 300,000 MT (150-500 expected), corn 641,000 MT (300-600), new crop corn 774,500 MT (200-500), old crop soybeans 252,300 MT (200-500), new crop soybeans 613,400 MT (100-500).
  • Better than expected corn sales will keep the idea that USDA may be understating export estimates.  New crop soybeans better than expected.  Everything else in line with expectations.
  • There was some talk yesterday that the US and Mexico may work on a trade deal outside of NAFTA, which would be a good thing for the corn market.
  • Corn technically remains in its lower trend but is holding above last week’s reversal area.  Support at 3.55 and resistance at 3.66.
  • Soybeans technically remain in their lower trend but are holding above their reversal area earlier in the week.  Support for Nov. at 8.30 and resistance at 8.80.
  • Wheat technically continues to build off the base that was built last winter with support for Sep. at 4.80 and resistance 5.10.

 

WEATHER

  • Temperatures still are seen running below normal for the corn-belt in the 6-10.
  • Scattered rains expected over the next couple of weeks.
  • Ukraine corn areas are turning drier as their crop heads into pollination.
  • Russia is catching rains that are helping corn but are slowing wheat harvest.

 

OUTLOOK

  • Corn approached its 20 DMA yesterday, but never quite got there.  Exports were supportive today, but the market often fades the export sales reports.  Regardless, the reversal from last week is holding for now, and the fundamental outlook even with an above-trend yield in the US is supportive moving forward, especially at these price levels.
  • Soybeans continued to bounce from oversold conditions yesterday but pulled back slightly overnight.  US/China trade took a hit with China unhappy about the comments from Larry Kudlow yesterday.  Soybeans can rally on a higher corn market or some sort of trade resolution with China.  At this point, I think a move higher in corn is the more likely of the two to affect the market in the near term.
  • Wheat continues to get supportive news in the form of lower production from major exporting countries.  The base from last winter is in place.  Look for pullbacks to be supported.

 

Fun Fact of the Day:  The foggiest place in the world is the Grand Banks off the island of Newfoundland, the meeting place of the cold Labrador Current from the north and the much warmer Gulf Stream from the south.

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