7/25/18

Morning Bullet Points - 07/25/2018

GOOD MORNING—

 

MARKET HIGHLIGHTS

  • Markets trading mixed overnight with big gains in wheat following lower than expected yield checks on the spring wheat tour as well as another drop in EU wheat production estimates from Strategie Grains.
  • $12 Billion in aid was announced yesterday to help farmers/producers hurt by China’s tariffs.  First reaction was that this means the trade war is going to drag on for a while.  It is impossible to guess how this is all going to play out.
  • Cash corn at the Gulf was firm yesterday as short crops in other exporting countries around the world is leading to new US interest.
  • Corn technically pulled back to support at its 20 DMA and then bounced overnight.  A sustained trade above there likely signals the end of the downtrend.  Support for Dec. at 3.65 and resistance at 3.86.
  • Soybeans technically posted a bullish outside up day yesterday before pulling back a bit overnight.  Nov. has moving average support at 8.65 that needs to hold to signal the end of that lower trend.  Resistance above the market at 8.80 and then 9.30.
  • Wheat technically is resuming its uptrend that was started when the base was built last winter.  Resistance above the market at 5.55 and support below at 5.14.

 

WEATHER

  • Cool temperatures seen across the Midwest through the end of the 10-day period.  Normal temperatures in the 11-15.
  • Scattered rains over the next couple of weeks will limit any widespread weather issues.
  • Ukraine expected to catch timely rains on its corn.

 

OUTLOOK

  • Corn pulled back yesterday to support and has caught its footing overnight.  Spillover strength from wheat is likely helping, but corn still has a good outlook considering the tightening of global supplies.  Again, it is impossible to know how the aid will affect the markets, but corn will probably be impacted the least.  The market is still recovering after posting the key reversal a couple weeks ago.  Speculators are starting to feel some pressure on their short positions.  Global stocks to usage is still forecast to be 40+ year lows.  Corn seems undervalued here.  Be patient with sales and look for pull-backs to find buyers.
  • Soybeans made a strong push higher with many wondering where the strength came from.  The aid announcement would have been viewed as bearish historically, but no one knows what is going to come from it.  Disregarding all of the “noise” in the markets, the bean supply and demand situation is not as supportive as the corn and wheat moving forward.  However, it’s hard to imagine beans staying near current price levels if corn and wheat trade higher.
  • Wheat continues to be fed a steady diet of supportive fundamental news as the EU crops continue to be marked lower.  Additionally, I think most were surprised by the findings on the spring wheat tour yesterday.  Technically, the wheat market looks the best with next resistance hovering about 30 cents above the market.  Look for pullbacks to find buyers.

 

Fun Fact of the Day:  Research shows that social media may help you live longer if your online social interactions increase your real world social interactions.

Want Updates?

Keep up with our market interpretation news and other important info. To receive text or email updates, simply click the button below and fill out the form.

Get Updates