8/9/18

Morning Bullet Points - 08/09/2018

GOOD MORNING—

 

MARKET HIGHLIGHTS

  • Markets trading mixed overnight with corn/soybeans chopping sideways with wheat pulling back.
  • Weather is a little supportive this morning with heat across the northern Corn Belt and not much rain.
  • Strategie Grains cut their EU wheat production forecast another 1.5 MMT yesterday.
  • Export sales this morning for wheat were 317,100 MT (200-500 expected), old crop corn 554,500 MT (300-600), new crop corn 657,700 MT (400-900), old crop soybeans 421,800 MT (100-400), new corp soybeans 532,500 MT (300-600)
  • Decent sales with most coming in toward the upper end of the range.
  • Corn technically continues to run into resistance near the recent highs with moving average resistance at 3.93 and support at 3.80 and 3.77.
  • Soybeans technically in an uptrend with moving average resistance at 9.09.  Support at 9.00 and 8.80.
  • Wheat technically is pulling back from recent highs, but the trend is higher.  Support for Sep. Chicago at 5.55 and resistance 5.90.
  • USDA reported 135,000 MT of meal to the Philippines for 2018/19.

 

WEATHER

  • Heat is seen across the northern Midwest the next few days before cooling off in the 6-10.  The 11-15 period has heat return.  Biggest areas of concern are the Dakota’s into MN.
  • Chances for spotty showers in the 6-10 are about the only moisture over the next couple of weeks.

 

OUTLOOK

  • We may see another day of consolidation as we head into the report tomorrow.  New news is slow as we wait to hear the USDA’s production estimates tomorrow at 11am CST.  Regardless, it is looking more and more like the crop is not where we thought it was a month ago?  With the production problems in Europe, the world supply situation is supportive.  Look for pullbacks to find buyers.
  • Soybeans are testing resistance at their 50 DMA.  The heat across the Dakota’s can have a greater impact on national bean production as they grow a larger portion of the US bean crop.  The supply outlook for beans is not as supportive, but the market is positioned more aggressively short beans.  This sets things up for short covering on any move higher led by the corn.
  • Wheat may need to correct in the near-term.  Longer term, I do not think the market is done pricing in all of the production problems in Europe.  Look for pullbacks to find buyers.

 

Fun Fact of the Day:  With Eric Clapton's induction into the Rock and Roll Hall of Fame as a solo artist on March 6, 2000, he became the first musician to have been inducted three times. He was first honored as a member of the Yardbirds in 1992, then with Cream in 1993 and finally as a solo artist in 2000.

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