9/10/18

Morning Bullet Points - 09/10/2018

GOOD MORNING—

 

MARKET HIGHLIGHTS

  • Markets trading mixed overnight in a quiet trade as the market awaits Wednesday’s updates from the USDA.
  • Managed funds were net buyers of 73 corn contracts to reduce the net short to 56,800 contracts; they sold 9,000 soybeans to increase the net short to 62,700, and sold 9,000 wheat to reduce the net long to 42,700 contracts.
  • Chinese soybean markets traded sharply higher overnight with frost risk in their northeastern plains.
  • China August bean imports were 9.1 MMT vs. around 8.5 a year ago.
  • China also reiterated that any new tariffs would be countered.
  • USDA will release their Sep. production forecast on Wednesday.  I will send out estimates later this morning, but expectations are for a smaller corn yield and bigger bean yield.
  • Corn technically continues to be stuck in the range we have seen since June with moving average resistance above the market near 3.67 and support below at 3.60.
  • Soybeans remain stuck in their range as well with resistance above the market near 8.60 and support below at 8.30.
  • Wheat bounced off support at the bottom of its channel Friday with support at 5.00 and resistance 5.25.
  • USDA reported 132,000 MT of soybeans to unknown for 2018/19.

 

WEATHER

  • Cool temperatures linger this weekend before returning warmer in the 6-10 and 11-15 for most of the Midwest.  With recent rains and time of year, the warm temperatures are not a problem.
  • Rains finish up in the ECB the next couple of days and then turn dry for the 6-10 and early 11-15 periods, which will allow harvest to start in a lot of places.
  • Overall, nothing too significant on the weather front.

 

OUTLOOK

  • Slow trade in corn to start the week with not a lot of interest from traders ahead of the report Wednesday.  Bigger picture outlook is unchanged, which is that US and global supplies are coming down and this is the time of the year when we should be finding a seasonal low.  Look for pullbacks to be supported.
  • Soybeans bounced overnight, which may be related to the larger than expected managed fund short position.  Beans likely have the weakest fundamentals moving forward, which means that corn will have to lead a move higher.
  • Wheat has had a healthy correction over the last few weeks.  The fundamentals did not really change much, so I look for the uptrend to reassert itself.

 

Fun Fact of the Day:  It was agency co-founder Dan Wieden who coined the now-famous slogan "Just Do It" for a 1988 Nike ad campaign, which was chosen by Advertising Age as one of the top five ad slogans of the 20th century and enshrined in the Smithsonian Institution.

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