9/17/18

Morning Bullet Points - 09/17/2018

GOOD MORNING—

 

MARKET HIGHLIGHTS

  • Markets starting the week softer with new tariff talks pressuring the soy complex.
  • Wheat firm for much of the session overnight after Australia was hit with a frost that is expected to impact .5-1 MMT of their production.
  • Friday’s CFTC report showed managed funds as net sellers of 7,000 contracts of corn to push the net short to 63,000, net sellers of 6,000 soybeans to push the net short to 68,000, and net sellers of 24,000 wheat to reduce the net long to 18,000.
  • Funds were across the board sellers to finish the week.
  • NOPA crush expected to be 163.8 mbu for August today at 11am CST.
  • Yields continue to be very good with beans relatively better than the corn.
  • Corn technically is hovering near contract lows with support at 3.50 needing to hold or the next support at 3.30 may be tested.  Resistance is at 3.60 and 3.68.
  • Soybeans technically are hovering near contract lows as well with 8.30 a level that the market needs to recover above.  The longer we trade under there, the more likely another leg lower will be.
  • Wheat technically bounced on Friday with follow-through early last night before pulling back.  The long-term trend is higher with support at 5.00 and resistance 5.40 and 5.55.
  • USDA reported 241,000 MT of soybeans to unknown on the daily report.

 

WEATHER

  • Well above normal temperatures seen over the next couple weeks, which will speed the finish up for the US corn/bean crops.
  • Chances for rain to slow harvest later this week and in the 6-10 period.
  • Overall, no major concerns at this point.

 

OUTLOOK

  • Quiet start to the week for corn with strong yields and tariff talks keeping buyers away.  The bigger picture situation has not changed, which makes me think there is not a lot of downside risk from here, but there is not likely a reason to shoot higher either.  Look for pullbacks to be supported with sellers also stepping in on any 5+ cent rallies.
  • Soybeans continue to trade at the whims of the latest headline regarding US/China trade as well as strong harvest reports.  Until corn goes higher or there is trade resolution, beans are likely to be the weakest leg.
  • Wheat tried to rally overnight on larger than expected fund selling and Australian frost, but pulled back into the night close.  Technically, the market still looks like it can go higher.  Look for pullbacks to be supported.

 

Fun Fact of the Day:  It is estimated that only 2% of the world’s population has green eyes.

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