9/18/18

Morning Bullet Points - 09/18/2018

GOOD MORNING—

 

MARKET HIGHLIGHTS

  • Markets trading mixed overnight with the latest wave of tariffs putting some pressure on beans while wheat recovers part of its late day sell-off yesterday.  Corn continues to see an uninspiring trade, sitting somewhere between the wheat and bean markets.
  • Crop progress yesterday was lacking of any surprises with corn steady with a week ago at 68% g/e and beans down 1 to 67% good-to-excellent.
  • $200 billion of tariffs were placed on Chinese goods, as past tariffs have not gotten the results the president is looking for yet.
  • NOPA crush yesterday disappointed at 158.8 mbu vs. expectations of 163.8.
  • Egypt tendered for wheat yesterday with Russia the cheapest offer again.
  • Ukraine seen as increasing barley and wheat acres next year at the expense of corn.
  • Ukraine estimated their wheat production at 24.2 MMT (USDA 25.5).
  • Ukraine estimated corn production at 29.5 MMT (USDA 31).
  • Ukraine said they would not restrict wheat exports.
  • South Korea bought 68,000 MT of US corn.
  • Corn technically pushed to a low yesterday for the Dec. contract with the market currently 12 cents above the level where Sep. expired and 17 above the level where July expired.  On a continuation chart, corn is still range-bound with major support at 3.30.
  • Soybeans technically appear to be starting their next leg lower with support for Nov. at 8.00 and then 7.80.  Resistance at 8.30.
  • Wheat remains in the uptrend that started last winter with support at 5.00 and resistance 5.40 and 5.55.

 

WEATHER

  • Warm temperatures to speed dry down seen over the next 10 days before the 11-15 cools off.
  • Scattered rains move across the north and south ends of the corn-belt over the next 5 days while more general rains are seen in the 6-10 to slow progress.
  • Overall, nothing market moving here.

 

OUTLOOK

  • Dec. corn pushed to new lows yesterday with the level where Sep. expired at 3.37 a number many will start looking at as next support.  Yields continue to be very good, but the bigger picture story of tightening global supplies is unchanged.  There is risk of another 15-20 cents lower in corn, but longer term, current fundamentals suggest the market is undervalued.
  • Soybeans continue to struggle with big yields and new tariffs.  They have the weakest fundamentals, and will likely continue to be the weakest leg moving forward.
  • Wheat got some help overnight with the lower Ukraine production estimate with the USDA’s production numbers higher than pretty much everyone else.  Technically, the market looks like it can still go higher.  Look for pullbacks to find buyers.

 

Fun Fact of the Day:  One in every 30 million lobsters are yellow.

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