10/3/18

Morning Bullet Points - 10/03/2018

GOOD MORNING—

MARKET HIGHLIGHTS

  • Markets trading mixed overnight with corn wheat trading higher much of the session before some late selling pressure showed up before the close of the night session.
  • Rumors in the market yesterday that Russia would restrict loading at 30 facilities in key grain regions to address quality concerns.  Most view this as an unofficial way to restrict exports.
  • Cash grain deals continue to be seen globally with Turkey buying 138 tmt of barley.
  • Trump is headed to Iowa next week with expectations for him to approve E-15 during summer months.
  • Corn technically is bumping into resistance in the 3.65 area with Dec. 19 corn hitting resistance near 4.00.  The market is range-bound with stochastics hitting overbought territory again.  Support at 3.55.
  • Soybeans technically remain range-bound with major overhead resistance at 8.80 and support well below the market at 8.40 and 8.30.
  • Wheat bounced off support yesterday and finished with sizable gains.  Support below the market at 5.10 and resistance at 5.40 and 5.55.
  • USDA reported 230,000 MT of corn to Japan for 2018/19.

WEATHER

  • Rains still seen setting in across the Midwest over the next 10 days to slow harvest.  Bushels will be lost in some areas.
  • Brazil is expected to continue to catch some rains over the next 10 days to help early crop emergence.

OUTLOOK

  • Corn finished at a new recent high yesterday, following the Russian wheat news and signs that “the funds” are jumping ship on their corn shorts.  Plenty of people are beating the “big crops get bigger” drum although the current wet weather is going to slow harvest and reduce yields some.  The longer-term outlook is still friendly, in my opinion, on tightening global corn supplies.
  • Soybeans continued to grind higher yesterday on short-covering and what looks to waning interest from the managed funds to be short.  Emerging market currency moves may be playing a part as well as many soft commodities have been strong as of late.  Regardless, beans have the worst supply fundamentals moving forward and will need to see corn move higher to have a chance at seeing gains over time.
  • Wheat rallied yesterday on Russian news.  The market pulled back overnight.  The managed fund long position has been pushed out.  Technical support held.  Look for pullbacks to find buyers.

Fun Fact of the Day:  The FDA does not regulate the word "local," so the produce you get from a farmer's market could be from hundreds of miles away.

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