10/10/18

Morning Bullet Points - 10/10/2018

GOOD MORNING—

 

MARKET HIGHLIGHTS

  • Markets trading lower overnight amongst general market weakness across most sectors.
  • USDA will be out at 11am CST tomorrow with bigger corn and soybean production expected.
  • Harvest delays expected to become more of an issue in the coming week as another widespread rain event is expected.
  • Slow harvest progress along with strong export demand for corn is supporting cash markets.
  • Year-round E-15 was announced yesterday by Trump, which is a bullish input although it may take some time for that demand to materialize.
  • Crop ratings yesterday were steady for corn and beans from a week ago.  Corn harvest is a little ahead of average while beans are behind.  Both are expected to drop on next week’s report.  Wheat planting and emergence are right on schedule.
  • China trade continues to be unresolved.
  • Corn technically continues to consolidate near the 50 DMA as we head for the October crop report.  There is no trend with stochastics neutral.  Support at 3.60 and resistance to 3.65.
  • Soybeans technically are correcting from overbought conditions with resistance at 8.60 and support at 8.40.  The market is range-bound.
  • Wheat technically continues to consolidate near the bottom of the channel that was established last winter.  Support at 5.10 and resistance 5.40 and 5.55.

 

WEATHER

  • Rains still seen moving across in the next few days, but the 6-10 and 11-15 periods are drying out, which will allow harvest to resume.
  • Scattered showers are seen across Brazil the next couple of weeks to allow their planting to remain on pace with favorable conditions.

 

OUTLOOK

  • Corn is stuck until we see what the USDA puts out tomorrow.  Whatever the yield is, it will probably drop on future reports as the current weather is taking some yield.  Global supplies are going to tighten year over year, which I believe will push prices higher over time.  Look for pullbacks to find buyers.
  • Soybeans pulled back again yesterday on bearish chart action.  The market is just stuck in its range, but the fundamentals for beans are the weakest moving forward.  It is worth noting, though, that the weather has the potential to hurt bean yields more than corn.
  • Wheat is stuck in its range as well as we wait to see what the USDA does with global wheat production.  They’ve been slow to adjust things lower in Australia in particular.  The trend is still higher, so look for pullbacks to be supported.

 

Fun Fact of the Day:  Hershey’s produces over 80 million chocolate Kisses every day.

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