GOOD MORNING—

MARKET HIGHLIGHTS

• Markets trading mixed this morning with soybeans higher while corn/wheat trade lower.
• Friday’s commitment of traders showed managed funds as net sellers of 44,800 contracts of corn to push the net short to 110,000, buyers of 17,000 soybeans to reduce the net short to 12,000, and sellers of 9,000 wheat to increase the net short to 86,000 contracts. 
• The corn selling was greater than expected as that included the day a week and a half ago when we saw double digit gains.
• USDA will be out tomorrow with updated supply and demand numbers.  Expectations:

• US corn/soybean production will grab all the headlines with expectations for both to be lower than a month ago.
• Crop progress this afternoon will have the first harvest progress number.
• Yield reports continue to be slow to roll in.
• Corn technically failed at 20 DMA resistance last week and is pulling back.  Support is in the mid-3.50’s with resistance at 3.60.  A low may have been put in place on the drop below 3.45, but the market is in pull-back mode for now.
• Soybeans technically pulled back last week after running into resistance near 9.80. 
  Support is at 9.60, but the market looks vulnerable to more downside to next support at 9.45.
• Wheat technically is correcting from overbought conditions.  Support at 4.15 and resistance 4.60.
• USDA reported 352,000 MT of soybeans to unknown for 2017/18.

WEATHER

• Rains seen hitting the northern Midwest the next couple of days.  Spotty showers across the Midwest during the 6-10 and 11-15 periods.
• Temperatures run mostly above for the next two weeks, which will be welcome to help speed up maturity after the recent cool temperatures.

OUTLOOK

• Corn has a heavy feel to it, as the market seems to be growing more confident that national corn yield is not going to drop significantly.  Demand is strong, but supplies are enough to meet it.  I am still in the mindset that August 31^st was the seasonal low, but we will need to see a reduction in yield for the trade to attempt a run higher.
• Soybeans continue to see incredible demand as well, but the rally stalled out last week at major resistance.  Unless the USDA drops production by a significant amount tomorrow, I think a bigger pullback is possible.
• Wheat is following corn with more of a pullback possible.

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