GOOD MORNING—
HIGHLIGHTS
- Markets trading mostly lower overnight with soybeans giving back much of yesterday’s gains.
- S&P dropped China’s bond rating overnight.
- Early harvest results continue to have a theme of better than expected corn yields.
- Export sales this morning for wheat were 307,200 MT (300-500 expected), corn 526,900 MT (700-1,000), soybeans 2,338,100 MT (1,200-1,500).
- Disappointing corn/wheat sales with another BIG week for soybean export sales, as expected.
- Corn open interest higher yesterday again with managed funds likely adding to shorts.
- Cash corn/soybean markets at the gulf firm.
- Corn technically was able to push above 3.50 yesterday, which is a level the market has had a hard time staying below. Support at 3.45 and resistance 3.54.
- Soybeans technically bumped into resistance as it approached 9.80 again yesterday. Support at 9.60 and resistance 9.67.
- Wheat technically tested a new high for the move yesterday before pulling back. Support at 4.45 and resistance at 4.60.
- USDA reported 132,000 MT of soybeans to China for 2017/18.
WEATHER
- Rains still seen working across the WCB in the next few days to slow down the drying out process. Well above normal temperatures and a dry outlook should put harvest well underway in the ECB this weekend.
- The 6-10 and 11-15 period both have needed rains hitting parts of Brazil.
OUTLOOK
- Corn found buyers on the recent drop below 3.50. With the funds already having built a decent net short, I think commercial buyers seem to see value sub-3.50. I think it is possible to see some consolidation in this area until we know more about yields.
- Soybeans have had some supportive news in the exports that have been announced the last couple of days. Technically, the bean market looks ok with higher lows since mid-August, but 9.80 has been a tough level to get through. Until the higher trend line is taken out to the downside, or 9.80 resistance is taken out to the upside, I think we will chop.
- Wheat closed firm yesterday. I think the pullback overnight should be viewed as a buying opportunity.
