GOOD MORNING—

HIGHLIGHTS

• Markets trading with small losses overnight as harvest pressure weighs on corn/soybeans and wheat see follow through after Friday’s sell-off.
• USDA on Friday released supportive corn/soybean stocks numbers and bearish wheat production numbers.

• Friday’s commitment of traders report showed managed funds as net buyers of 1,200 corn to reduce the net short to 133,400 contracts, net buyers of 15,000 soybeans to push the net long to 28,000, and net buyers of 15,000 wheat to reduce the net short to 64,700.
• Low water levels on the Mississippi are supporting barge freight, which is weighing on basis.
• Corn technically found support again last week sub-3.50 with the market closing above the 20 DMA on Friday.  Support at 3.53 needs to hold or the next leg lower will probably be underway.  Resistance is at 3.64.
• Soybeans technically put in an outside bar higher on Friday following the supportive report.  Moving average support is at 9.62 and resistance 9.66.  Next resistance is at 9.80.
• Wheat pushed through moving average support overnight at 4.46.  Resistance at 4.60.
• USDA reported 597,000 MT of corn sold to Mexico for 2017/18 on the daily report.
• USDA reported 132,000 MT of soybeans to China for 2017/18.

WEATHER          

• North and west Brazil caught some needed rains this weekend with more expected the next couple of days.
• Southern Brazil catches rain over the next couple of weeks with slight chances for Northern Brazil in the 11-15.
• Argentine growing areas caught rain this weekend to remain on the wet side, but this week is dry.  Rains return in the 6-10.
• The WCB is wet the next few days to slow harvest, but 6-10 and 11-15 are dry.
• Overall, dryness in Brazil is probably the only issue to monitor.

OUTLOOK

• The USDA numbers Friday provided a boost to the corn/soybean markets.
• The corn numbers are not likely to have much of an impact as stocks are still more than adequate.  The big Mexican corn sale today and the active buying below 3.50 recently may be related.  At the end of the day, there are willing sellers above the market and willing buyers below the market.  Until some of the carry comes out of the market, the chances of a rally seem slim. 
• Soybeans had a pretty good report on Friday with futures able to push above the cluster of moving averages in the 9.60’s.  Keep an eye on Brazil weather as the market is already trading big production in the US.
• Wheat had a bearish report on Friday.  The market had a nice bounce going in, so look for a pullback.