GOOD MORNING,

Prices are mixed this morning with beans and soyoil lower, grains firmer.  More longs are liquidating length in beans due to the turn to better weather and stable conditions.   Dec. corn technically holding on to its $3.30 low, which does not seem to be giving way.  Corn finds support from wheat, which rallied sharply on Tuesday.  

In terms of stories, all eyes are on what China does with its corn reserves.  The Chinese gov. plans to auction around 54 tmt of state bean reserves from the 2017 and 2018 crop years later this week.  China is expected to auction around 3 mmt total this year to be replaced with newly imported US beans.

WEATHER

Cooler temperatures and widespread rainfall continue across parts of Minn., Neb., Kansas, and Mo.  Central Illinois will see rains Tuesday evening.  The 6/10 day outlooks show no signs of threatening weather, and most areas now have adequate soil moisture.  Overall dryness is now reduced to 15/18%, as reflected in lower price action, particularly for corn.  Next week favors rainfall over dry parts of Iowa, meaning most everyone will get a drink of water and then some.  

REPORTS

Monthly USDA data found June egg production down 4% YOY, though egg-type chickens hatched were up 6%.  Broiler chick hatchings were down 1% YOY

ANNOUNCEMENTS

Brazil's July bean exports are expected to reach 8.8 mmt based on shipping line-up data, up from 6 mmt the same month a year ago.  Brazil's July corn exports are forecast at 5.6 mmt at month's end.  

Argentina grain exporters told Chinese importers that they were asking for "inappropriate" guarantees that crops being shipped from SA were free of coronavirus, according to a letter sent to importers in late June.

The depreciating Brazilian Real vs. a firmer US dollar is keeping farmer input costs at higher levels YOY, despite a marginal strengthening of the Brazilian currency in June, as reported by Mato Grosso Agriculture Statistics agency IMEA.  Operating costs for bean producers rose by 2.8% in June to R$3,597.37/ha, the sixth consecutive monthly rise.  The real is expected to be at R$5 or above against the US dollar into 2021.

China plans to sell rice and wheat from state reserves to animal feed producers who are struggling with high corn prices, which have soared more than 20% in some areas this year amid tightening supplies.  

CALLS

Calls are as follows:

beans:  1-2 lower

meal:  .30-.60 higher

soyoil:  10-15 lower

corn:  1 higher

wheat:  2 1/2-3 higher

What to look for today?  Wheat closed on a firm note, so would expect further strength from the open that may also lend support to corn.  

OUTSIDE MARKETS

Weaker crude oil which trades down to $41.14/barrel, weaker US dollar at 94.92, and slightly lower equities, down 38 pts.

TECH TALK

• November beans top out at $9.00 and the chart now features a new line of resistance from $9.00-$9.10 that is creating more long liquidation.  Look to continue to back and fill towards the middle of the range at $8.85.  Charts are sideways and becoming more defensive.  Would still continue to own bean dips, however, on corrective price action.    
• Dec. meal prices reach key support at $293.00 but hold firm.  If needing to price would take advantage of the $290.00-$295.00 level to do so.  Unwinding of spread- trade, (buy soyoil/sell meal), should provide some upside.  
• Dec. soyoil nearly placed a new high for the move up at 3105c, (3106c has been the high), also topping out like the bean market at $9.00.  Would look for prices to test 30c but would cover a short, particularly on any break to the lows of 2965c.  
• December corn trade once again tests $3.30 but seems to be stuck.  If short, would perhaps think about taking something off as the trend ADX is very weak, signaling that prices could remain $3.30-$3.40 for now.   
• Sep. wheat futures begin to consolidate its $5.18-$5.35 trading range.  Wheat futures remain well bid after recovering from $5.18

DECEMBER CORN

Prices on the chart remain depressed, with buyers unimpressed and sellers not making headway into the base of support that is $3.30.  Daily indicators are negative, while weekly indicators are still in a positive mode, but trying to turn down.  The inability of the market to "bounce" off its lows speaks to more bearish market behavior, but at this point corn seems to be "stuck" here at the lows that have held since last April.  As such, until prices can take out $3.30 would probably cover something in if short and wait for a better signal that $3.30 support can give way to lower trade.  With the ADX at 17, prices have a better chance of holding for further sideways price action.  

TAGS – Feed Grains, Soy & Oilseeds, Wheat, North America