GOOD MORNING,

Prices are lower on the back of good weather and continued worries over China/US trade relations.  Nearby bean and corn spreads remain well bid, though the domestic bean basis has weakened somewhat.  Oilshare trades lower on the back of weaker energies and palm.

We are approaching the end of the month, which brings with it more acreage and stock estimates in front of the June report next Tuesday at 11:00.  On its own, weather remains for the most part bearish, offering up just enough for the bears to claim victory.  In the corn camp, there are still plenty of bears around without much reason to cover until charts cross key resistance lines.  

Beans continue to see bull-spreads firm on the back of export chatter.  The Brazilian farmer is not a seller lately of beans as the Real has strengthened 6% this month.  This morning the US dollar is higher, and the Real has started to weaken once again.  

As to deliveries for first notice day, there are no corn or bean receipts, 11 Chicago wheat, 511 meal, and 3,495 soyoil.  

WEATHER

Bottom line is weather remains bearish as 80% of the Midwest receives rainfall this week.  Adequate to surplus soil moisture should help crop growth.  Showers have returned to the Delta, maintaining adequate soil moisture supplies, with showers continuing into the weekend.  6/10 day calls for temperatures to be above normal through next Monday with wet conditions.  

REPORTS

Export sales:

Beans:  19/20 net 601,900 mt and 20/21 net 560,700 mt (vs. an expected 800 mt to 1.9 mt)

Meal:    19/20 net 70,200 mt and 20/21 net 12,000 mt (vs. an expected 100-300 mt)

Soyoil:  19/20 net 20,500 mt  (vs. an expected 5-35 mt)

Corn:     19/20 net 461,700 mt and 20/21 net 77,000 mt  (vs. an expected 400-1.1 mt)

Wheat:  20/21 net 518,700 mt (vs. an expected 250-650 mt)

No major eye openers in the report, with low export sales in meal and neutral sales in beans.  China bought one cargo of old crop corn, 1 cargo of sorghum switched from unknown, 173 kmt old crop beans and 383 kmt new crop beans.  Sales report was mundane and China buying nothing to write home about.

Wheat:  high end with rising premiums overseas

Corn:  poor with SA and Ukraine eating up demand

Beans: disappointing sales

Meal:  poor

Soyoil:  moderate 

ANNOUNCEMENTS

The BA Exchange forecasts Argentine bean exports this year at 8.5 mmt vs. 10.3 mmt the prev. crop cycle with overall production at 49.6 mmt.  The USDA has exports at 9.0 mmt and production at 50.0 mmt.   

Ukraine's economy ministry has proposed setting the limit for wheat exports at 17.2 mmt for the 20/21 season that starts on July 1.  

Some US oil refiners are looking into ways to produce renewable diesel as a means of offsetting some compliance costs.  

CALLS

Calls are as follows:

beans:  2 1/2-3 lower

meal:  .30-.40 lower

soyoil:  20-25 lower

corn:  2 1/2-3 lower

wheat:  mixed/lower

OUTSIDE MARKETS

Weaker with crude oil trading down to $37.13/barrel and equities off 218 pts.  The US dollar is firmer trading up to 97.59.  

TECH TALK

• November beans begin the day at the bottom of the recent range with trendline support at $8.63/$8.65 on a slight dip.  The market has been trapped in the same range, but the series of highs at the top at $8.80 present stronger resistance than the three dips to support at the lows.    Any dip below $8.62 finds the market heading back towards the 50-day moving average of $8.58, which is a good place to cover a short or price something.   
• December soyoil trading range is from 27c-2950c, with the 50-day moving average crossing below the market at 2790c.  A line of resistance was created at the top of the chart from 2915c-2950c, and prices are now looking for a place to stabilize.  Would wait for a drop to 2790c-28c before covering a short or trying the long side.   
• Sep. corn turns negative today, turning lower from sideways and moving under the 50-day moving average of $3.28.  Momentum now turns lower increasing a test of major support from $3.20/$3.21.  
• Sep. wheat attempts to find a bottom from $4.81-$$5.15 trading range, but the slight bump towards $4.93 failed to generate more short-covering which increases the chance of another test of $4.81 again.  A break of $4.80 will find trendline support close by at $4.77.  

DECEMBER MEAL

Overall trading range is from $301.00 at the top and $290.00 at the bottom.  The major trend is sideways which leads one to be able to straddle or strangle this range, as it has been in place since last April.  In the big picture, rallies continue to fail and prices are now closing in on the lowest end of price action.  The trend is weak with an ADX reading of only 16, meaning that follow-through at the top and bottom is not very strong.   Dec meal prices congest from $292.00-$295.00, with any drop under $292.00 paving the way for a test of key lower support at $290.00.

The market is now appearing to congest in a triangle pattern on a drop under $295.00, with converging moving averages located there.   Trendline support for the day is located at $292.00, so any dip below turns momentum back towards $290.00 once again.  If short, probably want to take something off as prices have little downside follow-through.  But the chart pattern does suggest that prices could break down once more to the $290.00 level at some point, as price action generally exits triangle patterns in the same direction they entered them, which in this case is lower.

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