GOOD MORNING,

1. Inter-market spread activity continues as funds buy beans and sell grains.  US beans are a good buy for the moment, and China has been busy this week.  
2. World vegoils are firming up as countries come out of lock-down, with China and India resuming its purchases of palm oil.  Soyoil trades higher following 2% gains in palm oil trade overnight.  
3. Crude helps all commodities in general as it continues to see short-covering on the prospect for further world cuts.   News-wires are reporting that Russia and OPEC's Saudi Arabia have come to an agreement to extend oil production cuts by another month.  
4. Corn prices weaken overnight as weather remains benign.   EIA report will be released today for corn, with ethanol production estimated higher on the back of the country getting re-opened.   
5. July contract rolls begin on Friday, and open interest could climb in Nov beans and Dec corn and skip the middle months.  

WEATHER

--6/10-day and 8/14-day outlooks feature average to above average precip.  The heat that will build throughout the Midwest this week could actually help crops that got off to a slow start via cold and wet weather.  In the Delta, drier weather is helping planting and growing weather.  Isolated showers will be noted in the Delta later in the week.  Net drying conditions still are called for in the plains which will have to be monitored.  Tropical storm Cristobal is forecast to make landfall this weekend in Louisiana.

ANNOUNCEMENTS

Brazil's 19/20 wheat planting progress was estimated by Deral at 75% complete vs. 68% yr ago.  

APK-Inform said that wheat export prices from Ukraine have risen by $3-$4 /mt over the last week, on expectation of lower 20/21 harvest.  

China's National Grain and Oils Information center forecast soy imports at 91 mln tons vs. 82.5 mln tns for 18/19, with 20/21 soy rising to 92 mln tns.  

CALLS

Calls are as follows:

beans:  3 1/2-4 1/2 higher

meal:  .80-1.00 higher

soyoil:  10-14 higher

corn:  2 -2 1/2 lower

wheat:  2-3 higher

OUTSIDE MARKETS

Feature a continuing firm stock market, which is up 175 pts, as crude oil firms to new highs for the move up at $37.88/barrel.  Traders continue to unwind previous buy the US dollar/sell energies trade. 

TECH TALK

• July corn trades down towards $3.20 to attempt to see if it represents value and the low end of the recent trading range.    Resistance lines are building from $3.25-$3.28, with first support at the 20-day ma of $3.22, and channel support at $3.18.  If short, would get something covered in on a dip under $3.20, as so far prices have not been able to sustain weakness on a dip underneath.  
• July bean charts appear constructive, with a good bid under the market as prices advance towards recent highs from $8.55/$8.62.  Trade above $8.55 signals a price target of $8.62, and beyond that $8.70.  Major direction is sideways/higher, and pullbacks have been met with good buying activity.  
• July soyoil trades above 28c to match previous chart highs of 2814c.  If long would probably look to book a profit above 28c, as the market tends to also shed 50 pts or so before continuing its move higher.  However, funds are long soyoil, the major direction is higher, and therefore prices could eventually trade towards 2890c and close an old gap.  
• The overall direction for July meal is still lower, with prices hitting the 50-day moving average of $286.00 without the ability to trade above it.  A final target low on one more push lower attempts to target $280.00, where very good support emerges.  
• July wheat charts test key support at $5.06 and find some buying interest/short-covering at this level.  Any push under $5.00 would negate an inverted head and shoulders and imply that new lows could be targeted closer to $4.90.  At this point, would expect a pullback towards $5.05 to see more support and to probably hold for a push up into the $5.15/$5.20 level of resistance. 

NOVEMBER BEANS

Major direction has been sideways to higher, with support building under the market from $8.37-$8.40.  Key resistance is $8.65, but the market has been able to trade above the 20- and 50-day moving average of $8.51 and $8.55, respectively.  The major trade is within a slight up-trend channel, which gives the market a bid, and prices matched previous tops at $8.65.  If long and the market trades over $8.65, would hold on for a likely increase towards the next key level of resistance which is from $8.70, with a top at $8.80.  If short, would probably cover on a break to $8.52/$8.55 should we go there, as price action still is in a slight up-trend channel.  Would look for the possibility of an $8.50-$8.70/$8.80 range to form.  

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