GOOD MORNING,

The charts continue to throw off bullish technical signals, so the funds are buying the open and running with it.  The continuing reports of Chinese business has its corollary year based in 2016, also a very big bean buying year that saw the bean/corn ratio strengthen throughout the fall into December.  The ratio, which traded over 3.1:1 that year, did not correct until Jan. 2017, when Brazil's production seemed to be big.  China continues to buy beans and corn as it hits the perfect storm of a corn stocks depletion on the back of adverse weather, as well as rebuilding its pig herd which was decimated by ASF.

This year, harvest supplies are in question as undoubtedly big purchases of beans continue to cross the wires.  Beans surge again to new ctr highs with soyoil, corn and wheat prices along for the ride.  By contrast, equities seem to have trouble stabilizing.  The weaker US dollar is export friendly, while an impending election makes equities uncertain.  Macro markets remain behind the scenes with the continuing trend of a weaker US dollar price friendly for Ags, at the same time China is needing to buy commodities for re-stocking.  The weaker US dollar continues to also be price friendly for commodities in general.

President Trump touted a new $13 bln round of farmer assistance to cope with the impact of the pandemic.  The USDA will release details about the program today, and farmers could begin to apply for aid as early as next week. 

WEATHER

Harvest weather continues to be good across the heart of the Midwest.  The southeast continues to see heavy rains from now tropical depression Sally. Globally, concerns are mounting with dryness for SA.  While Brazil's planting season will begin late due to overall dryness, Argentina is also trending too dry. 

ANNOUNCEMENTS

Brazil purchased Argentina soyoil over the past few weeks marking the first time in two years that the world's largest bean producer and exporter has had to buy in bulk from its neighbor, according to Agricensus.  The move came after Brazil ran dry of beans, causing a lack of domestic oil supply with around 60-70,000 mt of Argentina soy oil purchased by Brazilian importers over the past two weeks.  While it is not unusual for Brazil to purchase soyoil from Argentina, the timing and size is, as described by one analyst.

China is set to auction 20,000 mt of frozen pork from state stockpiles.  The gov. has sold over 550,000 mt of frozen pork from state reserves so far this year. 

Ukraine exported 10.33 mmt of grain for July 2020-June 2021 vs. 11.5 mmt year ago, according to the economy ministry.  Wheat sales are 7 mmt vs. the same amount year ago. 

Argentina's Rosario grains exchange forecast that 17.3 mln hectares of soy would be planted for 20/21, only 100,000 hectares vs. year ago, with a projected harvest of 50 mmt.

CALLS

Calls are as follows:

beans:  6-9 higher

meal:  2.00-2.50 higher

soyoil:  25-30 higher

corn:  1 1/2-2 higher

wheat:  3 1/2-4 higher

OUTSIDE MARKETS

A higher crude to $41.18/barrel, and a weaker US dollar to 92.81.  Equities trade softer, looking to end this week on a down-note.  Stocks are down 37 pts.

TECH TALK

• November beans post new highs after continuing to throw off positive tech signals, such as Wednesday’s outside day closing higher, which nearly always sees follow-through.  Ditto that for Thursday, and November beans have arrived at new contract highs, and overbought conditions along with it. 
• Dec meal charts are also net positive with a new ctr high at $339.70.  Pullbacks have been buying opportunities, with the market bumping up good support to $318.00 from $313.00.  There have been many positive technical signals in this market, starting with its key reversal established at $286.20 contract lows and bull flag formations. 
• December soyoil lagged the pace Thursday, but higher palm helped soyoil to get over the hump and trade to new highs over the 35c benchmark at 3549c.  Like the other markets, there have been many positive signals here as well with the latest a break-out higher over a pennant formation which foreshadowed today's higher prices. 
• December corn targets $3.80 as the strong uptrend continues unabated.  New upper target highs are now $3.88/$3.90. 
• December wheat rallies to its previous trading range high following bean strength, and back to key resistance at $5.65.  Upper trendline resistance targets $5.70/$5.75 should the rally continue.  The ADX trend is the least impressive for this market, but still trading over the 25 level with a reading of 30.

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