World Perspectives
feed-grains

AM Outlook - Demand Day

GOOD MORNING,

Prices were higher at the start of the PM session with beans and soyoil in the lead to the upside.  Global vegoil prices remain lock-step in the plus column as energies work to new highs.  Canola prices are once again sharply higher on poor Canadian weather. Matif/Canada rapeseed futures are higher.   Beans pop to the upside with meal prices still struggling.  Wheat is still in the process of price congestion, but hasn't given up on its bull flag formation yet.  Corn is tightly congesting between recent highs and lows.  Corn prices are firmer with Matif futures higher on the slow EU harvest.  Brazil may also be close to being sold out of corn. 

China returns from holiday, and perhaps they are in the buying mode, with chatter that inquiries have been made, particularly for corn. The US and China will be holding trade talks, as China remains well behind on what they have agreed to purchase via the Phase One trade deal.  Gulf loadings are improving, now estimated to be 90% of normal mid-month, which could entice China to begin to purchasing more.   

Demand remains somewhat behind, though export sales yesterday were good.  Total weekly export sales were double what was expected in corn, with beans also at the top end of ranges.  Wheat, on the other hand, is expensive now vs. other origins, so could be part of the reason for the lag in price action lately.  

US domestic margins are very good, and therefore domestic buyers are beginning to bid up the market as they are struggling to purchase new crop supplies.  US crush firms to new highs.  

WEATHER

--Areas of the Midwest continue to see showers in the eastern Corn Belt.  The 6/10 day and 8/14 day outlook features well above normal temperatures with precip events continuing.  A rain event will move down from Canada across the northern plains this weekend, and there could be additional coverage in parts of the central and eastern belt.  This system could move into the southern plains early in the week, with a second system coming into the plains and western Corn Belt as the ECB dries down.  

--Brazil's weather remains beneficial, with Argentina too dry and cold.  NOAA continues to show the threat of a La Nina event in SA, particularly for Argentina and southern Brazil.

ANNOUNCEMENTS

Brazil's bean crush for August totaled 3.3 mmt, down 3.3% from August 2020, while Jan-Aug crush totaled 26.6 mmt, down 1.5% according to Abiove.  The reduced crush is attributed to the gov. lowering its biodiesel blend mandate from 13% to 10%.

CALLS

Calls are as follows:

beans:  8-10 higher

meal:  .40-.80 higher

soyoil:  40-60 pts higher

corn:  1 1/2-2 higher

wheat:  2 1/2-3 higher

OUTSIDE MARKETS

Firmer crude which trades up to $79.50/barrel, and a firmer US dollar at 94.25.   Stocks are 20 pts higher.

TECH TALK

  • November bean prices work higher and over recent tops at $12.50/$12.55.  The turn higher from lower may be enough to invite further pre-report short-covering.  If pullbacks can hold, would look for further upside towards $12.65/$12.70.  
  • Dec soyoil strength is the feature here today, as prices pop into new highs on continued fund buying and chart strength.  As noted before, the Dec. soyoil break-out level was 60c, and bull markets usually walk back once they have made a new high to test break-out levels.  The 60c level held and now the market works to new highs over 6250c.  Look for the possibility of moving the bottom of the trading range up from 55c to 58c for a 58c-64c trading range.  
  • December meal prices fell to a new low of $319.00 on continued buy soyoil/sell meal trade.  Trendline support is now at $315.00 given the break-down to further new lows.  The meal market is oversold at 27% RSI, but can drive into an 18% oversold situation before it has to correct.  Top of the meal market now falls to $325.00 as meal prices trend down.  In the meal bears favor, the ADX for meal is strengthening at 19, meaning rallies will continue to be selling opportunities.
  • December corn prices continue to work sideways in the same vicinity from $5.27-$5.48.  Resistance looks stronger than support, as the market has had a tendency to break its bid as of late and head lower.  The 100-day moving average is $5.17, and for now would expect $5.15-$5.20 to be a strong base of support should we go there.  
  • December wheat makes a new low for its bull flag formation at $7.38, and would need for prices to break $7.30 to negate the positives of such a chart formation.  Markets can enter into 1-2 weeks of price congestion before resuming a prior uptrend.  Would look for prices to remain congested between $7.30-$7.60, with the only item fighting higher prices a weak ADX trend reading of 15.

NOVEMBER BEANS

The lows of $12.31 have been established now for one week, and though it is not enough to say that seasonally we have posted the bottom it is a good start.  The chart is still showing a weak trend of 15 ADX, meaning we are probably going to go sideways for a bit into the October report next week.  Would look for prices to perhaps trend towards the 200 day moving average of $12.80//$12.83, but think given the recent low this is now the established top of the market.  Given the structural weakness and new lows, the rally may not even get to $12.80, finding resistance at $12.65/$12.70.  

WPI on Twitter

Related Articles

Political Risk to Agribusiness

The Biden Administration and others have already shown their animosity toward Big Ag. Heading into 2024 the hate may grow larger. The President’s reelection campaign, and that of the Democratic Party, is threatened by voter dissatisfaction with the economy. Specifically, they are upset ab...

feed-grains soy-oilseeds wheat

Market Commentary: Fewer Bears Ahead of WASDE

Confidence in short positions was slightly challenged today as traders positioned ahead of tomorrow’s USDA December WASDE. January soybeans jumped back 16.25 cents today, though not enough to offset a string of earlier double-digit losses. Thus far this week, January soybeans are down 13...

feed-grains soy-oilseeds wheat

Summary of Futures

Mar 24 Corn closed at $4.88/bushel, up $0.0375 from yesterday's close.  Mar 24 Wheat closed at $6.4225/bushel, up $0.0875 from yesterday's close.  Jan 24 Soybeans closed at $13.1175/bushel, up $0.1625 from yesterday's close.  Jan 24 Soymeal closed at $406.8/short ton, down $1.7 f...

Political Risk to Agribusiness

The Biden Administration and others have already shown their animosity toward Big Ag. Heading into 2024 the hate may grow larger. The President’s reelection campaign, and that of the Democratic Party, is threatened by voter dissatisfaction with the economy. Specifically, they are upset ab...

feed-grains soy-oilseeds wheat

Market Commentary: Fewer Bears Ahead of WASDE

Confidence in short positions was slightly challenged today as traders positioned ahead of tomorrow’s USDA December WASDE. January soybeans jumped back 16.25 cents today, though not enough to offset a string of earlier double-digit losses. Thus far this week, January soybeans are down 13...

feed-grains soy-oilseeds wheat

Summary of Futures

Mar 24 Corn closed at $4.88/bushel, up $0.0375 from yesterday's close.  Mar 24 Wheat closed at $6.4225/bushel, up $0.0875 from yesterday's close.  Jan 24 Soybeans closed at $13.1175/bushel, up $0.1625 from yesterday's close.  Jan 24 Soymeal closed at $406.8/short ton, down $1.7 f...

feed-grains wheat soy-oilseeds

Export Sales

Export Sales and Shipments for November 24-30, 2023. Wheat:  Net sales of 356,400 metric tons (MT) for 2023/2024 were down 43 percent from the previous week, but up 8 percent from the prior 4-week average. Export shipments of 198,900 MT were down 42 percent from the previous week and 27 pe...

Image
From WPI Consulting

Accountability and a comprehensive approach to export programming

WPI’s team helped construct a strategic approach to develop, implement, and track promotional activities in 8 key regions across the globe for an agricultural export association. With continued progress measurement and strategic advisory services from WPI, the association has seen its ROI from investments in promotional programming increase by 44 percent over the past 5 years. Not only does this type of holistic approach to organizational strategy provide measurable results to track and analyze, it fosters top-down and bottom-up organizational accountability.

Search World Perspectives

Sign In to World Perspectives

Don’t have an account yet? Sign Up