GOOD MORNING

Prices are lower on profit-taking heading into the Thanksgiving holiday, even though good demand and adverse weather continues.  As to demand; corn exports are ahead of last year's pace by 143 mln bu vs. 132 mln bu week ago, with beans ahead by 368 mln bu vs. 358 week ago.  Wheat continues to struggle on rallies with Russia's world wheat values falling as demand slows, and wheat exports just slightly ahead of last year as compared to corn or beans.  Matif wheat and corn values are lower this morning.   

Funds are now long an estimated 300K contracts of corn, 250K beans, and even wheat, and length is creating today's down-draft.  Each of the markets need some sort of pullback, particularly beans and soyoil since they are overbought.  The major direction remains higher, and the mission of the market today is to find value level lows.  Each of the markets has broken to some key support levels that are at trendline, so taking out the morning lows would begin to show more chart vulnerability.  However, if short would probably take something off the table as these have been strong markets and pullbacks in front of a holiday are buying opportunities. 

WEATHER

--Argentina and Brazil continue to be overall in a concerning dry pattern, with light weekend totals.  Limited coverage is noted for northern Brazil and western and southern areas of Argentina though some precip was noted here.  Argentina will see chances for rainfall over the next two weeks, but Brazil's Mato Grosso areas stretching into Sao Paulo remain dry.  Rains are now 7-10 days out and major concerns are still in play.

REPORTS

Crop Progress

Wheat:  conditions down 3% WOW, with HRW down 5% but SRW up 3%

Winter Wheat: emergence 89%, vs. 86% year ago and vs. the 5-year ave of 88%.  Conditions 3% lower at 43% g/e.  

HRW down 5% at 33% g/e, Colorado and Oklahoma down 7-8%, Texas down 6%, Kansas down 3%.  .

SRW up 2% to 67% g/e, Michigan up 10%, Ill., and Ark. each improved 4%, Mo., down 3%

ANNOUNCEMENTS

China's bean crush was another 2.1 mmt last week, and is around 37% higher than yr ago, as forecast by a senior analyst in an Asian commodity company.  Though crushing volumes are high, meal stocks are unchanged and bean soyoil has fallen, as soyoil seems to be a substitution for palm and rapeseed oil.  

Russia's SovEcon forecasts Russian wheat exports at 4.4 mmt, and since the start of its marketing year has exported roughly 16.1 mmt of wheat July 1 - October.  

Ukraine has used 67% of the 20/21 wheat export quota, shipping 11.6 mmt of the commodity for the July-June season.  Grain traders and the gov. have agreed that the volume of wheat available for export this season must not exceed 17.5 mmt.  Ukraine exported 20.5 mmt of what in the 19/20 season.  

Brazil's economic ministry estimated Nov bean exports were averaging 88,700 mt /day, down from 103,900 mt/day last week, and vs. daily volumes year ago at 247,400 mt.   Corn exports for the same time period were 249,700 mt vs. 205,500 mt year ago.

CALLS

Calls are as follows:

beans:  11-13 lower

meal:  .30-.60 lower

soyoil:  50-60 lower

corn:  5 1/2-6 1/2 lower

wheat:  1/2-1 lower

OUTSIDE MARKETS

Quite positive with the S%P and NASDAQ higher, while the Dow rallies over 300 pts.  Crude oil is at the best level since the start of the pandemic trading to $43.75/barrel, while gold prices fall to $1809.30/oz.  

TECH TALK

• Jan beans break to trendline support which is located at the PM lows of $11.74.  Any push through $11.74 does not find much support until prices reach $11.65, but if we go there would cover a short or try the long side of the market.  Prices are still trying to find a trading range from contract highs.  
• The major direction for Jan meal has been higher, with a series of tops at the peak of the market crossing at $399.00.  The upper trading range is now from triple lows of $385.00 up to $399.00, so any close under $385.00 is going to open the door to further downside.  Best support for Jan meal is the 20-day moving average at $384.00, and would cover a partial short and wait and see if we go there.  
• Jan soyoil chart appears to have set a temporary top and is in correction mode from ctr highs of 3902c. The morning low of 3727c is at a cycle low, so any close under this level would promote another 50 pt. sell-off.  Would look at this point to likely stay in a 37c-39c trading range.  
• March wheat is in a trading range from $5.90 to $6.20, but the major direction here has been a steady sideways to lower path.  
• Dec corn chart looks more negative, breaking trendline support at $4.20, and filling a small open gap at $4.16 3/4.  Staying above the gap suggests that prices will now begin to define a sideways range from the peak high of $4.29 3/4, but the break-down below $4.20 makes it vulnerable to still lower values, with a trading range low of $4.10.  March corn configures the same way, backing away from double ctr high of $4.35 3/4, but should find support at the $4.22 level, where current rally tops should provide support.  

JANUARY BEANS

The market is in back and fill territory attempting to define a value trading range from the ctr high of $12.00.  Conditions remain overbought at 78%, still in need of further house-cleaning.  For the day trendline support is located at $11.75,(as shown by the bottom blue line on the chart), and the absolute bottom of the range should this level be violated would be $11.61, the low of the last break.  It may take a harder break to get the market back to a more balanced relative strength index of 50%.  However, this is still a bull market, and even though prices are lower the overall direction remains higher.  Would still look for $11.65-$12.00 to begin to define a trading range heading into next week.

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