GOOD MORNING,
Prices remain well bid overnight with higher oilshare again dominating price action and beans climbing over corn. Crush continues to struggle, with oilshare still supported on biofuel demand. Spreads and flat price all recover in overnight action. Wheat is up the least, with Egypt's tender drawing the lowest offer from Russia, without a purchase as of yet. Beans are higher on the back of the last March 31 report, even though Brazil bean export prices continue lower on the lack of Chinese purchases.
The next set of data will come from the April 9 WASDE report, and for now it appears that prices will climb in front of what is expected to be a friendly data. Traders wonder if USDA will cut South American corn production, or bean ending stocks. Numbers are already tight, basis is firm, and prices continue to build on recent gains. Traders are looking for China to possibly increase their corn imports, and increase US exports by around 150-200 mln bu, which should lower the corn carry-out.
WEATHER
--Argentina will see a developing pattern of rainfall that could slow harvest. Brazil's weather is mostly dry.
--US weather features more rainfall in the Midwest with heavier totals in the western corn belt and Delta that could slow early planting. Above normal temps will be the norm with drier conditions by the weekend. MOisture returns to the southern half of the belt in the 8/14 day outlook. Rains are now called for in Minn. and in the Southeast. The 6/10 day forecast calls for normal temperatures and rainfall.
REPORTS
Crop Progress:
Corn: 2% planted vs. 2% year ago, and 2% average.
Winter Wheat: 53% good/excellent, 4% headed vs. 3% year ago, and 3% average
Spring Wheat: 3% planted vs. 3% year ago, and 2% average
ANNOUNCEMENTS
Brazil's AgRurual reported that harvest had reached 78% as of April 1 vs. 83% year ago, and 78% average.
Strategie Grains lowered its forecast for 2021 rapeseed harvest for the 27 nation EU for the second month in a row, and projected supply would tighten next season. Rapeseed harvest was reduced to 16.8 mmt from 17.05 mmt a month ago.
Sri Lanka banned imports of palm oil and new palm plantations, and told producers to uproot existing plantations in a phased manner, which came as a surprise for the edible oil industry.
A Ukraine mill group noted March wheat flour exports were at their lowest level in the past 10 years with only 4,016 mt shipped in March, attributing the decline to the high cost of wheat.
CALLS
Calls are as follows:
beans: 14-17 higher
meal: 4.50-5.00 higher
soyoil: 90-95 higher
corn: 5 1/2-6 1/2 higher
wheat: 2 1/2-3 1/2 higher
OUTSIDE MARKETS
Crude oil trading higher to $60.34/barrel, the US dollar firming to 92.78, and stocks 40 pts. lower.
TECH TALK
- May corn congests from $$5.50 to the new ctr high at $5.85. Despite its inability to hold its gains from the report last week, the presence of a new ctr high does suggest that prices can retrace upward. So far, corn is placing an inside day of trade, but think that the market may congest from $5.55-$5.60 again for another run at the newest high. The trend is weak, but funds are long and will defend.
- May wheat prices form a new line of defense at the bottom of the chart, just as funds get short. Double lows are now at $6.00, with very strong resistance at $6.32 in the form of the 100-day moving average and trendline resistance meeting here. Look to stay on the sideways path, and if long would think about exiting should we go there on the upside.
- May beans walk back and test $14.00 one more time to see if it is truly supported in a market that could work upward. Prices are again back at the pivot point of $14.25-$14.30 in a $14.00-$14.60 market. November beans firm from $12.70, and could easily challenge the peak high of $12.85. Primary direction is higher, and fundamentals are backing.
- May meal prices once again are pushed towards the lower end of recent range activity, but the upside exit over $405.00 is still positive. Would look for meal to return towards its low but remain supported.
- May soyoil prices are still on the up and up, now over critical resistance tops at 5315c. Look for a further likely advance towards a 52c-56c trading range once more. Would still look to own soyoil on pullbacks, as the downside abrupt correction from the high now appears to be over.
MAY MEAL
Prices trade from current lows of $400.00 up to recent highs of $433.70. The high trade did not stick, with a quick return towards the lower end of the range and back under key moving averages. However, the chart has built a case which suggests that $395.00-$400.00 is a base of trade, with prices now stuck between current lows of $400.00 to the 50-day moving average prices at $417.00. If needing to price, a break towards $400.00 now is a good place to begin, and if prices are back over $411.00 be more aggressive as it is the 100-day moving average. In all likelihood look for a $400.00-$420.00 trading range into the report Friday.
TAGS – Feed Grains, Soy & Oilseeds, Wheat, North America
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