GOOD MORNING,

Prices are higher this morning as we begin a new month.  The Commitment-of-Traders report finds that funds did not do much adjusting to their positions and remain net long for everything.  May beans gap higher overnight on continuing dry weather in Argentina, while China's Dalian Exchange futures which hit a record high on Monday on tight supply.  Soyoil is higher following crude and canola. Wheat prices are firm following world values, with Russian export prices rising for the second consecutive week.   Matif wheat and corn prices are higher supporting US commodities.

Inflows to commodities continue as traders look at inflation ahead.  Despite higher short-term bond yields there is still talk from the central banks that interest rates may not go higher. Prices will begin to trend in trading ranges into the March 9 USDA report, with the largest market mover that of the Planting Intentions report at the end of the month.  

WEATHER

--Argentina weather remains dry, and thus bullish.  Weather remains dry over the next 10 days.  Rain potential may increase after March 12 in areas but confidence in the report is low. Southern Brazil dryness will be eased this week with rain potential over the next 10 days.  Harvest in central and northern areas but nuisance rains continue. 

--The US 6/10 day outlook for the Midwest is warm and wet, with the southwest warm and dry.  

REPORTS

Commitment-of-Traders report as of Feb disaggregated futures / options combined:

Beans:  net long 172.3K

Meal:  net long 69.4K

Soyoil: net long 112.6K

Corn:  net long 361.1K

Wheat: net long 29.6K

The market length continues to keep the uptrend intact, but also makes prices more vulnerable to a break where length is excessive, such as in soyoil. 

ANNOUNCEMENTS

Brazil's IMEA estimated Mato Grosso harvest at 52.1% vs. 34.5% week ago, and vs. 84% year ago and vs. 79.8% average for this time of the year.  Safrinha corn planting in Mato Grosso reached 54.6% vs. 35.9% week ago and vs. 91.9% year ago.  

Brazil's AgRural forecast the overall Safrinha corn crop at 39% planted vs. 24% week ago, but still lagging the 67% pace year ago.

Safras reported Brazil's total bean harvest is estimated at 22.5% vs. 12.4% week ago and vs. 39.6% year ago, 35% average. 

Malaysia will cull 3,000 wild and domestic pigs after an outbreak of African Swine Fever in wild boar and backyard pigs in the state of Sabah on Borneo island was discovered in mid-Feb.  The disease was detected in at least 300 pigs in 3 districts, Pitas, Kota Marudu, and Beluran, after a reported case involving the death of a wild boar a month ago. 

DELIVERIES

meal:  6

soyoil: 47

HRW wheat:  1,288

CALLS

Calls are as follows:

beans:  8-11 higher

meal:  3.50-3.90 higher

soyoil:  20-25 higher

corn:  steady

wheat:  2 1/2-3 1/2 higher 

canola:  3.80-4.00 higher

OUTSIDE MARKETS

The US dollar is firming into new highs at 91.12, with crude at $62.92/barrel.  Stocks are higher, up over 300 pts.  Global equities are higher this morning. 

TECH TALK

• May beans gap higher from $14.08 in the PM session heading back into the swing point of $14.25.  There is now a small open gap from $14.08 to $14.11, which if left unfilled will find prices rallying further from the open.  The chart builds a good case for $13.80 as a trading range low that will hold heading into the USDA report March 9, with solid resistance at the ctr highs of $14.45 3/4.  It remains impressive that prices are back over $14.00, and therefore shows the strength of this market.  Could look for $14.00-$14.50 trade for the week, using $14.25 as a pivot point.  
• May soyoil posts a new contract high at 5095c, and the chart here also is very constructive, suggesting that prices could target 51c with a trading range low at 4850c.  Prices do begin the day on the defensive, however, with most of the night session gains lost.  Pullbacks towards 4950c probably finds support and new contract highs eventually.   
• May meal broke to new lows below $420.00 at 415.00, but quickly rejected those values for a pop higher, back in the $420.00-$440.00 trading range.  Would still look for $425.00 to $429.00 be good resistance, and for price congestion to occur from $418.00-$435.00 for a mini-range.  May corn gapped higher overnight as prices approach trendline resistance which is $5.56/$5.57.   Trendline support is still under the market at $5.40 and would expect that we see another line of support should we trade there.  
• Dec corn finds major support at $4.65, so any violation of this break-out level will trigger more selling.  Dec. corn trading range is now from $4.65-$4.79, new ctr highs, and would price, cover a short, or go long until the chart can break this key level of support.  
• May wheat has best support at $6.53 but continues to hold up well on the rally for a $6.50-$6.75 mini-trading range.  Would not be surprised to see May wheat test $6.53 which is one current low before the rally back over $6.80.  The ADX for wheat remains low at 14, keeping the major trade sideways, which one can straddle or strangle.

NOVEMBER BEANS

Major direction is higher with prices defining a trading range at higher levels from $12.00 to ctr highs at $12.52 3/4.  The price action is strong and two constructive formations are guiding it, namely a wide uptrend channel and an ascending triangle as well.  Prices broke lower to test $12.00, but did not break down.  Expect the market to therefore be able to possibly trend towards ctr highs again, and to swing around the $12.25 level which may become a point of equilibrium.  The ADX is slightly weak at 24, with slightly overbought conditions.  The chart is building a case that $12.00 is a low for a market ready to move higher.  The trend is up, so have to price, go long, and quickly cover a short.  Target highs and best resistance over the market now is at the crossing lines at the top of the chart close to $13.00.  The positive formations and trendlines under the market increases the chance that in time we go there for what could be a $12.00-$13.00 trading range.

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