GOOD MORNING,

Prices are mixed, with soyoil lower and more buy meal/sell soyoil spread trade. After the close yesterday, the EPA announced they would delay the release of biofuel mandate targets.   The White House has delayed an annual process meant to decide how much ethanol and other biofuels US oil refiners need to blend into their fuel each year, as it seeks a solution for an issue that pits refinery workers against corn farmers.  A bipartisan group of US senators introduced legislation Tuesday that would eliminate a national mandate requiring oil refiners to blend corn-based ethanol into their fuel mix, which would hurt corn growers and is likely to face opposition from the farm lobby.

Grains are firmer with wheat prices continuing to trend higher, while corn pushes towards filling its gaps from a few weeks ago.  While there are rumors that China has been inquiring about US wheat, there are no trade confirmations.  Wheat markets consolidates with global growing problems around the world.  First and foremost are Canadian crops, which continue to grow under hot and dry conditions.  Russia's spring wheat areas remain dry.  Russian bread makers are talking about raising prices with producers not sellers for now.  Wheat may see support from next week's North Dakota crop tour.  

Prices continue to define overall trading ranges as bullish and bearish inputs are weighed.  Funds are long and weather waffles in the direction of the bull.  There is some chatter that China has purchased Argentine beans, and the lack of interest in US beans remains negative.  Argentina's corn is also competitive with US values.  However, Argentina continues to have logistics issues with dry weather contributing to extremely low river levels.  Brazil continues to deal with corn crop export cancellations.   

Consumers have limited coverage with more waiting for a larger break, hoping that the corn harvested early in the Delta will cool off the strong basis.  

WEATHER

--Ten days of warm and dry weather is going to be the norm over the northern plains and western Corn Belt.  The 11/15 weather period is more critical, with the potential for some rains.  If the weather remains dry after these 10 days, prices will trade higher on the back of a warm August.  So far, this warmer and drier period, which is actually good for the eastern Corn Belt, is supportive for futures.  

--Global weather sees good EU crop but there are quality concerns due to too much rain.  Russian early wheat harvest yields are disappointing, and Black Sea corn is pollinating under hot and dry conditions.  Frost hit crops in Brazil's south - center, which included impacting sugar cane, coffer, and oranges.  

ANNOUNCEMENTS

Argentina's gov. has urged its citizens to limit water use due to the low river levels on the Parana River, which is at a 77-year low.  

China is expected to sell 23,488  tons of imported corn on July 23.  The imported corn was from Ukraine, stored at a warehouse in Shandong and Guangdong provinces.  

CALLS

Calls are as follows:

beans: 1-3 higher

meal:  3.80-4.20 higher

soyoil:  50-60 lower

corn:  5 1/2-6 1/2 higher

wheat:  6-7 higher

OUTSIDE MARKETS

There is a recovery for crude oil which trades up to $68.32/barrel, while the US dollar trades up to 93.19.  Stocks are up 120 pts. 

TECH TALK

• November bean chart is in consolidation mode with compact trade from $13.70 - $14.15.  Resistance still holds on rallies into $14.15/$14.20, but if we go there again, would expect new highs, as the major path of the chart price action is higher.  Would still prefer to own pullbacks though the ADX is showing a weak trend at 18.  Could also straddle/strangle this market but would prefer an upside exit from an options position, and think we go above $14.30 in time.  
• December meal tracks higher, with spread trade sending prices back into key resistance from $375.00 to $377.00.   Look for pullbacks to now see support as the chart has become more constructive with better support lines underneath.  
• December soyoil is sideways from its sell-off, trading back to 63c once again. At this point the chart appears more vulnerable to an even larger correction, and any trade under 62c finds air until we reach 59/60c.  Despite its setback, would still be in the market to purchase or price on pullbacks of size, given this market's ability to bounce from its lows.  
• December corn finally all but fills its gap at $5.73 1/2 with a trade up to $5.72 1/4 this morning.  The chart is building better support underneath, which may be enough to trade over the gap and towards the $5.80 level.  So far, the trading range has moved up to $5.45, with what appears to be a $5.75/$5.80 high.  
• December wheat prices continue to build gains over the $7.00 level.  The turn higher from lower over the previous trading range above $7.00 finds prices moving up and away from this benchmark.  The chart appears to have unfinished business on the upside, and would look for the bid in the market to remain with a probable test of recent highs of $7.25 / $7.26 3/4.  Targets over the market $7.35 first, and $7.50 on further gains. Would refrain from being short until Dec. wheat can break and settle under $7.00.

DECEMBER WHEAT

The major trend is higher as prices continue to hold above the key support levels of $6.95 - $7.03.  Given the recent strength would look for prices to likely test major trendline resistance which crosses at this week's spike high at $7.26 3/4.  Would look to continue to now own pullbacks due to bullish fundamentals and chart strength.  The recent new highs were not met with any key reversal signal.  Prices could continue to test highs from $7.25/$7.30, as the market remains well bid, and the chart begins what appears to be a new minor trendline support from $7.03 to $7.10.

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