GOOD MORNING,

Prices are higher across the board this morning as positive technical price action continues and the bull market rolls on.  Beans, meal, and corn hit new trading range highs for the move up, as it is clear that traders expect a bullish report.   The Sep. WASDE is out at 11:00 central time, but the focus after will be on harvest and demand.  Adding to bullish rhetoric was a Bloomberg article in which a trader stated that China may have to import 30 mmt of corn next year to replenish stocks.                                                                                                                                                                                                          

WEATHER

Wetter risks for the Midwest for the 8/14-day outlook which could slow early harvest in soy and corn areas.  There is a tropical threat for the 11/15 day of the southeast, but confidence is low. Weather over the next two weeks looks ideal for harvest.

REPORTS

Export sales:  

beans: 19/20 net 170,200 mt and 20/21 net 3.16 mt (vs. an expected 1.0-2.0 mt)

meal:   19/20 net 26,600 mt and 20/21 net 333,000 mt (vs. an expected 225-500 mt)

soyoil:  19/20 net 4,100 mt and 20/21 minus 3,000 mt (vs. an expected 0-35 mt)

corn:  19/20 net minus 63,300 mt and 20/21 net 1.82 mt (vs. an expected 900-1.0 mt)

wheat:  20/21 484,000 mt (vs. an expected 300-600 mt)

Key feature was the outstanding bean sales number, well above the expected.

Wheat:  mid-range sales, routine to strong expected with rising world premiums which makes the US competitive.  China was absent.

Corn:  big sales as expected, with China the primary buyer

Beans:  better-than-expected sales, over the top end.  China accounts for 1.6 and unknown for 926K, with Mexico a large buyer as well

Meal:  better than expected sales as feed demand remains strong.  Large buyers from the Philippines, (also a traditional buyer), Columbia, Panama, and the Dominican Republic

Soyoil:  poor sales as prices are high, but world demand still strong

ANNOUNCEMENTS

Brazil's AgRural forecast 20/21 bean crop at 131 3 mmmt vs. 129.3 mmt in August.  Planted area is to grow 3.25% to 38.1 mln hectares this season starting this month.  Average August sales price of Brazil 20/21 soy at 98.98 reais/60 kg bag (Paranagua port) vs. 91.60 reais /bag the prev. season.   AgRural also estimated that farmers sold 48% of the 20/21 estimated drop and an unprecedented 2.2% of the 21/22 crop.  

Brazil's Guilherme Bastos, president of the country's food supply and statistics agency Conab told Reuters that Brazil should consider temporarily eliminating import tariffs on food staples like beans and corn.  

Brazil slaughtered 12.1 mln hogs for Q2, the highest number since records started being kept in 1997, the gov. agency IBGE reported, citing strong demand from Chinese buyers.  

Argentina's BA Exchange forecast 20/21 wheat crop conditions at 22% G/E, vs. 17% good/excellent week ago.

Ukraine has exported 9.2 mmt of grain so far in the July 2020-June 21 season vs. 10.3 mmt at the same point during the prev. season, as reported by the economy ministry.  

DELIVERIES

beans:  2

meal:  60

soyoil:  227

wheat:  11

CALLS

Calls today are as follows:

beans:  4-6 higher

meal:  1.80-2.00 higher

soyoil:  15-20 higher

corn:  2 1/2-3 higher

wheat:  1-1 1/2 higher

OUTSIDE MARKETS

A stronger Dow, up 136 pts, and a continuing weaker US dollar trading to 93.09.   Crude is at $36.96/barrel.

TECH TALK

• November beans clearly trying to make its way towards the $10.00 level, with a new trading range high of $9.87 1/2 from $9.75 lows.  The market has been systematically moving higher, pullback back 15-20c only to rebound and move up.  Price action is firm as the trend strengthens to an ADX reading of 38.  RSI is overbought at 82%, but in the current trend, must buy big breaks.  
• Dec. meal reinforces support highs with double lows of $313.00 leading to a new high of $320.60 this morning.  This rally does not appear to be complete either, as prices move higher without a reversal signal.  
• Dec soyoil is still coiling between 33c-34c, but probably only a matter of time until this chart tests 34c.  
• Dec. corn signals a break-out as implied by the ascending triangle, with tops cleared at $3.65 enabling values to move towards $3.70.  
• December wheat forms triple lows at $5.42, where converging 20 and 200 day moving average lines cross.  This support is now reinforced, which suggests that prices could escalate in price towards $5.65 once again.  However, if one market would go negative it could be this one.  

NOVEMBER BEANS

Prices continue to head upward but would note that the PM session high close to $9.88 is also touching the upper trendline resistance.  Relative strength index reading is close to 82%, and that is extremely overbought.  However, this market continues to display extreme technical strength, walking back to reinforce support levels of trade as it moves higher.  Target high is now $10.00 if the $9.88 level can be cleared.  On a pullback, the market has also defined $9.75 as a good support level, as $9.74 held yesterday as well.  Overall trading range is now from $9.60, where the middle blue line crosses, to possible target highs at $10.00.  On a larger house-cleaning break, $9.40-$9.50 are strong buy zones, and probably hold up if we go there.

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