GOOD MORNING,
Prices are mixed this morning with grains slightly lower and oilshare continuing to leak. The markets are the weakest where remaining length resides, namely wheat and soyoil. Crude trades below $50/barrel, while the US dollar strengthens to 99.14. Stocks and commodities do not like uncertainty, and the impact of the Coronavirus on economies remains unclear. The CDC warned of potential disruptions in the US eventually when the virus arrives in the US in full force. Demand remains unclear, which is price negative for grains and soy. President Trump will hold a news conference this evening as regards the Coronavirus in the US.
WEATHER
Winter weather across the Ukraine continues to be mild and favorable, which could mean record crops will occur. Argentine weather has suddenly turned hot and dry, which will go on for another week. Portions of central Brazil remain too wet. A Midwest snow storm brings more precip with a mixture of snow and rain.
ANNOUNCEMENTS
Ukraine's grain exports are an estimated 401 mmt for the 2019/20 July-June season. Wheat exports rose to 16.5 mmt. as reported by the Ministry for Development of Trade, Economy, and Agriculture.
South Africa's 2019 wheat production was estimated at 1.502 mmt, unchanged. Maize harvest for 2020 is estimated 29% higher on good weather conditions.
BUSINESS
South Korea purchased 67,000 mt of corn in a private deal Tuesday, expected to be of South American origin.
CALLS
Calls are as follows:
beans: 1/2-1 higher
meal: .30-.40 higher
soyoil: 3-5 lower
corn: mixed
wheat: 1/2-1 lower
OUTIDE MARKETS
Outside markets feature crude trading down to $48.99/barrel lows, with gold prices steady and the US dollar trading towards previous highs. Equities were sharply lower overnight but are trading slightly higher at this writing, up 100 pts.
TECH TALK
- Major direction for May corn is lower, but crossing long and short term lines of support are close by at $3.71/$3.72, should we go there. The downtrend is strong in corn, meaning a price rally towards $3.79/$3.80 will be viewed as a selling opportunity. Target low is $3.68/$3.70, but it may be more difficult to get there.
- May beans showing more recovery trading off the low of $8.79 1/2 and would look for prices to work back towards $8.96. However, rallies could still be viewed as selling opportunities until prices can get back over $9.00. Trendline support for May beans on a break is $8.75.
- May soyoil posts another new low for the move down at 2939c, and the downtrend is strong with an ADX at 33, as rallies continue to fail. One word of caution for the soyoil bear is that the low of the morning is right on trendline support, so would take off a partial short position or could try the long side for a better market bounce and trade back towards 30c.
- May meal prices put in a new Contract low at $290.70, and also begin a recovery process off those lows. The trend is still fairly weak here despite the new ctr lows with an ADX reading of only 13, and trendline support is located at $290.00 should we go there. Good pricing interest should take the market back towards $295.00, and eventually up to $300.00 as we begin a new adjusted lower trading range.
- May wheat trades lower, as the uptrend officially stalls knocking out weaker longs. May wheat prices are now nestled between the 200-day moving average of $5.28 1/2 and the 100-day overhead at $5.40. If short, would probably cover something on a break towards $5.30 again should we get there, though double lows at $5.32 1/2 may hold for consolidation trade. At this point, could also try the long side of wheat with a tight sell-stop under $5.28.
NOVEMBER BEANS
The major direction is now lower, but the market is beginning a corrective phase off the low of $9.01 3/4. Charts are oversold at 30%, which is not enough to suggest that a larger bounce would be needed. The trend lower is strong with a 34 ADX reading, meaning good bounces may be sold and viewed as a selling opportunity. However, the market achieved a new low on outside influences which could have taken prices lower than they would have normally traveled. If short, would probably cover something in as the market could easily head back towards the break point of $9.16 and head into a $9.00-$9.25/$9.30 trading range. On a return trip towards the lows, trendline support is now located from $8.98-$9.00 should we go there.
TAGS – Feed Grains, Soy & Oilseeds, Wheat, North America
Corn, soybeans and soyoil all closed lower after trading up the previous three sessions. July soymeal made it a fourth trading session higher, and wheat remains on a tear with a fifth trading session closing higher. The mood around wheat sees supply concerns developing in North America and in t...
Cow-calf producer margins are discussed less frequently in these pages than their downstream counterparts of feedlot and beef packer margins, but this doesn’t mean they are less important to understanding the beef industry’s current state and outlook. Additionally, discussion of thi...
Reigniting a Transatlantic Deal Former Italian prime minister Enrico Letta is something of a policy rock star after authoring a report on the future strategy for the EU. Most of the 146-page report focuses on strengthening the EU’s internal Single Market but, buried at the end of th...
