GOOD MORNING,
Prices started the evening on a tentative note, but beans, wheat, and soyoil prices rallied into the morning hours taking corn along with it. Oilshare has a bit of a comeback with a nice rally back to soyoil. Higher palm, canola, and crude stabilizes the soyoil chart, while rumors of bean business work to help beans trend upward. Egypt tendered for 30,000 mt of soyoil, with results expected later today.
Beans popped yesterday as lower prices gave way to talk that China was purchasing cargoes out of the Gulf. A resumption of normal export activity out of the Gulf plus business from China would go a long way towards creating price stability. News wire services report that up to 60 vessels are waiting to load in the Gulf.
Funds continue to liquidate corn length as harvest continues, with open interest declining for the December contract by 6,581 contracts. US wheat is a premium to other global origins, and funds are net short. Grains are higher today led by wheat.
World markets continue to gyrate as the issue in China with Evergrande is not going away. Adding to woes is the fact that Bank of America lowered GDP in China from 8.3% to 8%, with next year at 5.3% vs. 6.2%.
On the political scene, Argentina sent a draft to Congress for 2022 which included an article to manage grain export duties until 2024. In the past, gov. control of export taxes for beans, wheat, and corn has been a point of contention between the farmers and the gov., which has resulted in farmer withholding beans from the market. Currently bean export duties stand at 33%, with meal and oil at 31%. Farmers contend these taxes are high. Grains are at 12%.
WEATHER
--Rain showers will be around for 2-3 days before 6/10 and 8-14 shows a warmer and drier stretch.
--Brazil is dry and hot in the center-west, but showers are called for that could help both Argentina and Brazil.
Gist of the weather is bearish.
ANNOUNCEMENTS
Russia's SovEcon raised wheat production by 200 kmt to 75.6 mmt.
Argentina has sold 30 mmt of beans from the 20/21 crop, after registering sales over a 7-day period of 650,200 tons, as reported by the Ag Ministry. The ministry reported that 20/21 corn had reached 40.4 mmt, 3.6 mmt more than sales registered year ago. Argentina farmers have sold a total of 6.7 mmt of wheat for 21/22, with the harvest starting in Nov.
CALLS
Calls are as follows:
beans: 1-3 higher
meal; .30-.60 lower
soyoil: 50-60 pts higher
corn: 1-2 higher
wheat: 6-8 higher
OUTSIDE MARKETS
Crude oil trading up to $71.80 and the US dollar at 93.29. Stocks are 180 pts higher.
TECH TALK
- November beans turn higher from lower after posting a low trade at $12.57 1/2. Prices did not stay down there for long, and the chart turning higher from lower throws us back inside the previous $12.60-$13.00 trading range. The ADX is at 11, meaning there is very little trend. Each rally since last August has failed leading to new lows, and as prices near resistance at $12.95 could be the same case.
- December meal direction is sideways but has a series of low trades at $338.00 which now defined bottom support. A trade over $345.00 would be needed to clear resistance and stop the lower momentum. While we probably go there, the chart formation in meal still remains more bearish to neutral than friendly.
- December soyoil futures recovered against a 5418c low, with trade up to 56c this morning. While the major direction has been sideways/lower, would still prefer to own the market down at 54c-55c for a possible rally back towards 58c/59c.
- The December corn chart tested lower support from $5.12-$5.15 which held nicely under extreme pressure yesterday. The chart is sideways and would look for consolidation from $5.10 - $5.35 once more, as prices now trend up and away from the 200-day moving average at $5.09.
- December wheat chart finds support and congestion trade with prices back towards the 100-day moving average of $7.01. The downward slide has stopped, and the low of $6.88 is right on new and building trendline support. A slip under $6.88 targets the 200-day moving average of $6.72, but for now looks like prices may not want to go there.
DEC/MARCH CORN SPREAD
Trade heads to 8 1/2c carry, where multiple lows are located. Trading range has been from 7c to 8 1/2c. Moving into new lows increases the chance that we break them, and would open the door to a 9-10 target low. The chart is well balanced at 53%, meaning it is neither overbought nor oversold. With 8 1/2c as an equilibrium trade between highs at 6 1/2c to lows at 10c, pushing out to 9c will find further weakness.
TAGS – Feed Grains, North America
All the major contracts opened in the green but by the close only soymeal, HRW, and the livestock complex remained that way. Profit-taking was one aspect but most noticeable was lower volume for most of the markets, and a narrow trading range for many. It appeared that everything was positioned...
AI and Agriculture AI is the rage with some warning it will lead to human extinction, and others comparing its transformative impacts to the internet and smart phones. Those technologies have had their share of ethical concerns but the genie is now out of the bottle and short of government regu...
USDA released its first quarterly Hogs and Pigs report for the year today. At 72.86 million head, the total inventory as of 1 March was slightly above last year’s 72.69 million head. The report was generally in line with pre-report expectations, except there were a few more market...
