GOOD MORNING,

Prices were mixed in the evening, higher for beans and soyoil with corn struggling and all turning in the red by the AM hour.  Soyoil prices are proceeding with caution as some expect an EPA story about biofuels.  The rumors are that the EPA may finally release two years’ worth of mandates today.  The corn market was able to shrug off biofuel concerns, as it may have little bearing on E-10 blending, which accounts for most of ethanol usage in the US.  It will have a larger impact on RIN prices.

Tonight’s Commitment-of-Traders report will probably find funds short wheat and meal, and thus the short-covering in the wheat market continues.  Active global tenders and questions about Russia’s exports keep prices upwardly slanted. IGC lowered wheat production a touch and raised corn production, keeping the buy wheat/sell corn spread trade in play.  

Interesting global stories include that of a cutback in Chinese crush.  In an effort to meet environmental emission targets, several Chinese provincial governments have limited supplies of energy to certain manufacturing infrastructure including dozens of crush facilities.  Run rates could be reduced as much as 40-50%, and could last for weeks.  Meal prices in China are on fire after at least 20 bean plants have now shuttered to comply with curbs on industrial power.  The shut-downs come when Chinese crushers make more meal for feed mills to build stocks ahead of the holidays.  China's National Development and Reform Commission said it would look to resolve the power shortages.  

Other stories include talk about delays in potassium fertilizer deliveries to farmers at the start of the 21/22 planting season in Brazil.  According to a farmer's lobby, strong demand and disruptions in the supply chain have caused potassium prices to soar 200% this year, weighing on the farmers bottom line and threatening yields.  

WEATHER

--Next 6/10 day outlook calls for a round of drier and cooler weather which should allow farmers to get back into the fields.  Extended outlooks are for even warmer weather.  

--SA weather appears normal right now but could use more rainfall.   Gist of weather is bearish as the weather outlook next week calls for warmer and drier conditions.

ANNOUNCEMENTS

Argentina's farmers are estimated to be 8% planted on corn.  

China's Sinograin sold 260 kmt of bean reserves out of 290 kmt offered yesterday.

AgResource estimates Brazil's bean production for 21/22 at 143.69 mmt vs. 133.14 in 2021, and vs. USDA at 144.0 mmt. 

CALLS

Calls are as follows:

beans:  1-3 lower

meal:  .20-.60 lower

soyoil:  mixed

corn:  1 lower

wheat: mixed/lower

OUTSIDE MARKETS

Weaker crude at $92.97/barrel, with stocks down 140 pts.  The US dollar firms to 93.33.

TECH TALK

• Prices are caught in a small downtrend channel, with top of channel today at $13.00 and bottom of channel at $12.55.  The trend is weak with an ADX at 10, meaning the rally may fizzle out at trendline resistance.   Double tops at $12.90 may become interim resistance as prices appear ready to settle back into the defined 12.65-$12.90/$12.95 space.  
• December meal chart remains interesting, with multiple lows located at $338.00 with a series of lower highs, typically bearish when the major trend preceding it has been lower.  China's crush plant story is interesting, and will see if meal and soyoil can begin to turn.  In the meantime, any break of $338.00, given the chart structure, will likely find prices back at the bottom of $335.00 Dec meal.  
• December soyoil futures rallied into trendline resistance over 57c but could also find pressure at the PM highs.  Prices now need to rally over 5750c to trigger more buying, as the chart right now offers a price pattern of good rallies with tops not as high as before.  Would look for an eventual consolidation trade from 55c to 58c.   
• December corn is now trending slightly higher, which may invite pullbacks to hold.  Prices were well bid, with a test of $5.30.  Trade over $5.30 today targets $5.35, and think we will see buying interest.  
• December wheat trades well bid back over $7.00 and over trendline resistance yesterday of $7.15.  Double tops this morning at $7.20, and a run past them targets $7.33.  

NOVEMBER BEANS

Trade is now sideways with a weak ADX of 20 signaling a distinct lack of trend.  Boundaries are $12.65 on the bottom, and $12.95 at the top.  If prices can clear $12.95 then trade back to $13.10 is likely.  Volumes are drifting lower as prices rise, which is not a sign of a strong market, as bulls need energy and buying power to sustain a rally.  Look for a likely 12.65 - $12.95 area into the Stocks report on 30th.

TAGS – Feed Grains, North America