GOOD MORNING,

Prices rallied yesterday on oversold technicals, and a bit of a shift in the fundamental outlook as US corn is finally becoming more competitive, as evidenced by sales announcements this week.  Basis levels remain firm, with the corn harvest pace the second slowest in a quarter century.  Bean rallies are clipped by stiff chart resistance, good weather in South America, and a weaker Brazilian Real, which has promoted a round of farmer selling.     Soyoil futures remain the leader to the upside with oilshare again gaining strength.  Soyoil charts continue to impress, bouncing back nicely after defining the lower end of its recent trading range.  Jan beans test $9.10 again in the PM session, with $9.00 still a solid line of good support on another break.  

Each day offers a new story on the trade war front.  Yesterday the story was that the US was looking for China to return to the deal that was reneged upon in May in order to scale back the tariffs that were put on after that.  The big date for tariffs to go up arrives on Dec. 15, if progress is not made.  In a weather market we have weather watchers......suppose the new category would be for tariff watching, given the events of the last few months.  Each new headline now actually serves to show us where the bean trading ranges are located.  

WEATHER

Warmer and rainy weather dominate now for the Midwest.  South American weather is mostly favorable, with a few localized dry spots.  Weather watchers will be monitoring rain events in December given the early season tendency for overall dryness.  

STORIES

Canada's largest railroad, the CN, is on strike.  An estimated 3000 union conductors and yardsmen walked off the job.  CN service in the US will continue to operate as normal while Canadian operations are hampered.  The net impact from the situation is that the US could pick up some previously Canadian business.

ANNOUNCEMENTS

Argentina's wheat harvest pace needs to accelerate in order to boost supply in key export hubs if the country is to meet its early Dec. export commitments, according to Agricensus.

China's central bank lowered its prime rate as a means to reduce company funding costs.  The cut was the second this week, as they cut their short-term market rate for the first time in 4 years.

CALLS

Calls today are as follows:

beans: 3 1/2-4 higher

meal:  .60-.80 higher

soyoil:  25-30 higher

corn:  1 lower

wheat:  1 1/2 lower

OUTSIDE MARKETS

Outside markets are firmer for crude oil, which trades up to $55.59/barrel, and the US dollar which is up to 98.0.  Stocks are down 76 pts.  

TECH TALK

• Jan beans continue to congest at trading range lows from $9.10-$9.20.  Stiff resistance stood yesterday from $9.18/$9.20, but continuing to approach key resistance levels will eventually imply that we trade above them and back into the $9.10-$9.40 trading range.  Even a break to $9.00 offers a chance to get long, or certainly cover a short, should we go there.  
• Dec meal pushes back towards the lower end of key support at $301.00, and into a series of recent lows.  Breaking $300.00 would trigger stops, but it would take a close under this level to be able to price something at $295.00.  
• Dec soyoil remains as firm as meal is weak, operating towards the recent highs of 3196c, but a bounce-back towards 3140c-3150c offers resistance.   Driving past 3150c assures a test of 32c.  
• Dec wheat hits a high of $5.13 1/2, but stiff resistance returns to $5.15.  Given that the market was just able to slightly penetrate $5.00, would probably be scaling out of a short on a market pullback towards that level. 
• March corn managed to trade towards $3.83, but we begin the day by testing key support at $3.78.  Funds are short, and a close under $3.75 suggests we see $3.70, as there is not much back support should we go there.  In the process, top of the trading range at $3.85 is becoming a tougher go to drive over.

MARCH CORN

Prices dropped to key lows at $3.78 while stiff resistance is overhead but does not come into play until prices reach $3.86.  The trend is weak with the ADX at only 22, (anything under 25 shows weak trend), with just slightly oversold conditions at 37%.  In the big picture, the market is not yet deeply oversold, so prices do not have to necessarily correct to the upside.  Would look for any bump into the $3.86 level to now be met with more selling pressure, with new lows still having to prove that they can hold.  The best indication that we have temporarily bottomed would be for the market to trade to the upside of $3.90 once again, which puts into motion a $3.75-$3.95 mini-trading range.  

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