GOOD MORNING,
Prices continued to work lower post beneficial crop progress numbers. Rising domestic and international crop estimates for wheat, (Russia and Australia), pushed prices lower. Egypt tendered for 60,000 mt of mill grade wheat for Sep 11-30 shipment. Large yield ideas for corn and beans took aim at prices as well. Corn posted contract lows, wheat and beans found the lower end of trading ranges. December soyoil backs up to test the 31c benchmark, in a retracement from new market highs. Oilshare, in other words, takes a breather.
Better weather and ideal conditions saw better farmer movement as prices traded weaker. Farmer selling has been reported as farmers clear space for big crops.
WEATHER
US weather this week is normal to below normal temps with scattered rains. There are some rains starting this weekend but missing out on areas in Iowa, while eastern pockets remain mostly favorable. World forecasts call for the EU and Black Sea to remain hot and dry and in need of rain for corn. Argentina areas remain dry for wheat.
ANNOUNCEMENTS
Brazil's Agroconsult forecasts 2020 Brazil bean exports around 80.0 mmt, then rising beyond that for 2021 with continued strong China demand. They forecast 20/21 bean acres to expand by more than 1.0 mln hectares to 37.9 mln hectares.
Brazil's Agroconsult forecasts 20/21 total corn production at 110.3 mmt vs. 101 .2 mmt prev. year. This includes 28.4 mmt of first season corn, and 81.9 mmt of second season production. First season corn is expected mostly unchanged at 5.1 mln hectares, but second season acres are expected to grow by 5%.
France's farm ministry lowered its estimate of this year's soft wheat harvest to 29.7 mmt from an initial forecast of 31.3 mmt a month ago, which was 25% below last year's bumper harvest, and 16% lower than the 5-year average.
Stonex forecasts Brazil's soy production at a record 132.6 mmt this year, vs. 123.0 mmt last year.
DELIVERIES
Soyoil: 142
Meal: 219
CALLS
Calls are as follows:
beans: 2-3 higher
meal: 1.00-1.50 higher
soyoil: 5-10 lower
corn: 1 1/2 -2 higher
wheat: 3-3 1/2 higher
OUTSIDE MARKETS
A firmer crude oil market, which trades to new highs of $43.35/barrel, and a weaker US dollar at 92.85. Gold prices hit a new trading range high of $2,039.30/oz. Stocks are up 191 pts.
TECH TALK
- Several markets hit target trading range lows and therefore see more profit-taking and short-covering. These achieved target lows including $5.08 for Sep wheat, $8.80 for Nov beans, $3.20 for Dec corn, and $290.00 for Dec meal. Dec. soyoil backs up to test 3080c, a high last week turned into support today.
- Corn futures entered a new leg lower with prices falling into good commercial ownership. New lows beget new lows, and Sep and Dec corn found those lows at important benchmarks, namely $3.09 and $3.20 3/4, respectively. Trendline support for Dec corn is $3.17, should price go there, while rallies are now for selling. Look to probably test this level.
- Sep. wheat falls to the lower end of its trading range from $5.05/$5.08 after breaking $5.20. Target low could be $4.95 if $5.05 is broken through.
- November beans test $8.80 without much follow-through. Look to maintain a likely sideways trade from $8.75-$9.00.
- December soyoil traded to visual trendline resistance at 3178c where profit-taking was noted. On a better pullback, 3050c returns as lower support, but the break to 3080c may also provide the backdrop as it was Friday's high.
- December meal prices test lower support just under $290.00 but failed to settle lower with follow-through. Continue to straddle/strangle $290.00-$305.00 Dec. meal.
DECEMBER CORN
The downtrend in corn continues as prices post new ctr lows. Long term trendline support for this market is from $3.15-$3.17, and would look to find pricing interest should we go there. The ADX number is strengthening to 21 as prices touch new ctr lows. The market now displays all the hallmarks of a bear market with higher volume, lower prices, and rising open interest. New lows have yet to be defined without a reversal off the low. However, resistance does move down to $3.29/$3.30 as new lows are printed. Look to probably touch $3.15 to $3.17.
TAGS – Feed Grains, Soy & Oilseeds, Wheat, North America
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