World Perspectives
feed-grains soy-oilseeds wheat

AM Outlook - Really Pro the Farmer

GOOD MORNING,

Prices are firmer this morning after the release of crop ratings and the first results of the Pro Farmer crop tour.  Despite recent rain events and better weather developments, corn and bean ratings dropped, as the average corn yields from the Pro Farmer crop tour fall below USDA estimates.  Funds were sellers yesterday of around 11,000 corn contracts, but seem to be buying them back this morning. 

REPORTS

Crop Progress Report:

Corn:  56% good/excellent, down 1%.  Dough stage:  55% vs. 83% yr ago and 76% average, 21% behind the average levels.  Dented: 15% vs. 41% yr ago and 30% average.  Silking:  95% vs. 100% yr ago.  The only states that showed improvement were Colorado, Ill., NC, and ND.  

Beans:  53% good/excellent, down 1%.  Blooming:  90% vs. 82% wk ago and 99% yr ago.  Setting pods:  68% vs. 54% wk ago and 90% yr ago

Winter Wheat:  93%  harvested

Spring Wheat:  16% complete vs. 8% wk ago and 56% yr ago, 70% good/excellent vs. 69% wk ago

Crop progress report is supportive for today's trade as improvement was expected.

Pro Farmer Crop Tour Findings:  

CORN:   

Ohio corn yields projected to fall over 15 bpa below the USDA 169.5 bpa. Using 116 samples accrued during the first day of the 2019 tour, the Pro Farmer tour projected 154.35 bpa.  Southern Ohio showed strong results of over 200 bpa, northern areas were decimated by the spring weather.  The number is well off the 179.57 bpa yr ago, and the long-term average of 164.38 bpa.  

South Dakota corn was 154.08 bpa vs. USDA at 157 bpa, and vs. 178.01 bpa yr ago.

Indiana corn was behind.  Corn crops in southeastern Indiana surveyed during the 2019 Pro Farmer tour appeared younger than Ohio counterparts.  

BEANS:   

Soybeans in Madison Country, Ohio are behind, showing pods but plants are short and dry for this time of the year.  Bean pods in Ohio were 764 pods per square yard vs. 1,224.2 sq yd yr ago and 1.136.7 pods for the 3-yr average.   

Soybeans in South Dakota are outpacing Ohio.  Based on the tour findings, bean pod counts in SD averaged 832.85 pods in a 3 by 3-foot square vs. an average of 764.01 in Ohio, based on 69 samples.  

Gist of crop ratings and Pro Farmer comments supportive, which created a round of short-covering  - profit-taking.

WEATHER

6/10 day and 8/14 day maps are less hot with mixed chances for rainfall.  

CALLS

Calls this morning are higher across the board:

beans: 5-7 higher

meal:  1.80-2.00 higher

soyoil:  20-25 higher

corn:    4-6 higher

wheat:  2 1/2-3 higher

OUTSIDE MARKETS

Outside markets feature weaker energies with crude down to $55.87/barrel, and the US dollar higher trading to 98.42.   The Dow is up 38 pts

BUSINESS

Egypt is tendering for 30,000 mt of soyoil and 10,000 mt of sunflower oil for October 10- 30 delivery.

TECH TALK

  • More consolidation patterns are emerging as we head sideways from the downtrends of last week.  
  • Dec corn price action was impressive as it refused to break $3.70 yesterday and consolidated around $3.75.  This morning's slightly higher trade puts a small "v" shaped recovery in place and fortifies support at $3.70 for a possible $3.70 - $3.90 trading range.  
  • Dec wheat tightly congests from $4.70-$4.75 and will be a follower to corn.  Trade over $4.83 will trigger more short-covering in Dec wheat and extend a trading range from $4.70-$4.90.  If short, would probably elect to take something off the table at this point as the market seems to be "stuck" at the bottom.  
  • November beans show its trading range by breaking yesterday right to key support at $8.65 as it begins to move sideways off the bottom in an $8.60-$8.95 trading range.  
  • Dec meal direction is lower but double lows could hold a break at $296.00, with minor short-term trendline resistance in place at $300.00.  Next trade could be to the upside of the resistance line in a continued $295.00-$305.00 trading range.  
  • Dec soyoil backs all the way down to 2888c as yesterday sell-stops were triggered under 29c.  The 200-day moving average over the market returns to 2945c-2950c.  Would look to test it at some point, as this has been a very strong market, and the one place that traders may be looking for an opportunity to go long.  
  • Since Dec meal is at the bottom of the price range and Dec soyoil near the top, we could see a continued correction today with higher meal continuing against a correcting Dec soyoil chart. 

DECEMBER MEAL

Prices are at the very bottom of a long downtrend, with resistance levels stronger than support.  However, the $295.00/$296.00 level has been one that has really offered up support since last May, with the exception of the contract low blow off day to $291.60, which quickly reversed course the next day.  

Because of the ability to hold support at $295.00 to $296.00, would rather cover in a partial short position and wait for a rally correction that would be coming on any move higher from lower now, and particularly if we cross the minor line of resistance as noted in blue on the chart which crosses today at $300.00.  Because of the bounce and what appears to be a "stuck" chart at the bottom of price action, the next direction is likely higher and back over $300.00 for a continued $295.00-$305.00 trading range.

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